Hong Kong SFC Instructs Hong Kong Exchange to Suspend Share Trading of LET Group Holdings & Summit Ascent Holdings from 14th February 2024 9 am Becaus
14th February 2024 | Hong Kong
The Hong Kong Securities & Futures Commission (SFC) has instructed Hong Kong Exchange (HKEX) to suspend share trading of 2 listed companies LET Group Holdings and Summit Ascent Holdings from 14th February 2024 9 am because of substantial sale of $116 million assets in Russia flagged on 29th January 2024, with the asset indirectly held by Summit Ascent Holdings via a 77.5% owned subsidiary. Hong Kong SFC: “The Securities and Futures Commission (SFC) has directed The Stock Exchange of Hong Kong Limited (SEHK) to suspend dealings in the shares of LET Group Holdings Limited (LET) and Summit Ascent Holdings Limited (Summit Ascent) under the Securities and Futures (Stock Market Listing) Rules (SMLR) with effect from 9:00 am on 14 February 2024 (Notes 1 to 3). The SFC took action due to concerns regarding a very substantial disposal (VSD) of a major asset of LET and Summit Ascent, namely, the sale of assets in Russia for US$116 million, which came to its attention on 29 January 2024. The major asset was at all material times indirectly held by Summit Ascent through a 77.5% owned subsidiary (Note 4). The VSD is subject to the reporting, announcement, circular and approval of shareholders of both companies under Chapter 14 of the Listing Rules (LR). Since there was a change in control of LET in May 2022, any material disposal under Rule 14.06E of the LR is restricted for a period of 36 months from the change in control unless the remaining group after the change in control can meet the requirements of Rule 8.05 of the LR (Note 5). It appears to the SFC that after the completion of the VSD, LET and Summit Ascent may not have a business with a sufficient level of operations and assets of sufficient value to support their operations to warrant a continued listing status of their shares under Rule 13.24 of the LR. As a result, LET and Summit Ascent may not be regarded as suitable for listing under the LR (Note 6). The SFC also noted that LET and Summit Ascent are required to consult the Takeovers Executive under Note 7 to Rule 2 of the Code on Takeovers and Mergers (Takeovers Code) and meet the requirements under Rule 2.10 of the Takeovers Code. This includes obtaining shareholders’ approval of the VSD in a general meeting, with the VSD being approved by at least 75% of the votes cast by disinterested shareholders at the meeting and the disapproving votes representing not more than 10% of the votes attached to all disinterested shares.” See below for more info:
“ Hong Kong SFC Instructs Hong Kong Exchange to Suspend Share Trading of LET Group Holdings & Summit Ascent Holdings from 14th February 2024 9 am Because of Substantial Sale of $116 Million Assets in Russia Flagged on 29th January 2024, Asset Indirectly Held by Summit Ascent Holdings via a 77.5% Owned Subsidiary “
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Hong Kong SFC Instructs Hong Kong Exchange to Suspend Share Trading of LET Group Holdings & Summit Ascent Holdings from 14th February 2024 9 am Because of Substantial Sale of $116 Million Assets in Russia Flagged on 29th January 2024, Asset Indirectly Held by Summit Ascent Holdings via a 77.5% Owned Subsidiary Hong Kong Exchange
14th February 2024 – The Securities and Futures Commission (SFC) has directed The Stock Exchange of Hong Kong Limited (SEHK) to suspend dealings in the shares of LET Group Holdings Limited (LET) and Summit Ascent Holdings Limited (Summit Ascent) under the Securities and Futures (Stock Market Listing) Rules (SMLR) with effect from 9:00 am on 14 February 2024 (Notes 1 to 3).
The SFC took action due to concerns regarding a very substantial disposal (VSD) of a major asset of LET and Summit Ascent, namely, the sale of assets in Russia for US$116 million, which came to its attention on 29 January 2024. The major asset was at all material times indirectly held by Summit Ascent through a 77.5% owned subsidiary (Note 4).
- The VSD is subject to the reporting, announcement, circular and approval of shareholders of both companies under Chapter 14 of the Listing Rules (LR). Since there was a change in control of LET in May 2022, any material disposal under Rule 14.06E of the LR is restricted for a period of 36 months from the change in control unless the remaining group after the change in control can meet the requirements of Rule 8.05 of the LR (Note 5).
- It appears to the SFC that after the completion of the VSD, LET and Summit Ascent may not have a business with a sufficient level of operations and assets of sufficient value to support their operations to warrant a continued listing status of their shares under Rule 13.24 of the LR. As a result, LET and Summit Ascent may not be regarded as suitable for listing under the LR (Note 6).
- The SFC also noted that LET and Summit Ascent are required to consult the Takeovers Executive under Note 7 to Rule 2 of the Code on Takeovers and Mergers (Takeovers Code) and meet the requirements under Rule 2.10 of the Takeovers Code. This includes obtaining shareholders’ approval of the VSD in a general meeting, with the VSD being approved by at least 75% of the votes cast by disinterested shareholders at the meeting and the disapproving votes representing not more than 10% of the votes attached to all disinterested shares.
- However, it appears to the SFC that the VSD has not complied with the above-mentioned requirements. In particular, the sale and purchase agreement relating to the VSD had been executed and the completion of which was not made subject to obtaining the required approval of shareholders.
- The SFC has asked LET and Summit Ascent to address its concerns by providing an undertaking that the completion of the VSD is made conditional on shareholders’ approval and in full compliance with the relevant rules and regulations. However, both companies have failed to respond to the SFC. The SFC also has serious concerns about the conduct of the two companies and their management.
- The SFC considers that suspending the dealings in the shares of LET and Summit Ascent is desirable for the purpose of maintaining a fair and orderly market and protecting the interest of the investing public.
The SFC’s investigation is ongoing.
Notes:
- any materially false, incomplete or misleading information has been included in any document issued in connection with its listing of securities or in announcement, statement, circular or other document made or issued by it or on its behalf;
- it is necessary or expedient in the interest of maintaining an orderly and fair market in securities traded on the SEHK;
- it is in the interest of the investing public or in the public interest, or it is appropriate for the protection of investors generally or for the protection of investors in the shares of the listed company; or
- there has been a failure to comply with any condition imposed by the board of the SFC when permitting resumption of trading under section 9(3)(c) of the SMLR.
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