EVER REACH GP (03616.HK): HKEX Imposes Disciplinary Sanctions on Company, Four Directors and Five Senior Executives Over RMB320 Million Circular Fund Arrangement Leading to Audit Delay and Suspension

NewTimeSpace News: On 9 July 2026, Hong Kong Exchanges and Clearing Limited issued a disciplinary notice reprimanding EVER REACH GP (03616.HK), four directors and five senior management personnel and ordering them to undertake regulatory training. The disciplinary action arose from the Company’s failure to publish audited annual results for 2023 on time, resulting in the suspension of its shares from 2 April 2024. The underlying matter concerned a circular fund flow arrangement involving approximately RMB320 million.

Investigation revealed that to secure bank loans for prospective construction projects, the Company remitted loan proceeds to suppliers as advance payments before requesting the suppliers to refund such sums. The repatriated funds were deployed to ongoing construction projects without designated purposes. The arrangement breached local regulations and the Company’s internal control policies, giving rise to incomplete documentation, obstructed audit work and exposing the Group to liquidity and compliance risks. Although all funds were eventually recovered, part of the recovery required legal proceedings and incurred additional interest expenses.

HKEX ruled that the Company breached multiple Listing Rules governing timely publication of financial results; relevant directors failed to safeguard corporate assets and maintain effective internal controls; and the senior executives’ acts or omissions contributed to the rule violations. The directors and management concerned admitted the breaches and consented to the sanctions. The Company released all outstanding financial results on 18 July 2025 and resumed trading on 19 September 2025.