HOME CONTROL (01747.HK): HKEX Censures Company and Two Former Directors over Undisclosed Change of IPO Proceeds Use and Other Breaches

NewTimeSpace News: On 8 September 2026, The Stock Exchange of Hong Kong Limited (HKEX) published a disciplinary statement censuring Home Control International Limited (stock code: 01747), its former chairman and non-executive director Mr. Gao Yu and former non-executive director Mr. Chen Guojing, and directing each relevant director to complete 20 hours of training on regulatory and legal topics and Listing Rules compliance.

According to the statement, the company listed on 14 November 2019 with net proceeds of approximately HKD 84.9 million, of which approximately HKD 38.1 million was raised through sub-underwriter AMTD Global Markets Limited (now known as oOo Securities (HK) Group Limited) (the AMTD Proceeds), representing approximately 44.9% of the company's IPO proceeds. On the day before listing, the company entered into a custodial services letter appointing AMTD Wealth Management Solutions Group Limited (AMTD Wealth, now known as Fortis, Sheriffs & Browns Asia Co. Limited) as custodian of all assets in its cash and securities accounts with AMTD Wealth, and entered into a subscription agreement to subscribe for investment products issued by a private entity, with a principal amount of not more than HKD 50 million for a term of 1.5 years, featuring automatic renewal upon maturity and lock-up terms allowing the product manager to redeem unilaterally. On the listing day, the AMTD Proceeds were deposited into the AMTD account, and HKD 38 million of them was subsequently used as principal to subscribe for the investment products; on 18 December 2019, the company paid approximately HKD 1.1 million in custody and service fees to AMTD Wealth.

The Listing Committee found that the company's use of IPO proceeds for the subscription deviated from the intended use stated in its prospectus, constituting a change of use of IPO proceeds, yet the company failed to disclose the subscription agreement in its listing documents or publish timely announcements, failed to disclose the change in annual reports, and did not notify the sponsor or consult its compliance adviser. Each rollover of the investment products upon maturity constituted a discloseable transaction, for which the company failed to comply with the announcement requirements under the Listing Rules. According to the company's annual report for the year ended 31 December 2024, a provision of approximately HKD 25.2 million was made for the outstanding balance due to uncertainty over when and whether the investments would be fully redeemed.

In respect of the directors' involvement, Mr. Gao signed the custodial services letter and the subscription agreement on behalf of the company without reporting to or seeking approval from the board, and failed to procure adequate due diligence and risk assessment; Mr. Chen reviewed the draft subscription agreement but did not make sufficient independent enquiries, relying instead on the views of Mr. Gao and AMTD Wealth, and approved the electronic fund transfer instruction for the custody and service fees. The Listing Committee found the company in breach of Rules 2.13, 3A.05, 3A.23, 11.13 and 14.34 of the Listing Rules and paragraph 11(8) of the then Appendix 16, and Mr. Gao and Mr. Chen in breach of Rules 3.08 and 3.09B. The company and the relevant directors did not contest the breaches and agreed to accept the sanctions, which apply only to the company and the relevant directors and not to any other former or current directors.

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