RMH HOLDINGS (08437.HK): Exchange Sanctionses Company and Six Former Directors, Two Chairmen Cited for Detriment to Investors' Interests

NewTimeSpace News: The Stock Exchange of Hong Kong Limited published a disciplinary action statement on 13October 2026 sanctioning RMH Holdings Limited (stock code: 08437) for breaches of GEM Listing Rules 17.56(2), 19.34, 20.33, 20.34, 20.42 and 20.44, and censuring the Company's former Executive Director, Chairman and Compliance Officer Dr. Loh Teck Hiong and former Executive Director, Chairman, Chief Executive Officer and Compliance Officer Mr. Ho Wai Ching, with a statement that their acting as directors or senior management of the Company or any of its subsidiaries may detriment the interests of investors. Former Executive Director Dr. Siu Yui Ho, former Independent Non-executive Directors and Audit Committee members Mr. Yeung Cheung Kam and Mr. Luk Wai Ming, and former Independent Non-executive Director and Audit Committee ChairladyMs. Wu Nga Ha were also censured. Each of the relevant directors other than Dr. Loh and Mr. Ho is required to complete 15 hours of training on regulatory and legal topics and compliance with the Listing Rules, covering directors' duties and the Corporate Governance Code.

The Exchange ruled that the Company set up an investment department in October 2021 to invest in listed securities unrelated to its principal business, initially allocating approximately HK$5.7 million, but apart from an investment guideline recorded only in board minutes or written resolutions and not communicated to the head of investment or the investment department, the Company had no internal controls over its securities investment activities, and the directors had not reached consensus on who would monitor and supervise the investments. The Board had not performed its management and supervisory function and, from the establishment of the investment department up to at least March 2022, was neither provided with nor required to obtain any updated information on the securities investments or monthly brokerage statements, and remained unaware of the securities invested in, the amounts involved, the profit or loss position or whether the investments had breached the investment guideline until the Company received a margin call notice in July 2022. The Company ultimately disposed of all of its securities investments, recording a net loss of approximately HK$12.9 million on total investments of HK$15.7 million.

The Exchange further noted that in March 2022 the Company conducted a rights issue which was not fully subscribed, and the underwriter procured five individual subscribers to subscribe for rights issue shares, one of whom was Mr. Ng Kit, a director of a subsidiary of the Company, whose subscription constituted a connected transaction. Without the approval or knowledge of the Board, Mr. Ho permitted the five subscribers to defer payment of an aggregate HK$19.4 million, representing approximately 47.2% of the net proceeds of the rights issue, to one month after completion of the rights issue; the Company obtained no security, charged no default interest and imposed no restriction on the five subscribers from disposing of the shares before full payment. The rights issue results announcements published on 18 and 21 March stated that all subscribers were independent third parties and did not disclose Mr. Ng's subscription or the deferred payment arrangement, and the Company did not announce Mr. Ng's subscription as a connected transaction until more than two years later; none of the five subscribers paid within the extended payment period, and the Company did not receive all subscription monies until September 2022. In addition, without the approval or knowledge of the Board, Mr. Ho procured a services agreement between a wholly-owned subsidiary and Apple Tree International Holding Limited, under which the Company was required to pay a prepayment of HK$3 million upon signing; Apple Tree failed to arrange the financing and, after termination, did not refund the prepayment within three business days as contractually required, and the Company ultimately recovered the prepayment in full, with minimal interest, only eight months later.

In addition, the Exchange ruled that the Company's risk management and internal control systems had been materially and persistently inadequate since at least 2020, including the absence of a formal monthly management reporting system, a list of matters reserved for Board decisions, and procedures and measures to effectively identify and monitor notifiable and connected transactions. The Company failed to provide any written risk management and internal control policies for the financial year 2022 and admitted that its risk management and internal control systems were then not effective and adequate. The Exchange noted that Dr. Loh, Dr. Siu and Mr. Luk claimed to have delegated the matters relating to the securities investments, the rights issue and the Company's internal controls to other persons and relied on those persons to execute, monitor and supervise the delegated matters, but each of them failed to maintain continuous proactive oversight of the delegated matters, to request updates on their progress and to obtain and maintain sufficient knowledge thereof, and thus failed to actively supervise the performance of the delegated functions.