THE Listings Disciplinary Committee (LDC) of the Singapore Exchange (SGX) publicly reprimanded Wu Xinhua, former executive chairman and chief executive officer of Raffles Infrastructure Holdings, for breaking listing rules.
This concerns the company’s non-factual and misleading announcements on SGXNet between 2015 and 2018, including inflated cash balances in its financial statements.
The LDC also imposed an order prohibiting any issuer from appointing or reappointing Wu as a director or executive officer, or both, for three years starting from last Friday (May 31), the date when the regulatory committee’s grounds of decision were published.
“The sanctions are the maximum sanctions that the LDC is empowered to impose against a director and/or executive officer pursuant to Mainboard Rule 1417(2),” said the committee.
The LDC noted that the decisions were based on the severity of the non-disclosures and misrepresentations, which amounted to “deliberate fraud on the market”. This is on top of Wu’s lack of cooperation during investigations.
The committee noted that Wu violated Mainboard Rule 703(4) by causing the company to make false statements.
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In Raffles Infrastructure’s announcements and annual reports between November 2015 and November 2017, Wu caused the company to disclose inflated figures of cash balances.
Additionally, between November 2015 and November 2017, the company said that it had received claims related to products processed by Shishi Sinwa, its only operating subsidiary then. It also said that it had paid compensation to settle the claims. Investigations later on found out that such claims did not exist, and the purported compensation was not made.
Wu also caused the company to disclose a non-existing fixed deposit account held with Agricultural Bank of China in SGXNet announcements between April 2015 and August 2018.
By causing the company to “fail to have a robust and effective system of internal controls” that address financial, operational and compliance risks, Wu breached Mainboard Rule 719(1).
He also breached Mainboard Rule 720(1) by failing to demonstrate the character and integrity expected of a director of a listed issuer.
The LDC added that all the documents pertaining to the proceedings had been served on Wu, which he had confirmed. The regulatory body added that it was satisfied that Wu had chosen not to respond, as opposed to being unaware of the charges against him.
Wu was the company’s executive chairman and CEO from July 2007 to October 2017. He then served as a non-independent, non-executive director of the company from October 2017 to March 2019.
Raffles Infrastructure Holdings, formerly known as China Fibretech, was founded by Wu in 2007. It was listed on the SGX’s mainboard in June 2008 and changed its name months after the listing.
It is now an investment holding company principally engaged in the investment and management of infrastructure projects in Asia, based on the LDC’s grounds of decision.
Trading of Raffles Infrastructure shares has been suspended since last July.
