Century Entertainment Chairman breaches listing rules during blackout period
Hong Kong-listed Century Entertainment disclosed that Chairman, Ng Man Sun, breached stock exchange rules during the “black-out period” before the company’s half-year results were published.
The company revealed that Ng, a majority shareholder in the company, entered into a sale and purchase agreement involving convertible bonds worth HK$32 million (approximately $4.11 million) during the black-out period. The blackout period is a time when directors are prohibited from dealing in company securities, this is to ensure prevention of insider trading or the appearance of insider trading. According to the Hong Kong Stock Exchange (HKEX) rules, company directors are not allowed to deal in any securities of the company during the 30-day period before the publication of half-year financial results.
Company’s response
The company noted that the breach is due to the chairman’s “inadvertent oversight of the commencement of the Black-out Period.” Adding that negotiation for the transaction had commenced “from about September 2024,” which was before the black-out period. The original signing for the transfer was also originally scheduled for 26 October 2024. However, this was delayed to 4 November due to the “request of the placement agent and the purchaser.” The also noted that the breach was “an unintended mistake of Mr. Ng and does not materially affect his suitability as a Director or raise any serious concern as to the integrity of Mg. Ng.”
Ng had previously indicated that he would not seek repayment of the bonds, both HK$32 million and HK$50 million. He also said he “will further provide sufficient financial supports for the Group’s working capital for a period of at least 12 months.” The company also obtained an undertaking from the purchaser to not call for repayment and committed to providing financial support for the company for a period of 12 months. This arrangement ensures that Century Entertainment will not face immediate liquidity issues despite the breach of compliance.
Remedial measures
Century’s chairman also “confirmed that he will continue to oversee the management and operation of the gaming business in Cambodia.” Given that the chairman’s HK$50 million in convertible bonds were fully cancelled, the group considers that “the company will have sufficient working capital for its current requirements, and it is reasonable to expect that it will remain a commercially viable concern.”
To prevent similar issues in the future, the company has announced that it will nominate an additional director to receive relevant notices and oversee compliance. The company will also adopt a policy to ensure that notices are circulated among all directors, this will make sure the group remains compliant with the Hong Kong Stock Exchange rules.
