CLSA Premium to part ways with non-exec director Stephen Gregory McCoy
Hong Kong-focused Forex broker CLSA Premium Ltd (HKG:6877) has confirmed that Stephen Gregory McCoy is parting ways with the company. Mr McCoy is resigning as non-executive Director of CLSA Premium with effect from March 9, 2021.
He has been nominated by KVB Holdings Limited, which is the shareholder of Banclogix System Co. Limited, a company currently in litigation with CLSA.
Mr McCoy has set forth a set of points of disagreement with the Board of CLSA in relation to his resignation.
He considered that CLSA Premium did not have sufficient operation under Rule 13.24 of the Rules Governing the Listing of Securities on the Stock Exchange. Mr McCoy says that after the disengagement of clients as disclosed in CLSA’s announcement dated 26 November 2019, the company had not recorded a profit in any month of year 2020 and he had not seen any advancement in business opportunities over the past 12 months, including business growth and increasing customer numbers. He had concerns as to the validity and sustainability of CLSA going forward.
Further, Mr McCoy alleges that CLSA has failed to “disclose inside information regarding the written-off of software developed or managed by Banclogix”. He argues that CLSA’s announcement dated 23 March 2020 in relation to the termination of IT services agreement with Banclogix states that the termination of the Agreement would not have any material adverse effect on the Group’s financial position. However, CLSA’s annual report for the year ended 31 December 2019 shows an impairment of HK$37.5 million for all the software developed or managed by Banclogix.
Mr McCoy argues that the company should have disclosed such information at the time of the profit warning announcements dated 23 January 2020 and 30 January 2020.
In addition, Mr McCoy notes that on June 24, 2020 a special board meeting was held to discuss a statement of claim filed by the Financial Markets Authority (FMA) of New Zealand in the High Court of New Zealand for alleged breaches of Anti-Money Laundering and Counter-Financing Terrorism Act by CLSA Premium New Zealand Limited (CLSAP NZ). He says that the Board was referred to the media release issued by the FMA notifying of the proceedings.
Mr McCoy says that he was told that the proceedings only affected a few clients and CLSA’s management was looking after the matter. He complais that the Board was not given a copy of the statement of claims filed by the FMA nor was it given any further update.
CLSA has managed to survive several votes on its proposed winding up. The latest one was held on December 2, 2020.