CLSA Premium gets letter from HK Stock Exchange on suspension of its shares trading
Hong Kong-focused Forex broker CLSA Premium Ltd (HKG:6877), formerly known as KVB Kunlun, today announced that it has received a letter from the Stock Exchange notifying the company of its decision that the company has failed to maintain a sufficient level of operations and assets of sufficient value as required under Rule 13.24, and that the trading in the Company’s shares will be suspended on 3 February 2023 under Rule 6.01(3) of the Listing Rules unless the Company applies for a review of the decision.
The Stock Exchange has considered the broker operates the business of provision of leveraged foreign exchange, commodities and index trading services in Australia, New Zealand and Hong Kong since listing and sale of Chinese and Japanese medicines products and healthcare products in the PRC and Hong Kong since May 2022, each of which is not demonstrated to be of substance, viable and sustainable.
Since business deterioration in 2019, none of the business plans has succeeded in improving the scale and profitability of the Margin Dealing Business. In 2022, the operation in New Zealand and Australia ceased/was suspended. The remaining operation of the Margin Dealing Business – bullion trading business in Hong Kong – only has a short operating history and a minimal operating scale.
The Trading Business also has a very short operating history and minimal scale of operation.
As at 30 June 2022, the Company had total assets and net assets of HK$284 million and HK$246 million respectively. Its total assets were mainly comprised of cash and bank balances of HK$221 million. As noted above, the Company did not appear to have sufficient assets to support the operation of a viable and sustainable business.
The Stock Exchange is not satisfied that the Company has sufficient assets to meet Rule 13.24.
Pursuant to the Letter, the Company must re-comply with Rule 13.24 of the Listing Rules, fulfil any resumption guidance that may be set by the Stock Exchange and is in full compliance with the Listing Rules to the Stock Exchange’s satisfaction before the trading of the Company’s shares is allowed to resume.
Under Rule 6.01A(1) of the Listing Rules, the Stock Exchange may cancel the listing of the Company’s shares if trading remains suspended for a continuous period of 18 months.
The Company is in the process of reviewing the Letter and is discussing the same internally and with its professional advisers. Shareholders and potential investors are reminded that the Company has yet to make a decision as to whether or not to request for a review of the Decision and the outcome of such review by the Listing Committee, if undertaken, is uncertain.