The Hong Kong Stock Exchange has publicly censured REDCO HEALTHY and two of its current executive directors, Tang Chengyong and Huang Yanwen, for breaching listing rules. The Exchange has also ordered both directors to complete 27 hours of training within 90 days, focusing on regulatory and legal issues, including topics such as director duties, the Corporate Governance Code, and specific chapters of the Listing Rules.

The disciplinary action stems from a series of irregular fund transfers that occurred after the company’s listing in 2022. An investigation revealed that, without the knowledge of the board, Tang and Huang orchestrated multiple transactions through the company’s subsidiaries. These transactions involved providing financial assistance totaling over CNY 190 million to the parent group and several independent third parties, with the majority settled in cash. Additionally, the company and its subsidiaries borrowed approximately CNY 102.95 million in bridging loans from the parent group.

The Exchange ruled that REDCO HEALTHY violated multiple provisions of the Listing Rules concerning notifiable and connected transactions, including failures to issue announcements, consult compliance advisers, and obtain shareholder approval. Tang and Huang, as directors of the involved subsidiaries, were identified as the primary individuals responsible for these fund flows. The Exchange found that they breached their director duties by failing to act with reasonable skill, care, and diligence and by not ensuring the company’s compliance with the Listing Rules.

The Exchange noted that REDCO HEALTHY has confirmed full recovery of all financial assistance provided by its subsidiaries and the complete repayment of the bridging loans.