Listing Rules and Guidance: Contents


 
 

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8.10
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(1) Where a new applicant has a controlling shareholder with an interest in a business apart from the applicant's business which competes or is likely to compete, either directly or indirectly, with the applicant's business (the "excluded business"):
(a) the applicant's listing document must prominently disclose the following:
(i) reasons for the exclusion of the excluded business;
(ii) a description of the excluded business and its management, to enable investors to assess the nature, scope and size of such business, with an explanation as to how such business may compete with the applicant's business;
(iii) facts demonstrating that the applicant is capable of carrying on its business independently of, and at arms length from the excluded business;
(iv) whether the controlling shareholder intends to inject the excluded business into the applicant in future, together with the time frame during which the controlling shareholder intends to or does not intend to inject the excluded business. If there is any change in such information after listing, the applicant must disclose it by way of an announcement published in accordance with rule 2.07C as soon as it becomes aware of such change; and
(v) any other information considered necessary by the Exchange;

Note: See also paragraph 27A of Appendices 1A and 1E.
(b) if after its listing the applicant proposes to acquire all or part of the excluded business, the enlarged group must meet the trading record requirements of rule 8.05; and
(c) all connected transactions between the excluded business and the applicant after listing must strictly comply with the requirements of chapter 14A.

Note: An interest in an excluded business may consist of the following:
(i) where the business is conducted through a company, an interest as a director (other than an independent non-executive director) or a substantial shareholder of such company;
(ii) where the business is conducted through a partnership, an interest as a partner in such partnership; or
(iii) where the business is conducted as a sole proprietorship, the interest as the sole proprietor of such business.

Where such company is a holding company, the applicant may disclose the information required under rule 8.10(1)(a) for such company and its subsidiaries on a group basis.
(2) Where any of the directors of a new applicant is interested in any business apart from the applicant's business, which competes or is likely to compete, either directly or indirectly, with the applicant's business:
(a) the applicant's listing document must prominently disclose the information required under rule 8.10(1)(a)(ii) and (iii) of each director's interest in such business and any other information considered necessary by the Exchange;
(b) after listing, the directors (including any director appointed after listing) must continue to prominently disclose details as required under rule 8.10(2)(a) of any such interests (including any interests acquired after listing) in the applicant's annual reports; and
(c) the directors must also prominently disclose in the applicant's annual reports any change in details previously so disclosed in the applicant's listing document or annual reports.
Notes:
(1) A director's interest in such a business may consist of the following:
(i) where the business is conducted through a company, an interest as a director (other than an independent non-executive director) or a substantial shareholder of such company;
(ii) where the business is conducted through a partnership, an interest as a partner in such partnership; or
(iii) where the business is conducted as a sole proprietorship, the interest as the sole proprietor of such business.
Where such company is a holding company, the applicant may disclose the information required under rule 8.10(2) for such company and its subsidiaries on a group basis.
(2) Listed issuers must comply with the disclosure requirements under rule 8.10(2)(b) and (c) commencing from the first annual report published after 30th April 2000.
(3) The disclosure requirements under rule 8.10(2) do not apply to independent non-executive directors of a new applicant or a listed issuer.
(3) In cases where rule 8.10(1) or (2) applies, the Exchange may require the appointment of a sufficient number of independent non-executive directors to ensure that the interests of the general body of shareholders will be adequately represented.

Note: Directors are reminded of their fiduciary duties to the issuer and that they must, in the performance of their duties as directors, avoid actual and potential conflicts of interest and duty. Such considerations may arise in situations where directors have business interests which are similar to those of the issuer or where it is proposed that the issuer makes any decision to acquire or not to acquire any such asset or business. The attention of the directors is also drawn to the duty of directors not to profit themselves to the detriment of the issuer.