Chapter 11

Due Diligence Guidelines –

Connected Persons and Connected Transactions

Appendix I – Listing Decisions Published by the Stock Exchange Involving Connected Transactions

Description

Listing
Decision Reference Number

First Release Date
(Last Update)

1. Whether independent expert’s opinion in connected transaction could be waived

LD21-1

Jan-01
(Jul-14)

2. Share options to director – Whether this would fall within Chapter 14 or Chapter 17 of the Listing Rules

LD29-3

Sep-01 (Sep-09)

3. Whether Shareholder X could purchase shares pursuant to an anti-dilution provision where it was also a connected client of one of the distributors of the shares in the initial public offering of Company A

LD44-2

1Q 2005

4. Whether the Stock Exchange would deem the Purchaser as a connected person of Company A upon completion of the Transaction under Rule 2.04 of the Listing Rules

LD63-1

Nov-08

(Jul-14)

5. Whether Parent Shareholders were connected persons of Company A under the Listing Rules by virtue of their substantial interests in Parent Company, and if not, whether the Stock Exchange would deem the Parent Shareholders to be connected persons of Company A 

LD63-2

Nov-08

(Jul-14)

6. Whether the Purchaser would be regarded as a connected person of Company A in respect of Transaction A 

LD63-3

Nov-08

(Jul-14)

7. Whether the Stock Exchange would exercise its power to deem the REIT as a connected person of Company A in respect of the Company Transactions

LD63-5

Nov-08

(Jul-14)

8. Whether Company A would be required to aggregate the Transactions and treat them as if they were one transaction Rule 14A.25 of the Listing Rules 

LD64-3

Nov-08

(Jul-14)

9. Whether Company A would be required to aggregate the proposed Transactions under Rule 14A.25 of the Listing Rules

LD64-4

Nov-08

(Jul-14)

10. Whether Company A must before listing release Parentco’s guarantees of its existing banking facility to demonstrate its financial independence from Parentco?

LD69-1

Jul-09

11. Whether each of the Relevant Shareholders had a material interest in Company X’s proposed privatisation of the Subsidiary and must abstain from voting on the resolution to approve the proposal at the general meeting of Company X

LD73-2

Oct-09

(Jul-14)

12. 1. Whether the Stock Exchange would grant a waiver to Company A from strict compliance with Rule 14.69(4)(a)(i)  of the Listing Rules in respect of the accountants’ report on the business being acquired under the proposed Merger.  2. Whether Rules 14.71 and 14A.59(17) of the Listing Rules would apply to the proposed Merger

LD74-3

Oct-09

(Jul-14)

13. 1. Whether Company X should apply the percentage ratios to both the Placing and the Top-up Subscription to determine the transaction classification under Chapter 14 of the Listing Rules.  2. Whether the Stock Exchange would grant a waiver to Company X from the major transaction requirements in respect of the Placing and the Top-up Subscription

LD75-3

Oct-09

(Jul-14)

14. Whether the proposed distribution of Subsidiary B’s shares in specie by Company A would be regarded as a transaction for Company A under Chapter 14 and/or Chapter 14A of the Listing Rules

LD75-4

Oct-09

(Nov-15)

15. Whether the deposits placed by Company A or its subsidiary with the Banks were connected transactions subject to Chapter 14A of the Listing Rules

LD76-1

Oct-09

(Jul-14)

16. Whether entering into a management contract for part of the Complex with the Management Company constituted a connected transaction for Company A

LD76-2

Oct-09

(Jul-14)

17. Whether Company X would be required to aggregate the transactions with Company A and Company B and treat them as if they were one transaction under Rule 14A.25 of the Listing Rules

LD76-3

Oct-09

(Jul-14)

18. Whether the Stock Exchange would grant Company X a waiver and not require written agreements for the continuing connected transactions with the Partners

LD82-1

Dec-09

(Jul-14)

19. Whether to allow a continuing connected transaction to exceed three years with an annual cap expressed as a percentage of Company A’s gross revenues

LD88-1

May-10

20. Whether the Stock Exchange would waive the profit forecast requirements under the Listing Rules regarding a valuation report on the Target in Company A’s announcement and circular

LD93-3

Jun-10

(Jul-14)

21. Whether the Stock Exchange would impose additional requirements under Rule 2.04 of the Listing Rules on Company A’s proposed distribution in specie of Subsidiary B’s shares

LD93-4

Jun-10

(Jul-14)

22. Whether certain special rights available only to the Investor under the convertible bonds would comply with the general principles in Listing Rule 2.03

LD99-3

Jul-10

(Jul-14)

23. Whether the Manager was a connected person of Company A because it held shares in Company A for its clients

LD22-2011

Dec-11

(Jul-14)

24. Whether the Stock Exchange would waive certain connected transaction requirements for the possible issue of new A shares by Company X to its connected persons under a proposed public offer in the Mainland

LD16-2011

Jul-11

(Jul-14)

25. Whether the Stock Exchange required aggregation of Company A’s construction contracts with each of Companies C and D

LD13-2011

Jun-11

(Jul-14)

26. Whether the Stock Exchange required aggregation of the agreements between Company A and the Parent Company for (i) the Parent Group contracting out certain system works to Company A; and (ii) Company A sub-contracting some of the works back to the Parent Group

LD14-2011

Jun-11

(Jul-14)

27. Whether the Exchange would accept Company A’s proposed alternative revenue ratio for classifying certain continuing connected transactions with Company B

LD60-2013

Apr-13

(Jul-14)

28. Whether the Exchange would accept Company A’s proposed alternative revenue ratio for classifying transactions under Chapters 14 and 14A

LD61-2013

Apr-13

(Jul-14)

29. Whether the Stock Exchange would waive the annual review and reporting requirements for a continuing connected transaction between Company A and Company B

LD63-2013

Apr-13

(Jul-14)

30. Whether the guarantee provided by Company A for a loan facility granted to the Borrower was subject to the connected transaction requirements

LD78-2014

Jan-14

(Jul-14)

31. Whether the amendments to the non-competition undertaking given by the Holding Company to Company A would require independent shareholders’ approval

LD79-2014

Jan-14

(Jul-14)

Disclaimer

HKCFEF Limited and the contributing law firms, accountants and sponsors are not offering these due diligence guidelines as legal, financial or professional advice or services and they should not be relied upon as such. These due diligence guidelines should not be used as a sole basis for any decision, action or inaction and are not meant to serve as a substitute for the advice of qualified professionals. See here for the full terms and conditions.

Connected Persons and Connected Transactions Listing Decisions

Hong Kong Stock Exchange Listing Decisions

Whether Independent Experts Opinion In Connected Transaction Could Be Waived

Appendix I Listing Decisions Published by the Stock Exchange

Rule 14 of the Listing Rules

Acceptability of Written Shareholders Certificate in Lieu of Shareholders Meeting

Hong Kong Securities and Futures Commission (SFC)

Hong Kong Stock Exchange Listing Rules

Share Options to Director

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