Hong Kong: Li Hejun, once listed as China`s richest man, has been banned from being a director of any Hong Kong company for eight years over his management of energy firm Hanergy which saw its shares implode in 2015.
The tycoon stepped down as chairman of Hong Kong-listed Hanergy Thin Film in May 2016, almost a year after the firm`s shares plunged 47 per cent in less than half an hour wiping $19 billion off its market capitalisation.
The city`s securities watchdog brought a case before the High Court in January, calling for a 15-year ban on Li.
The Securities and Futures Commission (SFC) said Li had failed to question the viability of Hanergy`s business model which relied on sales to its unlisted mainland parent Hanergy Holding Group Limited and its affiliates as its main source of revenue.
The court judgement released on Monday said that Li had put himself in a position where there was a clear conflict of interest “and preferred the interests of Hanergy Holding”.
It said Li had failed to recover very substantial “receivables” worth HK$3.28 billion in 2014 and over HK$2 billion in 2015 from Hanergy Holding.
It banned the 50-year-old from serving as a director or at the management level of any listed or unlisted company for eight years.
“Listed company directors should always put the company`s interests first,” Thomas Atkinson, executive director of enforcement at the SFC, said.
“In this case, these directors flouted their responsibilities by putting the interests of connected parties before that of the listed company,” he added.
Four other directors of Hanergy were also banned for between three and four years for failing to make disclosures about the viability of the business model.
Hanergy Thin Film, which saw its shares suspended since May 2015, said Monday that the judgment was one step towards the resumption of trade in its shares.
The firm captured the attention of investors after growing more than sixfold to become the world`s largest solar power company by market value ahead of the collapse.
The meteoric rise in share price once gave Li the title of China`s richest man, according to one wealth survey, with Forbes citing his current worth to be $1.93 billion.
The collapse of Hanergy and some other top-performing stocks on the Hong Kong stock market prompted critics to question the oversight of regulators.