Hontex International Holdings Company Limited (Hontex) today issued an offer document for the repurchase of its shares (Repurchase Offer) following orders made by the Court of First Instance in legal proceedings brought by the Securities and Futures Commission (SFC) (Note 1).
The Repurchase Offer is made to all shareholders holding Hontex shares on 20 June 2012, being the date of the Court of First Instance’s order, who subscribed for or bought Hontex shares and still hold them.
The Repurchase Offer, which is not available to Hontex’s controlling shareholders, is the result of legal proceedings brought by the SFC against Hontex in relation to false and misleading statements in its IPO prospectus.
If all shareholders accept the Repurchase Offer, Hontex will pay out a total of $1.03 billion to approximately 7,700 shareholders.
The Repurchase Offer is being administered by court-appointed Administrators and will remain open for acceptance for 35 days until 4:00 pm on 29 October 2012 (Note 2).
Investors holding Hontex shares are encouraged to carefully read the offer document issued by Hontex dated 24 September 2012 (http://ir.hontex.cn/html/ir_announce.php) and on HKExnews’ website (http://www.hkexnews.hk/index.htm) relating to the Repurchase Offer and to seek independent legal or other professional advice, if needed.
The SFC has published a set of Frequently-Asked-Questions (FAQs) to assist the investing public in understanding the Repurchase Offer by Hontex.
Notes:
- The orders were made under section 213 of the Securities and Futures Ordinance following admissions made by Hontex after 12 days of trial in the Court of First Instance. Hontex agreed that the amounts stated in its IPO prospectus in respect of its turnover for the years ended 31 December 2006, 2007 and 2008 were materially false and misleading, as was its profit before tax. Hontex also agreed that the value of its cash and cash equivalents for the years ended 31 December 2007, 2008 and 30 June 2009 were materially false and misleading and the number of franchise stores disclosed in the IPO prospectus, as at 31 December 2008 and 8 December 2009, was also false and misleading. Please see SFC’s press release dated 20 June 2012.
- The Administrators are Mr Stephen Liu Yiu Keung, Mr David Yen Ching Wai and Ms Koo Chi Sum of Ernst & Young. Their fees will be paid by Hontex. The Repurchase Offer will remain open for 35 days until 4:00 pm on 29 October 2012. If the level of acceptance of the Repurchase Offer is less than 50% as at 4:00 pm on 29 October 2012, Hontex will, at the direction of the SFC and the Administrators, extend the offer period for another 28 days until 26 November 2012.