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Monday 25 January 2016

16-013MR ZhongHuanYun Holdings Group Limited pays penalty for alleged continuous disclosure breach

ZhongHuanYun Holdings Group (ZHY), a company listed on the Sydney Stock Exchange (formerly Asia Pacific Stock Exchange), has paid a penalty of $33,000 after ASIC served an infringement notice on the company for allegedly failing to comply with its continuous disclosure obligations.

ASIC made enquiries into ZHY's compliance with its continuous disclosure obligations following the announcement of its half year financial report on 17 March 2015.  The report showed a consolidated profit after income tax of $82,539 for the half year ending 31 December 2014.  This was a 92% decrease from the previous corresponding half year ended 31 December 2013.

'Timely disclosure of the financial performance of listed companies is inherent to fair, orderly and transparent markets,' ASIC Commissioner John Price said.

'As demonstrated by our action against ZHY, when we identify issues with a company's disclosure to the market, we will take action.'

Infringement Notice

The ZHY corporate group is involved in the provision of logistics support services to the e-commerce industry.  ZHY is a non-operating Australian holding company that has direct and indirect subsidiaries located in Hong Kong and mainland China.

On 14 February 2014, ZHY's mainland China based subsidiaries provided internal accounting records for the half year ending 31 December 2014 to their auditor for the purpose of an audit review. 

ASIC alleges that by 14 February 2015, ZHY was aware that its operating profit for the half year would be materially less than its operating profit from the previous corresponding period.

ASIC alleges that by failing to inform the Sydney Stock Exchange of this information from 14 February 2015, ZHY was in breach of its continuous disclosure obligations.

Background

ASIC issued ZHY with an infringement notice and the company has complied with the infringement notice and paid the penalty.

The Corporations Act 2001 (the Act) provides that compliance with infringement notices is not an admission of guilt or liability.

ZHY is not, by reason of its compliance with the notice, regarded as having contravened section 674(2) of the Act.

Details of the infringement notice will be published in the ASIC Gazette.

Last updated: 30/03/2021 09:39