Hall of Shame

Energy

Southern Energy Holdings (1573 HK)

Year: 2019

Southern Energy Holdings Group Limited, a Chinese company, mines and sells coal products. The Company mines and markets anthracite coal, big lump coal, medium lump coal, clean coal, fine coal, and other products. Southern Energy Holdings Group conducts business in China.   It listed on the Hong Kong Stock Exchange in July 2016 raising HK$212.4M in it's IPO.  It was previously known as China Unienergy Group, prior to changing its name in December 2018.

February 6, 2017 - SFC issued a high concentration warning; i.e. a high concentration of shareholding in a small number of shareholders.

July 29, 2019 -  Emerson Analytics issued a report "Southern Energy – Revenue Inflated by Five Times".  In the report Emerson said the Guizhou-based coal producer's operations are all carried out by a wholly-owned subsidiary,.  Therefore it's financial results should be on par with those reported by the listed company,  Emerson said filings from China's State Administration for Industry and Commerce showed that the subsidiary's revenue in 2016 was only 12 percent reported by Southern Energy, while in 2017 it was 21 percent.   It also said that the actual output for 2018, at the company's three mines, was probably only one-third of the volume reported by Southern Energy.  It concluded that Southern Energy overstated its revenue, from 2013 to 2018, by about five times, and its controlling shareholder Xu Bo has maintained a Ponzi scheme by raising funds through selling and pledging his shares for loans.

August 2, 2019 - Southern Energy issued a response to the report in which it said most of the data cited in the Report are biased and unfair, the allegations on the Group’s financials and valuation are frivolous and unfounded. The Group pointed out that all of its historical financial information disclosed in its prospectus for the IPO and its annual financial information published since then has been audited by reputable independent accountants, Deloitte Touche Tohmatsu.

August 8, 2019 - Mr. Choy Wing Hang William resigned as an independent non-executive Director and the chairman of the remuneration committee and a member of each of the audit committee and nomination committee of the Company with effect from 8 August 2019 due to his other work commitments.

August 15, 2019 - Mr. Fu Lui resigned as an independent non-executive Director and the chairman of the audit committee of the Company with effect from 15 August 2019 due to his other work commitments.

October 21, 2019  - Deloittes resigned as Auditors. In it's announcement, Southern Energy said that the company and Deloitte could not reach a consensus on the progress of appointing a competent forensic accounting firm by the audit committee of the Company in relation to the allegations made in the report issued by Emerson Analytics Co. Ltd. and the commencement of such forensic investigation.

October 31, 2019 -  Mr. Lee Cheuk Yin Dannis resigned as an independent non-executive Director and a member of each of the audit committee, the remuneration committee and the nomination committee of the Company with effect from 31 October 2019 for personal reasons.

November 29, 2019  - Ms. Kam Mei Ha, Wendy tendered her resignation as a joint company secretary of the Company with effect from 1 December 2019

December 18, 2019 -  Southern Energy announce that Guizhou Union, a wholly owned subsidiary of the Company suspended the operation of the four mines in Guizhou Province, owned by the Group, in August 2019.   Mining operations were suspended in connection with concerns over the safety of mining operations.


SFC: High Concentration of Shareholding  Feb.. 6, 2017

Emerson Analytics: Southern Energy – Revenue Inflated by Five Times  July 29, 2019
Southern Energy: Response To Report   - Aug. 2, 2019

Southern Energy: Resignation of Auditor  - Oct. 21, 2019

Southern Energy: Annual Report - 2018
China Unienergy: Annual Report - 2017
China Unienergy: Annual Report - 2016
China Unienergy: Prospectus - June 2016
 

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