Relationship with Controlling Shareholders
Total Page：16
File Type：pdf, Size：1020Kb
THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT. RELATIONSHIP WITH CONTROLLING SHAREHOLDERS CONTROLLING SHAREHOLDERS Immediately upon completion of the [Redacted] and the [Redacted], without taking into account A1A27A any Shares which may be issued upon the exercise of the [Redacted] and any options which may be granted under the Share Option Scheme, Mr. Wong, Mr. Lo and Mr. Pong (through WGL, EFIL and PGL respectively) will each hold approximately [Redacted]% interest in our Company and in aggregate control approximately [Redacted]% of our Company’s Shares in issue. WGL, EFIL and PGL are investment holding companies of Mr. Wong, Mr. Lo and Mr. Pong, respectively. As such, Mr. Wong, Mr. Lo and Mr. Pong will continue to remain as the dominating group of Shareholders which would continue to hold a controlling interest in our Company upon completion of the [Redacted] and the [Redacted]. Further, Mr. Wong, Mr. Lo and Mr. Pong have confirmed that since they became interested in and possessed voting rights (whether direct or indirect) in our Company and our subsidiaries, they have been acting in concert and voted in unanimous manner on any proposed resolution in respect of the management, development and operations of our Group’s food and beverage operations. During the Track Record Period, save as disclosed in this document, our Group did not have any business dealings with the companies associated with or controlled by our Controlling Shareholders and there was no overlapping of business between our Group and our Controlling Shareholders. Save as disclosed in the paragraph headed “Interests of Mrs. Lo in the restaurant business” in this R11.04 section, our Directors, to the best of their knowledge, information and belief having made all reasonable enquiries, have confirmed that, none of the Controlling Shareholders, the Substantial Shareholders, our Directors and their respective close associates is interested in any business which competes, or may compete, directly or indirectly, with the business of our Company. INDEPENDENCE FROM CONTROLLING SHAREHOLDERS Having considered the following factors, our Directors believe that our Group is capable of carrying on our business independently from our Controlling Shareholders after [Redacted]. Management independence Our management and operational decisions are made by our Board and senior management. Our Board comprises three executive Directors and three independent non-executive Directors. Mr. Wong, Mr. Lo and Mr. Pong are our Controlling Shareholders. Nevertheless, we consider that our Board and senior management will function independently from our Controlling Shareholders because: (a) each Director is aware of his fiduciary duties as a Director which require, among other things, that he acts for the benefit and in the best interest of our Company and does not allow any conflict between his duties as a Director and his personal interests; (b) in the event that there is a potential conflict of interest arising out of any transaction to be entered into between our Group and our Directors or their respective associates, the interested Director(s) shall abstain from voting at the relevant board meetings of our Company in respect of such transactions, and shall not be counted in forming quorum subject to the provision of the Articles of Association; and — 185 — THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT. RELATIONSHIP WITH CONTROLLING SHAREHOLDERS (c) all our senior management members are independent from our Controlling Shareholders. Our Group has established our own management, finance, human resources, administration, procurement, sales and marketing, quality control departments which are responsible for daily operations of our Group. Operational independence We do not share operation team, facilities and equipment with our Controlling Shareholders and their associates. Our Group has also established a set of internal control measures to facilitate the effective operations of our business. Our Group’s customers and suppliers (save as those disclosed in the section headed “Continuing Connected Transactions” in this document) are all independent from our Controlling Shareholders. Our Group does not rely on our Controlling Shareholders or their respective close associates and have independent access to suppliers and customers and an independent management team to handle our day-to-day operations. We are also in possession of all relevant licences necessary to carry on and operate our business and we have sufficient workforce to operate independently from our Controlling Shareholders and their associates. Save as disclosed in the section headed “Continuing Connected Transactions” of this document and the related party transactions as set out in note 26 to the Accountants’ Report in Appendix I to this document, immediately after the [Redacted], there are no continuing connected transactions and related party transactions between our Group and our Controlling Shareholders and/or their associates. As such, our Directors are of the view that there is no operational dependence by us on our Controlling Shareholders. Financial independence We have an independent financial system and make financial decisions according to our own business needs. As of the Latest Practicable Date, our Group had certain banking facilities that were guaranteed by our Directors, details of which are set out in notes 23 and 26 to the Accountants’ Report in Appendix I to this document. Such guarantees will be released upon [Redacted] and will be replaced by corporate guarantee from our Company. All guarantees were provided by our Controlling Shareholders. During the Track Record Period, our Group had certain amounts due to/from our Controlling Shareholders and/or companies controlled by our Controlling Shareholders. Please refer to note 18 to the Accountants’ Report in Appendix I to this document for further details. All amounts due from our Controlling Shareholders and/or companies controlled by our Controlling Shareholders, which are non-trade nature, will be fully settled before the [Redacted]. Our Directors confirm that we will not rely on our Controlling Shareholders for financing after the [Redacted] as we expect that our working capital will be funded by our operating income and bank borrowings. Our own accounting department is capable of discharging the treasury functions for cash receipts and payments, accounting, reporting and internal control independently of our Controlling Shareholders and its close associates. — 186 — THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT. RELATIONSHIP WITH CONTROLLING SHAREHOLDERS INTERESTS OF MRS. LO IN THE RESTAURANT BUSINESS R11.04 As at the Latest Practicable Date, Mrs. Lo, the spouse of Mr. Lo, was interested in 89.8% interest in Giant Mind International Limited, which was interested in approximately 65.98% interest in Big Team Ventures Limited (“Big Team”), which holds the companies comprising the Jia Group. So far as our Directors are aware, Jia Group Holdings will, upon completion of a corporate reorganisation of the Jia Group, hold the companies comprising the Jia Group. The Jia Group is engaged in the business of restaurant operations in Hong Kong and Singapore and operated 10 restaurants in Hong Kong and one in Singapore as at the Latest Practicable Date. According to Ipsos, (i) Jia Group’s Hong Kong restaurants had a total floor area of approximately 2,584 sq.m. and its Singapore restaurant had a total floor area of approximately 206.06 sq.m. (ii) during the two years ended 31 December 2015, Jia Group’s revenue amounted to approximately HK$170.5 million and HK$206.5 million, respectively; and (iii) Jia Group recognised profit for the year amounted to approximately HK$4.3 million and HK$5.2 million for the two years ended 31 December 2015, respectively (excluding the [Redacted] of HK$9.8 million for the year ended 31 December 2015). Mrs. Lo was also a chairperson, chief executive officer, executive director and a controlling shareholder of Jia Group Holdings as at the Latest Practicable Date. Particulars of the restaurants operated by the Jia Group as at the Latest Practicable Date are as follows: Holding company of Name of the the relevant No. restaurant Address restaurant Cuisine 1. 208 Duecento Shop A, G/F & Portion of Shop A & Luck Wealthy Italian Otto B, 1/F, Tai Ping Mansion 208-214 Limited Hollywood Road, Sheung Wan Hong Kong 2. 22 Ships Shop No.6 G/F. Ideal Profit Spanish Commercial Portion of J Residence Corporation 60 Johnston Road, Wan Chai, Limited Hong Kong 3. Duddell’s 3/F & 4/F., No.1 Duddell Street Top Cantonese Central, Hong Kong Glorification Limited 4. Chachawan Major Portion of Lower Ground Kingswide Thai Floor & Cockloft 206 Hollywood Limited Road, Sheung Wan, Hong Kong 5. Ham & Sherry Shop 3-4, G/F., Pao Yip Building Gain Long Spanish 1-7 Ship Street, Wan Chai, Hong Corporation Kong Limited — 187 — THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT. RELATIONSHIP WITH CONTROLLING SHAREHOLDERS Holding company of Name of the the relevant No. restaurant Address restaurant Cuisine 6. Aberdeen Street LG/F and G/F., JPC Building Profit Holder British Social PMQ 35 Limited Aberdeen Street, Hong Kong 7. Meen & Rice Shop No. 113, Level 1, The Pulse Capital Cantonese 28 Beach Road, Hong Kong Creative Limited 8. Esquina Tapas 16 Jiak Chuan Road, Singapore Hidden Glory European Bar Limited 9. Fishschool Shop 1, Upper Ground Floor More Earn Western Restaurant True Light Building Limited style seafood 100 Third Street, Sai Ying Pun, Hong Kong 10.