The SFC and HKEX collaborated to discipline former directors of Universal Star for failing to disclose loans and conflicts of interest, causing prejudice to investors. The former directors resigned after being censured by the Exchange.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
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On October 23, 2025, the Securities and Futures Commission ("SFC") and the Stock Exchange of Hong Kong Limited (Exchange) undertook an enforcement action against Mr. Lu Qingxing and his son Mr. Lyu Zhufeng, former directors of Universal Star (Holdings) Limited (Universal Star). The action was initiated due to the non-disclosure of significant financial information in the company's prospectus.
The investigation centered around 13 outstanding loans totaling approximately RMB 49 million, issued by a subsidiary of Universal Star to Lu Qingxing between April 2017 and April 2019. Approximately RMB 44 million of these loans were paid to him, and as of August 2020, the loans remained unpaid. The loans were secured by a pledged property, executed without the knowledge or approval of other directors, thereby breaching listing rules and fiduciary duties.
Consequently, the SFC referred the findings to the Exchange, which imposed a 'Prejudice to Investors’ Interests Statement' (PII Statement) and censure against the pair. Lu resigned as a non-executive director on January 1, 2023, while Lyu stepped down as an executive director on July 13, 2021. Mr. Christopher Wilson, the Executive Director of Enforcement at the SFC, underscored the importance of adhering to fiduciary duties and regulatory compliance, pledging to safeguard investor interests.
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