Stock Exchange Hears Tianhe Appeal

Tianhe Chemicals Group will appeal its delisting from the Hong Kong Stock Exchange on May 15, more than half a decade after trading of its shares was suspended over failure to meet stock exc-hange requirements.

The China-based company will present its arguments before the Exchange’s Listing Committee, after Tianhe was informed in March it was being delisted from the world’s largest stock market outside of the United States. The hearing was first scheduled for April 24, but was postponed due to the Covid-19 pandemic. Neither the public nor news organizations are allowed at the hearing.

Tianhe is expected to argue it is making strides in cleaning up its financial situation, but needs additional time, according to a source. In a stock exchange filing dated May 4, the company stated it continues to struggle after suffering setbacks linked to the pandemic, including shuttering its Chinese operations.

“The company is now making changes to fulfill the requirements of the government,” Tianhe’s statement read. “As affected by the outbreak, the company’s production operations have not resumed ... The business operations and production will resume after obtaining the government’s approval.” In March, China began allowing parts of its manufacturing sector to restart; however, Tianhe is uncertain when Beijing will allow the company to start its own production.

If the Listing Committee upholds its original decision to delist the company, Tianhe can appeal to the Listing Review Committee for an additional hearing. The Listing Review Committee would rehear the case and either uphold or overturn the previous ruling. There is nothing in the stock exchange’s rules about a decision timeframe, according to Jeffery Ng, the exchange’s senior vice president for corporate communications.

Tianhe, which manufactures lubricant additives and specialty fluorochemicals, was suspended in March 2015 failing to meet the deadline for filing its 2014 financial results. The audit of those results was not finished due to questions about the company’s accounting of some items and about internal controls in the reporting of some information. The stock exchange subsequently echoed some of those concerns and ordered that Tianhe address them before trading of its stock could resume. The company has yet to satisfy those concerns or to file financial reports since 2014.

The delisting action came about a year after the Hong Kong Stock Exchange revised its governing rules and regulations, including how long a publicly-traded company can remain listed while suspended. Under the new rules, a company can be kicked off the exchange after the trading of its stock has been suspended for 12 months.