FAST NEWS: Venus Medtech lends to directors without required disclosure
The latest: Venus Medtech (Hangzhou) Inc. (2500.HK) said on Monday it lent about 629 million yuan ($91 million) to executive director Zi Zhenjun and Chairman Zeng Min between June 2021 and January this year, and charged interest at an annual rate of 3%.
Looking up: The company said the loan used some of the company’s idle funds more efficiently, and interest income brought stable income and cash flow. It added the principal amount and interest for the two loans have been repaid.
Take Note: The two loans are connected transactions and subject to reporting and announcement requirements under Hong Kong Stock Exchange listing rules. The company said it inadvertently failed to comply with the relevant requirements and engaged an independent financial advisor on the matter, and will take remedial measures.
Digging Deeper: Founded in 2009 and listed in Hong Kong in 2019, Venus Medtech produces and sells structural heart disease transcatheter therapy products. It has received approval for four products, which it now sells in nearly 30 countries in Asia, Europe, South America and North America. As of the end of last year, the company recorded a net cash outflow of over 1.8 billion yuan in operating and investment activities. It also had only 1.88 billion yuan in cash and cash equivalents, raising potential questions about its decision to lend money to its top managers.
Market Reaction: Venus Medtech’s shares fell on Tuesday, closing down 2.1% at HK$10.16 by the midday break. The stock now trades near the lower end of its 52-week range.
Translation by Jony Ho
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