【Zhenzhuo Hong Kong Stock Experts】Strait Oil & Gas (00852.HK) Advances on the Road to Resumption of Trading Through Rectification

In the Hong Kong stock market, suspensions due to failure to disclose financial reports on time are not uncommon. Strait Petrochemical (00852.HK), which is currently suspended, $Strait Petrochemical (HK|00852)$ is actively promoting the resumption process through systematic rectification measures. The announcement released last Friday showed that the company has made key progress in governance and strengthening the internal control system.

Court documents clearly disclose the subject of the lawsuit and the responsibilities of directors

According to the announcement disclosed by Strait Petrochemical on October 17, the company's indirect wholly-owned subsidiary, Strait Petrochemical Chemical Co., Ltd., has legally filed a lawsuit with the High Court of the Hong Kong Special Administrative Region to pursue legal liability against former directors Yao Guoliang and Tan Xiao. The announcement pointed out that the two were suspected of violating the fiduciary duties of directors in the crude oil transaction at the end of 2024 and needed to bear economic compensation of approximately RMB 37 million.

The above announcement is based on the expression of public documents (Hong Kong High Court Case No. HCA 1915/2025). The plaintiff is Strait Petrochemical Chemical Co., Ltd., a wholly-owned subsidiary of Strait Petrochemical. The first defendant, Yao Guoliang, served as a director of the plaintiff from November 4, 1999, to January 25, 2025; the second defendant, Tan Xiao, served as a director of the plaintiff from November 11, 2024, to January 25, 2025. Other directors Wang Jiansheng and Ma Yi also terminated their duties on January 25, 2025. The court documents clearly pointed out that, as directors of the company, the defendants must strictly perform their fiduciary duties, including maintaining the best interests of the company with integrity and loyalty, managing and protecting the company's assets with caution, exercising their powers only for legitimate purposes, and performing their statutory duties with reasonable skills and diligence.

Key events in crude oil transactions exposed

According to the summons and statement of claim, in September 2024, Yao Guoliang signed multiple crude oil purchase and sale agreements and supplementary agreements on behalf of the company, involving the transaction of 1.9 million barrels (±5%) of crude oil, with counterparties including Shandong Energy Group International Trade Development Co., Ltd. and Upower Energy Company Limited. However, the oil tanker "CONSTANCE" did not actually arrive at the port of Santana, Brazil, but the defendants submitted forged quality certificates and certificates of origin, and successfully withdrew RMB 379 million by using false documents to obtain a letter of credit issued by the Agricultural Bank of China, Guangdong Branch.

It is worth mentioning that between December 30, 2024, and January 23, 2025, the defendants held five false board meetings without notifying other directors, transferring huge sums of money to the Singaporean affiliate Strong Petroleum Singapore Pte Ltd, and then paying Shandong Energy in the name of "contract refund." All meetings constituted invalid resolutions in accordance with the law.

Previously, the company announced on February 10 that Yao Guoliang resigned as CEO and announced the termination of Tan Xiao's co-CEO position due to "a complete breakdown of trust." The company emphasized that although it had not received formal confirmation of his resignation, based on the principle of prudence, it was deemed effective on January 24.

Independent investigation clarifies allegations against former CFO and other executives

Strait Petrochemical issued an announcement on the evening of December 26, 2024, to hold former CFO Guan Peishan accountable. After nearly a year of in-depth investigation, the company announced the results of an independent forensic investigation on September 30, 2025. After a professional team from an internationally renowned accounting firm reviewed all expenditure records from 2020 to 2024, it was confirmed that Guan Peishan, Wang Jiansheng, Wang Peng, and others did not deliberately misappropriate assets, and there was no evidence to support the double compensation claim. Pages 6 to 7 of the announcement detail the complete chain of evidence for the compliance of the relevant expense declaration and approval process.

Rectification measures promote the breakthrough of resumption

Public information shows that Strait Petrochemical achieved revenue of HK$895 million in the first half of 2024, a significant increase of 83.02% year-on-year; the net loss narrowed to HK$9.37 million, of which the loss attributable to shareholders was HK$8.75 million. Despite governance challenges, the company's fundamentals remain relatively stable.

Strait Petrochemical, which is currently suspended, is strictly following the Hong Kong Stock Exchange's resumption guidelines to systematically advance rectification work: from the disclosure of the results of the independent forensic investigation on September 30 to the formal launch of legal accountability procedures for former executives on October 15, a series of transparent and standardized rectification measures have demonstrated the company's determination to reshape governance.

With the in-depth implementation of the rectification work, the company is expected to meet the resumption conditions as soon as possible and restore investor confidence. Subsequent progress will focus on the dynamics of the Hong Kong Stock Exchange's resumption review and the optimization of the internal control system.

(Written by: Greater Bay Area Family Office Association, Li Huifen) (The author does not hold the above stocks)