Guangdong Dtech Technology Co., Ltd. (“DTECH”) has published its updated Articles of Association, effective upon the forthcoming listing of its H shares on the Hong Kong Stock Exchange. The document aligns corporate governance with the PRC Company Law, CSRC rules, Shenzhen Stock Exchange ChiNext regulations and Hong Kong Listing Rules.
Key Highlights
1. Corporate Profile and Capital • Registered capital is set at RMB 410.00 million. • Current issued share capital comprises A shares listed on Shenzhen (50.00 million IPO shares in Nov-2022) and an upcoming tranche of H shares to be listed in Hong Kong. • The Company and its subsidiaries are prohibited from providing financial assistance for third-party share acquisitions, except under an employee stock-ownership plan and within a 10% cap of issued capital.
2. Governance Framework • Board of Directors: nine members, including at least three independent directors. • Audit Committee (three non-executive directors, two of them independent) now assumes all supervisory duties in place of a traditional Supervisory Board. • Other board committees include Strategy, Nomination, and Remuneration & Appraisal, each chaired by or majority-composed of independent directors. • Senior management comprises a general manager, deputy general managers, a financial controller and the board secretary; directors can serve concurrently as executives only if they represent no more than half of the board.
3. Shareholder Rights & Meetings • Annual general meetings to be held within six months of each fiscal year-end; extraordinary meetings must be called within two months when specified triggers occur (e.g., losses hitting one-third of share capital or board vacancies). • Shareholders holding ≥10% for 90 consecutive days may convene meetings if the board fails to do so. • Connected shareholders must abstain from voting on related-party transactions exceeding RMB30 million and 5% of net assets. • Directors/senior executives or shareholders with >5% stakes are subject to six-month trading restrictions to prevent short-swing profits.
4. Capital Management • Share buy-backs are permitted only for six specific purposes, including employee incentive plans and bond conversion, and are capped at 10% of issued shares with strict cancellation/transfer timelines. • Guarantees, financial assistance and major asset transactions require escalating approvals up to the shareholders’ meeting once preset thresholds—linked to net assets or total assets—are exceeded.
5. Profit Distribution Policy • Annual cash dividends must be no less than 10% of distributable profits. • If operating cash flow remains solid, interim dividends are encouraged; dividend decisions require majority board and Audit Committee approval and subsequent shareholder endorsement. • Differentiated payout ratios apply depending on growth stage and capital expenditure plans, with cash dividends ranging from 20% to 80% of total distributions.
6. Party Organization • Consistent with CPC requirements, DTECH will establish an internal Party organization and guarantee resources for related activities.
7. Dissolution & Liquidation • Triggers include expiry of operating term, shareholder resolution, merger/division, licence revocation, or court-ordered dissolution. • Directors must form a liquidation committee within 15 days once dissolution conditions arise.
8. Effective Date The revised Articles take effect on the date DTECH’s H shares commence trading on the Hong Kong Stock Exchange, subject to regulatory filings and approvals.
This comprehensive overhaul positions DTECH’s governance and disclosure standards to meet dual-listing requirements and enhances protections for both A-share and prospective H-share investors.