* SFC seeking disqualification of former chairman, directors
* Regulator says directors failed to query Hanergy business model
* Hanergy shares suspended since 2015 pending SFC investigation
* Hanergy in negotiations with SFC to resume trading
By Michelle Price
HONG KONG, Jan 23 (Reuters) - Hanergy Thin Film Power Group said on Monday its former chairman Li Hejun and four directors would not contest legal proceedings brought by the regulator seeking to bar them following an investigation into the solar panel maker as it seeks to resume trading.
The announcement forms part of a broader attempt by the Hong Kong-listed company to negotiate an agreement with the Securities and Futures Commission (SFC) to resume trading in its shares which have been suspended for more than 18 months, the company said in a stock exchange filing.
Hanergy asked the Hong Kong stock exchange to suspend trading in its shares on May 20, 2015, after the company lost half its $40 billion market value in just 24 minutes.
The SFC announced eight days later it was investigating Hanergy and subsequently directed the bourse to extend the suspension indefinitely.
The investigation into Hanergy, among the most high-profile ever conducted by the SFC, has raised fears over widespread market manipulation in Hong Kong, denting the city’s reputation as a global financial centre.
On Monday, the SFC said it had commenced the legal proceedings against Li and four directors in the Court of First Instance because they had failed to question a series transactions in which Hanergy sold solar panel systems to its Beijing-based parent, Hanergy Holdings Group and its affiliates, even though these deals were not in Hanergy’s best interests.
The disqualification orders could see Li and the other four directors barred from being a director or being involved in the management of any Hong Kong corporation for up to 15 years.
The SFC is also is also seeking a court order requiring Li to ensure Hanergy Holding Group and the relevant affiliates pay the outstanding receivables due to the Hong Kong-listed entity and execute a guarantee securing their payment.
In its exchange filing, Hanergy said Li and the four directors did not intend to contest the SFC court proceedings in a bid to meet one of the two key conditions outlined by the SFC for the resumption of trading.
Li stepped down in May 2016 following a boardroom shakeup designed to improve the company’s corporate governance. At the time Li confirmed in an exchange filing he had no disagreement with the board and there were no matters relating to his resignation that need be brought to the attention of the exchange or shareholders. Li told local media last year he was confident the company would resume trading.
Hanergy said it was also trying to meet the SFC’s second condition, which requires it to publish a disclosure document detailing information on Hanergy’s business, financial performance and prospects to address the SFC’s concerns.
“The company has and will continue to use its best endeavours to fulfil the above-mentioned requirements and will seek to resume trading of its shares on the Stock Exchange as soon as possible,” it said in the filing.
A spokesperson for Hanergy decline to comment further. The independent directors could not immediately be reached for comment.
The first hearing of the SFC’s court petition will be on 31 May 2017.
Reporting by Michelle Price; additional reporting by Clare Jim, editing by David Evans