Core Viewpoint - The Hong Kong Stock Exchange has taken disciplinary actions against Universal International Group Limited and six former directors due to violations of the GEM Listing Rules, marking the first such action since the amendments to the listing rules in 2021 [1][3]. Group 1: Disciplinary Actions - The Hong Kong Stock Exchange condemned Universal International Group Limited and issued disqualification statements against former chairman Lin Ye and other directors for being unsuitable to serve as directors or senior management [1]. - A statement was issued against former independent non-executive director Guo Liying for potentially harming investor interests [1]. - The Exchange also mandated training for former COO Luo Jiashun due to his role in the violations [1]. Group 2: Investigation Findings - An investigation revealed that from July to October 2022, Lin Ye facilitated fictitious leasing and purchase agreements for two Chinese subsidiaries, which were found to lack commercial substance and were part of a fraudulent scheme to misappropriate funds [2]. - The two subsidiaries accounted for over 97% of the group's total revenue, yet Lin was the only director overseeing these operations, indicating a lack of proper governance [2]. - Other directors, including Ou Zhaochong, Xiao Yiliaog, and Yu Huachang, failed to implement effective internal controls or supervision over the Chinese operations, allowing Lin to operate without adequate oversight [2]. Group 3: Violations of Listing Rules - The Hong Kong Stock Exchange determined that Lin abused his powers as a director, violating the GEM Listing Rules, while other directors failed to fulfill their responsibilities, also violating the rules [3]. - Ou Zhaochong was found to have pushed for a revised purchase agreement despite knowing it did not include any prepayment obligations, attempting to rationalize problematic prepayments [3]. - Luo Jiashun, responsible for overseeing the leasing operations, failed to report discrepancies regarding property ownership, leading to the issuance of inaccurate public announcements by the company [3].