Raffles Interior Limited Receives Serious Complaint Letter: Potential Regulatory and Governance Breaches Under Investigation

Date: 29 April 2026
Company: Raffles Interior Limited (Hong Kong Stock Code: 1376)

Key Highlights

• The Board of Raffles Interior Limited has received an anonymous complaint letter alleging serious breaches of Hong Kong securities laws and listing rules.
• The complaint involves allegations of undisclosed substantial shareholding, concert party arrangements, and possible special deals between significant shareholders.
• Both Mr. Zheng Nenghuan (a suspended executive director) and Mr. Cao Chengpeng (a potential substantial shareholder) are at the center of these allegations.
• The company is undertaking an independent investigation, but Mr. Zheng has not cooperated fully, raising further governance concerns.
• Recent share transactions involving a significant premium have been flagged as possibly questionable.

Detailed Breakdown of Allegations and Developments

1. Alleged Breach of Disclosure of Interests by Mr. Cao

• The complaint accuses Mr. Cao, the ultimate beneficial owner of Union Expert Investment Holding Limited, of failing to properly disclose his aggregate shareholding in Raffles Interior Limited.
• Mr. Cao’s publicly disclosed holding was around 9.30% of the company’s shares. However, the complaint alleges that he was acting in concert with at least three other shareholders, who together controlled additional stakes of 4.90%, 4.80%, and 4.50%, potentially bringing Mr. Cao’s effective control closer to 20%.
• The complaint references legal documents where Mr. Cao allegedly declared a 20% holding in the company, and points to connections among the supposed concert parties—including shared residential addresses and share transactions involving Mr. Cao’s daughter.
• If substantiated, this could represent a significant breach of Part XV of the Securities and Futures Ordinance, which mandates accurate disclosure of interests by substantial shareholders—a factor that could trigger regulatory action or penalties.

2. Suspected Breach of Takeovers Code and Special Deal Arrangements by Mr. Zheng

• The complaint further alleges that Mr. Zheng, who was an offeror in a mandatory general offer that closed in October 2025, may have breached Rule 25 of the Takeovers Code.
• Under Rule 25, the offeror must not, within six months of the offer close, enter into any arrangements with shareholders that provide favourable terms not available to all shareholders.
• The complaint claims Mr. Zheng had intentions, and took steps, to enter a special deal with Mr. Cao, including providing “certain favourable returns” to Mr. Cao for his shareholding.
• There are suspicions that Mr. Zheng and Mr. Cao could manipulate shareholder meetings, especially in connection with the proposed Acquisition of certain target assets. This Acquisition, allegedly at a significant premium, could be a vehicle for Mr. Zheng’s personal gain and may involve breaches of PRC foreign exchange regulations.

3. Red Flags on Share Transactions

• Union Expert Investment Holding Limited recently sold its entire direct shareholding (93,000,000 shares) in the company via an off-market transaction at HK\$0.2709 per share—a substantial premium to the market price of HK\$0.14 on the transaction date.
• The context and terms of this transaction are under scrutiny as they may relate to the alleged special deal and disclosure issues.

4. Company’s Response and Ongoing Investigation

• Upon receipt of the complaint, the Company sought clarifications from Mr. Zheng, including a request for a signed statement denying any arrangements with other shareholders. Mr. Zheng denied the allegations but refused to provide a written statement.
• The Company is still trying to obtain the documentary evidence referenced in the complaint.
• It was also noted that Mr. Zheng has not complied with statutory duties to update and file accurate disclosure of interest forms, a repeated governance concern that carries potential criminal penalties.
• An Independent Board Committee, with external legal advisors, is continuing to investigate the matter. The committee’s ability to conduct a comprehensive review is hampered by Mr. Zheng’s lack of cooperation.
• The Company will update shareholders and the market as material developments arise.

Implications and Investor Guidance

• The seriousness of the allegations—potential breaches of the Takeovers Code, undisclosed concert party arrangements, lack of cooperation from a key director, and questionable share transactions—could significantly impact Raffles Interior Limited’s share price and regulatory standing.
• Shareholders are strongly advised to exercise caution in dealing with the company’s shares pending further disclosures.

Board Statement

The Board, led by Acting Chairman Wong Heung Ming Henry, has reiterated its commitment to an independent and thorough investigation and will keep shareholders informed of major updates.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should make their own assessment and seek professional guidance before making any investment decisions. The situation remains under investigation, and the facts may evolve as new information emerges.

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