The Stock Exchange of Hong Kong has censured Fantasia Holdings (HKG:1777) and Colour Life Services Group (HKG:1778) over a disclosure breach related to the disposal of Link Joy Holdings, a Thursday filing with the Hong Kong bourse said.

The bourse also imposed a prejudice to investors' interest statement against the former chairman and CEO of the two firms, Pan Jun, while also mandating regulatory training for the relevant directors of the two firms at the time of the disposal.

On Sept. 28, 2021, Colour Life agreed to sell unit Link Joy to a subsidiary of Country Garden Services (HKG:6098). During this time, Fantasia was the controlling shareholder of Colour Life.

On Sept. 30, 2021, Colour Life borrowed 700 million yuan from Country Garden Property Services HK, which Pan failed to consult with the board about.

As security for the four-day loan, the lender was given the right to request Colour Life to transfer Link Joy to it if no payment was made on the due date and if Fantasia or Colour Life defaulted on external debts worth at least 10 million yuan.

Both default events occurred on Oct. 4, 2021, and Country Garden enforced its right for the share transfer.

However, the parties only disclosed the VSD (very substantial disposal) on Oct. 26, 2021, which violated the HKEX rule stating that a listed issuer must publish an announcement as soon as possible after the terms of a VSD have been finalized.

"The companies admitted that the disposal of Link Joy constituted a VSD, and that they had breached the applicable announcement, circular, and shareholders' approval requirements," according to the statement.