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KNK : INSIDE INFORMATION - UPDATE FROM INDEPENDENT COMMITTEE

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01/24/2020 | 10:10am EST

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

KNK Holdings Limited

中國卓銀國際控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8039)

INSIDE INFORMATION

UPDATE FROM INDEPENDENT COMMITTEE

This announcement is made by KNK Holdings Limited (the "Company", together with its subsidiaries, the "Group") pursuant to Rule 17.10 of the Rules Governing the Listing of Securities on GEM (the "GEM Listing Rules") of The Stock Exchange of Hong Kong Limited (the "Stock Exchange") and the Inside Information Provisions (as defined under the GEM Listing Rules) under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

References are made to the announcements of the Company dated 18 July 2019, 9 September 2019, 2 October 2019, 20 November 2019 and 20 January 2020 (the "Announcements") in relation to, among others, (i) three legal letters received by the Company; (ii) Statutory Demands;

  1. Petition; and (iv) dismissal of the Petition. Capitalised terms used herein shall have the same meanings as those defined in the Announcements.

As disclosed in the Announcements, the Independent Committee was established to handle the investigation of the allegations made under the letters received by the Company and all other matters in connection therewith or arising thereform.

Upon investigation by the Independent Committee, there are reasons to believe that loans (the "Loans") were advanced by the subsidiaries of the Group to several debtors using part of the proceeds of the subscription money for the alleged bonds as disclosed in the announcement of the Company dated 18 July 2019 (the "Alleged Bonds"). The Loans of approximately HK$6.15

million were advanced by two indirect wholly-owned subsidiaries of the Company, namely, Golden Legend Capital Limited ("Golden Legend") and 金隽(深圳)控股有限公司 ("Jin

Juan"), to six debtors (the "Debtors") during the period between April and May 2019 (the "Relevant Period"). Neither the issuance of the Alleged Bonds nor the advancement of the Loans was authorized by the Board.

Based on the corporate records of the Group, it is noted that, during the Relevant Period, Mr. Sun Xiao Li ("Mr. Sun") and Mr. Gu Jintai ("Mr. Gu") were the directors of Golden Legend while Mr. Sun, Mr. Gu and Ms. Shi Lijie ("Ms. Shi", together with Mr. Sun and Mr. Gu, the "Three Directors Concerned") were the directors of Jin Juan. Mr. Sun was the executive Director of the Company (with duty suspended with effect from 18 July 2019) during the Relevant Period and resigned on 8 November 2019. Mr. Gu and Ms. Shi were the executive Directors of the Company during the Relevant Period but their duties were suspended since 18 July 2019 until their removal at the special general meeting of the Company on 13 December 2019.

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Since the Company has limited information on the Loans and the Alleged Bonds, the Company repeatedly requested the Three Directors Concerned for details of the Loans and the Alleged Bonds, including without limitation, information of the Alleged bonds, information of the Debtors and relevant supporting documents by way of emails and letters. The Company also issued demand letters to the Debtors with respect of the relevant Loans. However, as at the date of this announcement, the Company has not received any reply from any of the Debtors nor any of the Three Directors Concerned, to the written requests from the Company.

In view of the above, the Company will take legal actions against the two corporate Debtors incorporated in Hong Kong and is contemplating engaging lawyers in the People's Republic of China (the "PRC") to commence proceedings against the corporate Debtor incorporated in the PRC, for recovery of the relevant Loans.

In addition, the Company has instructed lawyers to commence proceedings against the Three Directors Concerned for losses suffered by the Group in connection with the unauthourized issuance of the Alleged Bonds and advancement of the Loans.

The Company will keep the market informed of the investigation results of the Independent Committee by way of further announcement(s) as and when appropriate.

Shareholders and potential investors of the Company are advised to exercise caution when dealing in the securities of the Company.

By order of the Board

KNK Holdings Limited

Sin Pui Ying

Director

Hong Kong, 24 January 2020

As at the date of this announcement, the executive Directors are Mr. Poon Kai Kit Joe and Ms. Sin Pui Ying; and the independent non-executive Directors are Mr. Lee Pui Chung, Ms. Lai Pik Chi Peggy and Mr. Chan Chung Yin Victor.

This announcement, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the GEM Listing Rules of the Stock Exchange for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this announcement is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this announcement misleading.

This announcement will remain on the "Latest Company Announcements" page of the GEM website at www.hkgem.com for a minimum period of 7 days from the date of its publication and on the Company's website at www.knk.com.hk.

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Disclaimer

KNK Holdings Ltd. published this content on 24 January 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 January 2020 15:09:06 UTC

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