Chinese Estates Holdings Limited announced that its wholly-owned subsidiary, Chinese Estates, Limited (CEL), signed a new Contract for Services with Executive Director and Chief Executive Officer Ms. Chan Hoi-wan to continue providing property-related and advisory services after the current arrangement expires on 31 October 2026.
Key terms
• Term and effectiveness: The new contract will run from 1 November 2026 to 31 October 2029, contingent on approval by independent shareholders at an upcoming special general meeting (SGM). Either party may terminate with three months’ written notice.
• Scope: CEL will continue to supply (or procure) leasing, sales, property management, administration, asset maintenance, and general advisory services to Ms. Chan and her designated associates. CEL retains discretion to suspend services it considers unduly burdensome or likely to breach Listing Rule caps.
• Pricing: – For most services, charges equal cost plus a margin of no less than 30%. – For specified property management work, charges include 15% of relevant expenses plus cost-based hourly rates, or hourly rates at cost plus margin, depending on the property type. – Ms. Chan must also reimburse all out-of-pocket expenses incurred by CEL.
Proposed annual caps on service charges
1) Property-related Services • 1 Nov–31 Dec 2026: HK$7.60 million • FY 2027: HK$45.50 million • FY 2028: HK$47.80 million • 1 Jan–31 Oct 2029: HK$41.70 million
2) Advisory & Consultancy Services • 1 Nov–31 Dec 2026: HK$0.20 million • FY 2027: HK$1.20 million • FY 2028: HK$1.20 million • 1 Jan–31 Oct 2029: HK$1.00 million
Historical utilisation
Under the existing contract (effective 1 November 2023–31 October 2026), aggregate billings have remained below approved limits. For example, property-related services totalled HK$34.99 million in 2024 versus a cap of HK$46.90 million, and HK$17.33 million was recorded for the half-year to 30 June 2026 against a ten-month cap of HK$43.00 million. Advisory-service billings were HK$0.04 million in 2024, well below the HK$1.20 million cap.
Regulatory classification
Ms. Chan, through various interests, controls approximately 74.99% of Chinese Estates’ issued share capital, making her a connected person under Hong Kong Listing Rule 14A. The highest applicable percentage ratio for the proposed caps is 5% or more; therefore the transactions are classified as continuing connected transactions requiring announcement, circular, independent shareholders’ approval and annual review.
Governance and safeguards
An Independent Board Committee comprising all independent non-executive directors will advise minority shareholders. Gram Capital Limited has been appointed as the Independent Financial Adviser. Internal controls include monthly monitoring of staff hours, finance-department cap tracking, annual review by independent directors and external auditors, and re-compliance with Listing Rules upon any material contract variation.
Rationale
Management stated that the renewal secures continuity of income from service fees, which include a guaranteed profit margin (except for certain property management services provided on terms comparable to those offered to third parties). The board (excluding independent non-executive directors pending IFA advice) considers the terms fair, reasonable and in the interests of shareholders.
A circular with full details and the SGM notice is expected on or before 31 August 2026. At the SGM, Ms. Chan and her associates will abstain from voting on the proposed resolution.
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