S-ENJOY SERVICE has been suspended for over six months, and a 7 billion yuan irregular fund transfer that seemingly "cleverly" flowed between Seazen Holdings Co., Ltd. and the property management platform has actually unveiled a capital market manipulation scheme. This "financial magic trick," executed through offline approvals and deletion of transfer records, has not only exposed wounds in corporate governance but also raised serious doubts about the integrity standards of listed companies.
As the saying goes, "lies written in ink can never hide facts written in blood" - with procedural violations thoroughly confirmed, will regulatory penalties and investor lawsuits follow?
**Systematic Violations Under the Guise of "Compliance"**
According to the investigation announcement released by S-ENJOY SERVICE on September 30, Yang Bo and employees from Seazen Holdings, under the pretext of "addressing Seazen Holdings' short-term funding needs," used customized paper approval forms to bypass SAP system approvals and subsequently instructed the deletion of transfer records.
This operation represents a textbook case of "compliance fraud" - evading related party transaction disclosure obligations while circumventing audits through offline approval processes. The explanation in the financial impact section stating "no outstanding balances of related party fund transactions were recorded" is merely a modern interpretation of ancient power dynamics.
According to Enterprise Accounting Standards and Hong Kong Stock Exchange rules, related party transactions must strictly follow review procedures and disclosure requirements. S-ENJOY SERVICE, through its "offline approval + system deletion" dual scheme, turned 7 billion yuan in fund flows into off-book phantoms.
The company also acknowledged in its announcement that related party fund transactions and subsequent failures to make disclosures and obtain independent shareholder approval constituted violations of Chapters 14, 14A, and 13 of the listing rules.
**What Does S-ENJOY SERVICE Face?**
With independent investigation results released, historical experience indicates that such systematic violations rarely receive lenient treatment. Previous cases like Evergrande Property's 13.4 billion yuan deposit misappropriation and Xinyuan Property Services' 400 million yuan pledge incident all ended with securities regulator investigations and company delistings.
Regarding S-ENJOY SERVICE's operations, regardless of how "legitimate" the motives may have been, the actions of deleting transaction records and using offline approvals to circumvent audits have actually touched the core red lines of Hong Kong Stock Exchange listing rules and may involve violations of Securities Law information disclosure provisions.
Based on relevant regulatory materials:
1. **Evidence Chain Completed**: The independent investigation confirmed 7 billion yuan in irregular fund operations, including deletion of bank transaction records and offline approval forms, forming a complete chain of violation evidence. Such systematic violations have exceeded the scope of "internal control deficiencies" and whether they meet the constitutive elements of "illegal disclosure of material information" under Article 161 of the Securities Law requires further regulatory verification.
2. **Severe Damage Consequences**: For investors, S-ENJOY SERVICE's share price was HK$2.80 when trading was suspended in March 2025, with a market value of HK$2.44 billion. Compared to the 2021 peak price of HK$23.99 and market value of HK$22.151 billion, nearly HK$20 billion in market value has evaporated. As of the announcement date, S-ENJOY SERVICE remains suspended with no confirmed resumption timeline. Referencing Evergrande Property's 18-month suspension and 47% plunge on resumption day, S-ENJOY SERVICE's future prospects remain uncertain.
3. **Market Order Disruption**: The incident is similar to Evergrande Property's 13.4 billion yuan fund misappropriation case, both involving property management companies providing financial support to real estate companies. This could trigger a trust crisis in Hong Kong's property management sector, threatening capital market stability.
Therefore, this may only be the beginning. Even if funds were not damaged, thorough regulatory investigation is likely a high-probability event, and regulatory penalties resulting from procedural violations combined with investor lawsuits may form a double blow.
**Management "Ignorance" Claims**
The most puzzling aspect of this independent investigation report is that the results suggest that aside from Yang Bo, other directors and senior executives were not involved in related party fund transactions.
Could such large fund movements really be handled by just one S-ENJOY SERVICE executive and one Seazen Holdings management personnel? If so, S-ENJOY SERVICE's management appears excessively lax.
The report also reveals investigation limitations, including subjects refusing to open personal computers and mobile devices for evidence collection; SAP deletion logs only recording "deletion actions" without ability to trace operational motives and data tampering; cancelled bank account statements relying only on incomplete records provided unilaterally by S-ENJOY SERVICE; and missing crucial evidence due to departed employees being unreachable and unavailable for interviews for personal reasons.
This inevitably brings to mind literary metaphors about systemic corruption: interest networks often possess greater penetrative power than institutional constraints. The excuse of "ensuring property delivery" appears more like a facade for rent-seeking behavior.
**Regulatory Implications**
When related party transactions become "personal money bags" and audit independence is compromised by interest capture, capital markets will ultimately devolve into speculative gambling halls. Therefore, regulators need to face the issues with S-ENJOY SERVICE and Seazen Holdings with the courage of thorough reform, restoring clarity and justice to capital markets.
The systematic nature of these violations, combined with the scale of funds involved and market impact, suggests that regulatory action is not just possible but likely necessary to maintain market integrity and investor confidence.
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