Articles: Sponsor regulation
SFC bans Ivan Chan Chuk Cheung for 7 years for IPO sponsor failures
| Statement of Disciplinary Action
SFC, 11-Oct-2023
SFC, 11-Oct-2023
SFC fines Changjiang Corporate Finance (HK) Ltd HK$20m, suspends its licence for serious and extensive sponsor failures
| Statement of Disciplinary Action
SFC, 21-Aug-2023
SFC, 21-Aug-2023
SFC bans Tsang Kwong Fai, ex-RO of RaffAello Capital Ltd, for 2 years over IPO sponsor failures
SFC, 11-Jul-2023
We note from the Securities and Futures Appeal Tribunal website that the firm is currently applying for a review of whatever the SFC has decided in the firm's case.
SFC, 11-Jul-2023
We note from the Securities and Futures Appeal Tribunal website that the firm is currently applying for a review of whatever the SFC has decided in the firm's case.
SFAT allows review for Henry Cai Hongping
| SFAT ruling
SFC, 4-Jun-2021
The tribunal concludes that it was "as likely as not" that Mr Cai was appointed as the team Principal for the doomed IPO of China Metal Recycling, and contradictory reports from UBS suggest it could also have been Michael Ngai Ming Tak, who also denied it. The standard of proof, namely the balance of probabilities, was not met.
SFC, 4-Jun-2021
The tribunal concludes that it was "as likely as not" that Mr Cai was appointed as the team Principal for the doomed IPO of China Metal Recycling, and contradictory reports from UBS suggest it could also have been Michael Ngai Ming Tak, who also denied it. The standard of proof, namely the balance of probabilities, was not met.
SFC lifts sponsorship suspension of UBS
SFC, 14-Jan-2020
UBS gets a 2-month reduction in its 1-year suspension for good behaviour. The firm that brought you China Forestry, China Metal Recycling and Tianhe Chemicals (all now delisted) is back in business.
SFC, 14-Jan-2020
UBS gets a 2-month reduction in its 1-year suspension for good behaviour. The firm that brought you China Forestry, China Metal Recycling and Tianhe Chemicals (all now delisted) is back in business.
SFC fines China Merchants Securities HK$27m for sponsor failures
SFC, 27-May-2019
As we predicted in March when UBS was fined but one of its clients was not named, this relates to the IPO of China Metal Recycling, listed in 2009 and ordered in 2015 to be wound up. The IPO was jointly sponsored by UBS and China Merchants Securities.
SFC, 27-May-2019
As we predicted in March when UBS was fined but one of its clients was not named, this relates to the IPO of China Metal Recycling, listed in 2009 and ordered in 2015 to be wound up. The IPO was jointly sponsored by UBS and China Merchants Securities.
Hopewell and the lemon discount
What does the ability to take a company private for 57 cents on the dollar say about the future of HK's public market? Failure to reform HK's laws and regulations to improve the corporate governance framwork will see the market shrink over time as good companies stay away and controllers take existing companies private. (22-Mar-2019)
What does the ability to take a company private for 57 cents on the dollar say about the future of HK's public market? Failure to reform HK's laws and regulations to improve the corporate governance framwork will see the market shrink over time as good companies stay away and controllers take existing companies private. (22-Mar-2019)
SFC fines Merrill Lynch HK$128m for sponsor failures
SFC, 14-Mar-2019
On the Tianhe Chemicals (1619) IPO in 2014. Notably no human at ML is named as responsible for the failings - perhaps that will come later. ML scores a lower fine than fellow sponsor Morgan Stanley at HK$224m for the same deal. UBS scored HK$375m, but that was for a hatrick of listing applications.
SFC, 14-Mar-2019
On the Tianhe Chemicals (1619) IPO in 2014. Notably no human at ML is named as responsible for the failings - perhaps that will come later. ML scores a lower fine than fellow sponsor Morgan Stanley at HK$224m for the same deal. UBS scored HK$375m, but that was for a hatrick of listing applications.
SFC fines Morgan Stanley Asia Ltd HK$224m for sponsor failures
SFC, 14-Mar-2019
The firm jointly sponsored Tianhe Chemicals (1619) in 2014, with UBS and Merrill Lynch. Notably this announcement doesn't mention any human at MS as being responsible - perhaps that will follow later.
SFC, 14-Mar-2019
The firm jointly sponsored Tianhe Chemicals (1619) in 2014, with UBS and Merrill Lynch. Notably this announcement doesn't mention any human at MS as being responsible - perhaps that will follow later.
SFC fines Standard Chartered Secs HK$59.7m for sponsor failures
SFC, 14-Mar-2019
For the 2009 IPO of China Forestry (now delisted), which it jointly sponsored with UBS. Together they win our "can't see the wood OR the trees" award for epic due diligence. Notably no human at SCS is named as responsible.
SFC, 14-Mar-2019
For the 2009 IPO of China Forestry (now delisted), which it jointly sponsored with UBS. Together they win our "can't see the wood OR the trees" award for epic due diligence. Notably no human at SCS is named as responsible.
SFC fines UBS HK$375m and suspends its sponsor licence for 1 year
SFC, 14-Mar-2019
Over the IPOs of China Forestry in 2009 (now delisted), Tianhe Chemicals (1619) in 2014 and a third as-yet unnamed listing application, which is almost certainly China Metal Recycling (Holdings) Ltd, listed in 2009 and ordered in 2015 to be wound up.
SFC, 14-Mar-2019
Over the IPOs of China Forestry in 2009 (now delisted), Tianhe Chemicals (1619) in 2014 and a third as-yet unnamed listing application, which is almost certainly China Metal Recycling (Holdings) Ltd, listed in 2009 and ordered in 2015 to be wound up.
SFAT affirms SFC decision to fine Sun Hung Kai International Ltd HK$12m and suspend licence for IPO sponsor failures
SFC, 27-Jan-2014
In relation to Sino-Life (8296), which should probably be renamed Sino-Death as it is in the funeral business and has cremated shareholders' investments too.
SFC, 27-Jan-2014
In relation to Sino-Life (8296), which should probably be renamed Sino-Death as it is in the funeral business and has cremated shareholders' investments too.
SFC concludes consultation on regulation of IPO sponsors
| Conclusions paper
SFC, 12-Dec-2012
"Legislative amendments will follow a separate timetable" - don't hold your breath.
SFC, 12-Dec-2012
"Legislative amendments will follow a separate timetable" - don't hold your breath.
SFC revokes licence of Mega Capital (Asia) Co Ltd, fines it HK$42m for Hontex mess
SFC, 22-Apr-2012
Mega Capital denies all allegations of wrongdoing. The timing of this announcement, made at 4pm on a Sunday afternoon, may be intended to buttress the case for greater sponsor liability in a consultation paper expected soon. Some of the allegations though, appear to relate to accounting data, the verification of which should have been the purview of reporting accountants KPMG. The SFC does not regulate accountants.
SFC, 22-Apr-2012
Mega Capital denies all allegations of wrongdoing. The timing of this announcement, made at 4pm on a Sunday afternoon, may be intended to buttress the case for greater sponsor liability in a consultation paper expected soon. Some of the allegations though, appear to relate to accounting data, the verification of which should have been the purview of reporting accountants KPMG. The SFC does not regulate accountants.
Mr Zhang Xiao Ming v SFC
SFAT, 18-Feb-2011
If you've ever wondered how some sponsors get to the required number of public shareholders for a listing, this ruling spells it out. 87 retail "clients" at the Wanchai Branch of ICEA Securities subscribed in the placing of Lang Chao (now Inspur, 0596) and then sold 8,712,000 shares for $0.005 more than the IPO price of $0.36 on the first day, to a company owned by the sponsor. The allotment results showed only 116 placees in total.
SFAT, 18-Feb-2011
If you've ever wondered how some sponsors get to the required number of public shareholders for a listing, this ruling spells it out. 87 retail "clients" at the Wanchai Branch of ICEA Securities subscribed in the placing of Lang Chao (now Inspur, 0596) and then sold 8,712,000 shares for $0.005 more than the IPO price of $0.36 on the first day, to a company owned by the sponsor. The allotment results showed only 116 placees in total.
The SFC and prospectus liability
The SFC complained yesterday about deteriorating standards of sponsors' work in listing applications. Some of the blame lies with the SFC for abandoning in 2006 proposals to reform the law on prospectus liability. Until investors can effectively sue for a fraudulent prospectus, creating a stronger deterrent, the situation is unlikely to improve. (27-Jul-2010)
The SFC complained yesterday about deteriorating standards of sponsors' work in listing applications. Some of the blame lies with the SFC for abandoning in 2006 proposals to reform the law on prospectus liability. Until investors can effectively sue for a fraudulent prospectus, creating a stronger deterrent, the situation is unlikely to improve. (27-Jul-2010)
SFC fines two former South China Capital employees in relation to a listing sponsorship
SFC, 3-Dec-2008
SFC, 3-Dec-2008
GEM Listing Committee takes action against Deloitte & Touche Corporate Finance Ltd
SEHK, 27-Jun-2006
SEHK, 27-Jun-2006
SFC takes action against CSC Asia Ltd, Mr Andrew Chiu Chi Kin and Mr Howard Tang Ho Wai
SFC, 7-Mar-2006
SFC, 7-Mar-2006
Suspension of Oriental Patron Asia Ltd and Mr Rabo Leung Chin Sing from sponsor list
SFC & SEHK, 17-Dec-2004
The "Listing Applicant" is capitalised but not defined in this announcement. It was almost certainly UCL Group Ltd, of which the "relevant directors" were directors and which Oriental Patron Asia Ltd sponsored. The Initial Auditors were Ernst & Young, in the prospectus dated 31-Oct-2002. That IPO was aborted "in view of the prevailing market conditions". Apparently UCL then re-applied in Feb-2003 with the New Auditors.
SFC & SEHK, 17-Dec-2004
The "Listing Applicant" is capitalised but not defined in this announcement. It was almost certainly UCL Group Ltd, of which the "relevant directors" were directors and which Oriental Patron Asia Ltd sponsored. The Initial Auditors were Ernst & Young, in the prospectus dated 31-Oct-2002. That IPO was aborted "in view of the prevailing market conditions". Apparently UCL then re-applied in Feb-2003 with the New Auditors.
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