Hong Kong - HK$15m fine handed out for sponsor failures
The Securities and Futures Commission (“SFC”) reprimanded and fined BOCOM International (Asia) Limited (“BOCOM”) $15m for failures to discharge its duties as the sponsor of China Huinong Capital Group Limited (the “Company”) in breach of paragraph 17 of the Code of Conduct for Persons Licensed by or Registered with the SFC (“Code of Conduct”). SFC’s news alert is available here.
The Company was a provider of short-term loans to small and medium sized enterprises and individuals. The SFC found that BOCOM has failed to perform due diligence in relation to some of these loans which were guaranteed by the Company’s connected person. The information was not included in the draft prospectus submitted by BOCOM. As a result, the Stock Exchange of Hong Kong returned the Company’s listing application on the ground that the disclosure of information was not complete in all material respects to enable a reasonable investor to make a fully-informed investment decision in breach of rule 9.03(3) of the Listing Rules.
- SFC found that BOCOM has breached paragraph 17 of the Code of Conduct in a number of aspects in that it failed to:
- perform all reasonable due diligence before submitting a listing application;
- ensure that all material information of the Company has been included in the draft prospectus and the application documents; and
- ensure that all information provided to the regulators is accurate and not misleading.