Hong Kong’s securities regulator has informed Standard Chartered that it intends to take action against a unit of the UK bank in relation to its role as a joint sponsor of an initial public offering in the city in 2009. If the Securities and Futures Commission does take action, there may be “financial consequences” for Standard Chartered Securities (Hong Kong) Ltd, the bank said in a statement yesterday, as it disclosed its third-quarter profit. The filing didn’t name the company that was listed or say if any other banks were involved. “The SFC confirms an investigation is under way,” a spokesman for the regulator said by phone, declining to comment further. Representatives from Standard Chartered weren’t immediately available to comment. Standard Chartered joins UBS Group AG in disclosing potential regulatory action for their work on IPOs in Hong Kong, the world’s second-largest market for new listings this year. The two banks were joint sponsors of China Forestry Holdings Co’s $217mn first-time share sale in November 2009, data compiled by Bloomberg show. Rob Stewart, a spokesman in Hong Kong for UBS, declined to comment. China Forestry has been suspended from trading in Hong Kong since January 2011 and is now in the process of delisting after financial irregularities were discovered. Liquidators were appointed for the logging company in June 2015 by a court in the Cayman Islands, where it is incorporated.
The liquidators in April filed a writ of summons against Standard Chartered, UBS and other advisers on the IPO, alleging offenses including breach of contract and misrepresentation. Cosimo Borrelli, managing director of the liquidators Borrelli Walsh, declined to comment in an e-mail. London-based Standard Chartered, which reported third-quarter profit that fell short of analyst estimates, is still under the scrutiny of an independent monitor as part of a 2012 deferred prosecution agreement, when it was fined $667mn for violating US sanctions by engaging in $250bn in transactions with Iran. It was also faulted by Singapore’s central bank in July for lax anti-money laundering controls related to Malaysian investment fund 1Malaysia Development.
Hong Kong’s securities regulator has informed Standard Chartered that it intends to take action against a unit of the UK bank in relation to its role as a joint sponsor of an initial public offering in the city in 2009.
