HONG KONG, March 15 (Reuters) - Hong Kong's securities
regulator has fined and reprimanded a subsidiary of Bank of
Communications (Bocom) for failing to "discharge its
duties" as a sole sponsor of a listing application of a mainland
Chinese company in the city, it said on Wednesday.
Bocom International (Asia) Limited (BIAL), a Hong Kong
investment banking unit of Bocom, was fined HK$15 million
($1.93 million) for due diligence failures related to China
Huinong Capital Group Limited, the Securities and Futures
Commission (SFC) said in an e-mailed statement.
Breaches of Hong Kong's code of conduct included failure to
carry out sufficient checks to verify information provided
before submission of the listing application on China Huinong's
behalf in late 2014. The city's bourse has yet to approve the
The SFC said that BIAL should have done more to provide
detail on lending by China Huinong that had not been secured by
collateral but had been guaranteed by companies or individuals.
The regulator added that BIAL had cooperated with it in
accepting the disciplinary action. "There is no evidence to
suggest a systemic failure in BIAL's policies, procedures and
practices relating to its sponsorship work," the SFC said.
BIAL and Bocom, one of China's largest banks, did not
respond immediately to requests for comment.
Wednesday's action comes against the backdrop of the
regulator's increased efforts to scrutinise the sponsorship of
stock listings in the territory, which has been the world's
biggest IPO market since 2015.
In January the SFC filed a suit against Standard Chartered
, UBS Group AG and four other parties over the
2009 IPO of timber company China Forestry Holdings Co
Standard Chartered and UBS separately disclosed late last
year that the SFC was investigating their role as sponsors of
unnamed IPOs and that the regulator's actions could result in
China Forestry raised $216 million in the 2009 IPO, but its
shares have been suspended since January 2011 and the company is
now in liquidation and in the process of being delisted after
its auditor said it had found possible accounting
($1=7.7683 Hong Kong dollars)
(Reporting by Julie Zhu; Editing by David Goodman)