UBS, Three Other Banks Fined Millions By SFC

The Securities and Futures Commission has fined four major investment banks a total of more than HK$780 million for flouting listing rules when they helped three companies go public in Hong Kong.

UBS was slapped with the biggest fine over its involvement in the listing applications of two mainland firms and another unidentified company.

The securities regulator reprimanded and fined UBS and its brokerage arm HK$375 million for failing to discharge their obligations as one of the joint sponsors of three listing applications involving: China Forestry which has since been delisted; Tianhe Chemicals, whose shares have been suspended from being traded; and a third unidentified company against which disciplinary proceedings are still ongoing.

On top of the fine, the watchdog also partially suspended UBS Securities Hong Kong’s licence to advise on corporate finance for one year – meaning it will not be able act as a sponsor for any listing application in Hong Kong of any securities.

The SFC has also suspended the licence of an UBS executive Cen Tian for two years for failing to discharge his supervisory duties as a sponsor who was supposed to look after the execution of China Forestry's listing application.

China Forestry was listed in 2008. But trading of the company stocks were suspended in 2011 after financial irregularities were discovered. The company is now in liquidation.

Shares of Tianhe Chemicals have been suspended since 2015.

The SFC has also taken action against other joint sponsors involved in the listing applications of China Forestry and Tianhe. Morgan Stanley Asia has been fined HK$224 million and Merrill Lynch Far East HK$128 million for their involvement in the listing of Tianhe. Standard Chartered Bank has been fined HK$59.7 million over China Forestry's IPO.