According to data released by the Hong Kong Stock Exchange, the total IPO financing of the Hong Kong stock market reached a record HK$286.5 billion in 2018, and the global “IPO crown” was won for the sixth time in a decade.
For domestic and foreign companies, the listing of shares in Hong Kong is particularly attractive. However, while the Hong Kong stock market is full of vigor, some companies that are "fishing in the eyes" have also taken the opportunity to "cut the leek."
In response to the failure of the IPO sponsors, the Hong Kong Securities Regulatory Commission raised a heavy punch on March 14 and issued a total of nearly 8 to the world's four major investment banks (UBS, Morgan Stanley, Bank of America Merrill Lynch, Standard Chartered Securities). A high ticket of HK$100 million.
In addition to high-volume tickets, the Hong Kong Securities and Futures Commission also revoked UBS's license to provide advice on institutional financing, while also revoking UBS's staff license for two years.
Shocking Hong Kong's financial industry
On March 14, the Hong Kong Securities and Futures Commission issued four investment banks that were punished at the same time.announcement.
Among them, UBS was the most heavily punished. In addition to being fined 375 million Hong Kong dollars, the license was revoked for one year. At the same time, the license of UBS sponsor's supervisor, Hao Tian (male), was revoked for two years because he was responsible. When supervising the implementation of the listing application for China Forest, he did not perform his supervisory duties as the main person of the sponsor.
Morgan StanleyAsia, Bank of America Merrill Lynch Far East Limited and Standard Chartered Securities were punished by the Hong Kong Securities and Futures Commission for 224 million, 128 million and 59.7 million Hong Kong dollars due to due diligence in IPO due diligence.
When the Hong Kong Securities and Futures Commission made the above decision, they pointed out that they considered the following:
UBS GroupSignificant review and verification of major aspects of China's forestry business, namely its forestry assets, logging activities, coverage and customers; UBS Group allowsTianhe ChemicalControl the due diligence process and take no appropriate steps to address early warning signs in customer interviews. In addition, the above-mentioned violations and deficiencies are related to the due diligence of Tianhe Chemical's major customers (including its largest customers) during the previous reporting period. The Hong Kong Securities and Futures Commission has also made similar accusations against the other three investment banks.
The Hong Kong Securities Regulatory Commission pointed out that sponsors have a considerable degree of control over the listing process. If the sponsor's due diligence work fails to meet the standards and the companies that are not suitable for listing still obtain listing status and eventually close down, they may cause huge losses to public investors and their confidence in Hong Kong's financial market. Therefore, there must be a deterrent penalty for the lack of sponsors.
According to Ashley Alder, Chief Executive Officer of the Hong Kong Securities Regulatory Commission, "The results of the enforcement actions show that the SFC attaches great importance to the sponsor's high standards of conduct, as this will protect the investors and maintain the integrity and reputation of the Hong Kong financial market. A strong and clear message is that we will not hesitate to hold them accountable for misconduct by the sponsors."
The punishment of the Hong Kong Securities Regulatory Commission on March 14 has also had a certain impact on the Hong Kong stock market and the investment banking industry.
A senior investment banker in Hong Kong said: "The punishment on the 14th has reached a new high, and the impact of the punishment should put pressure on the sponsor. When fighting for business, we must also pay attention to the quality of the project.SuspensionThe severity is heavier because you can't do business. ”
Hong KongFirst ShanghaiChief strategyAnalystYe Shangzhi also said: "The high amount of fines this time is rare in Hong Kong. It may also indicate that the Hong Kong Securities and Futures Commission has a tendency to increase supervision. The deterrent effect of this fine is indeed very large. For Hong KongNew sharesThe market should be a good thing, and the investment bank will be more rigorous in preparing for the due diligence of listed companies. ”
Related listed companies are in a difficult situation
In the absence of the four investment bank sponsors disclosed by the Hong Kong Securities Regulatory Commission, three companies were mentioned, but only two were named. One is Tianhe Chemical and the other is China Forest. The other one was not disclosed because the disciplinary procedures of the relevant departments were still in progress.
However, from the current situation, China Forest and Tianhe Chemical are in a difficult position: China's forests have been delisted from the Hong Kong Stock Exchange in February 2017, while Tianhe Chemical has been short-selled by short-selling institutions. Then the stock was suspended for a long time, so far noResumption of trading.
Looking back at the financial and asset issues of China's forests from now on, if the sponsors perform their duties strictly at the beginning of their listing, many problems may be exposed.
China Forest previously claimed to be one of China's three private private reforestation and artificial forest operators, with a focus on forestry-related businesses. However, the shares of China Forest have been suspended since January 26, 2011, as the company’s accountants reviewed their financial year ended December 31, 2010.PerformanceA potential non-compliance was discovered. The HKEx then delisted the procedures in accordance with the relevant provisions of the Listing Rules until the Chinese forest was delisted.
Tianhe Chemical has issued a short report by the hollowing out agency. In 2014, Tianhe Chemical was accused of “anonymous analysis” by short-selling institutions: exaggerating profitability, doubtful tax data, two sets of books, and doubts about sales, and then the stock price fell by nearly 40% in one day and was suspended from 2015. to date.
Judging from the punishment of the major investment banks of the Hong Kong Securities Regulatory Commission, it is precisely because they did not deal with the early warning signs appearing in the interviews, and the ambiguity of the interview questions laid the groundwork for the attack of the short-selling institutions.
Tianhe Chemical was listed in June 2014, but it was only targeted by the hollowing out organization for more than three months. The company mainly deals in lubricant additives. Tianhe Chemical, which has suspended trading for nearly 4 years, recently stated that the company's business activities are still in normal operation and the company's stock will continue to be suspended.
(Article source: Daily Economic News)