World's IPO capital says investment bankers who lie in documents face up to 2 years in jail
By shu-ching jean chen in Hong Kong
Hong Kong's securities watchdog has revived a proposal to throw investment bankers into jail for making false statements in the document of an IPO they sponsor.
In Hong Kong the new head of Hong Kong's securities watchdog has revived a proposal to throw investment bankers into jail for making false statements in the document of an IPO they sponsor.
At stake is a business that has made Hong Kong the world's largest IPO fund-raising centre for three consecutive years. Its most recent run, in 2011, involved the listing of 88 companies and the raising of a total of HK$271 billion (S$43.7 billion).
But some of these issuances might have come with sloppy due-diligence conducted by sponsors, especially those related to Chinese companies from the mainland - a group responsible for as much as 60 per cent of market capitalisation and 65 per cent of market turnover.
The reform proposal was the first salvo fired by Ashley Alder, a former lawyer who last year took over as chief executive at the Securities and Futures Commission (SFC), to rein in such practices. It threatens to pursue bankers for "untrue statements (including material omissions) in a prospectus" that could result in as long as two years in prison, in addition to a heavy fine.
Above article is from the Business Times (Singapore).
In Malaysia a very large amount of companies disappointed after the IPO. Sometimes these companies could hold out for a few decent quarters, sometimes not even, results immediately dropped from the first quarter onwards after being listed. As a rule of thumb, I therefore only invested in companies that were listed for at least two years, that seemed to be a save buffer.
Yet despite this hardly any director or broker/investment banker ever got punished in Malaysia for providing false statements. Hong Kong is giving the good example, by threatening investment bankers with jail sentences.
At stake is a business that has made Hong Kong the world's largest IPO fund-raising centre for three consecutive years. Its most recent run, in 2011, involved the listing of 88 companies and the raising of a total of HK$271 billion (S$43.7 billion).
But some of these issuances might have come with sloppy due-diligence conducted by sponsors, especially those related to Chinese companies from the mainland - a group responsible for as much as 60 per cent of market capitalisation and 65 per cent of market turnover.
The reform proposal was the first salvo fired by Ashley Alder, a former lawyer who last year took over as chief executive at the Securities and Futures Commission (SFC), to rein in such practices. It threatens to pursue bankers for "untrue statements (including material omissions) in a prospectus" that could result in as long as two years in prison, in addition to a heavy fine.
Above article is from the Business Times (Singapore).
In Malaysia a very large amount of companies disappointed after the IPO. Sometimes these companies could hold out for a few decent quarters, sometimes not even, results immediately dropped from the first quarter onwards after being listed. As a rule of thumb, I therefore only invested in companies that were listed for at least two years, that seemed to be a save buffer.
Yet despite this hardly any director or broker/investment banker ever got punished in Malaysia for providing false statements. Hong Kong is giving the good example, by threatening investment bankers with jail sentences.
true true, a round of applause to the regulators! those investment bankers have the expertise to know if things do not make sense and it should be their responsibility to highlight the matters to those who are affected!
ReplyDeletehowever, implementation may be a problem...what do you think?
anyhow, as investors ourselves, we should be vigilant because it is our hard earned money at stake at the end of the day, dont you think so?
Kudos for HKEX and bad news for those greedy Chinese! When is the turn for Boleh Land to take action on the criminals? Maybe I should just concentrate on some ultra high quality stocks and foreign markets my money.
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