Date
16 December 2017
Hong Kong's securities regulator found the two ICBC units negligent in providing due diligence relating to the Powerlong IPO. Photo: HKEJ
Hong Kong's securities regulator found the two ICBC units negligent in providing due diligence relating to the Powerlong IPO. Photo: HKEJ

ICBC units fined HK$25 mln for due diligence failure

Hong Kong’s securities watchdog has fined and reprimanded two units of Industrial and Commercial Bank of China (01389.HK) for negligence in the 2009 initial public offering (IPO) of Powerlong Real Estate Holdings (01238.HK).

The Securities and Futures Commission fined ICBC International Capital (ICBCI Capital) and ICBC International Securities (ICBCI Securities) HK$12.5 million (US$1.61 million) each, Ming Pao Daily reported Thursday.

The two units of the world’s largest bank by market capitalization failed to provide due diligence to ensure certain Powerlong suscribers were independent of the issuer. 

The SFC found that some buyers were offered margin financing in excess of their net worth, purportedly to ensure the success of the IPO, the report said.

Mary MacLeod, deputy chief executive of ICBC International, said the lender accepts the fines and will make efforts to strengthen its regulatory compliance standards.

Shares of Powerlong, a commercial real estate developer based in Fujian province, are down nearly 60 percent since the IPO, according to the report.

ICBCI Capital acted as joint sponsor of the IPO while ICBCI Securities was a joint lead manager.

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