UBS agreed to settle a case with the financial market regulator involving alleged misconduct in an initial public offering in Hong Kong.
A counsel for the market regulator said at a tribunal hearing that both UBS and Standard Chartered have agreed to settle a case regarding alleged misconduct surrounding an initial public offering (IPO) in Hong Kong back in 2009, «Reuters» reported. The case relates to the listing of a now defunct Chinese forestry company.
Separately, Swiss banking giant UBS was preparing to appeal on Monday against an 18-month ban on leading IPOs in Hong Kong.
Jat Sew-Tong, a lawyer for the SFC, told the three-member Securities and Futures Appeals Tribunal at a hearing on Monday that details of the settlement would be released at a later date.
Unprecedented Punishment
UBS has not identified the IPO in question nor has the SFC publicly confirmed it, but people with knowledge of the matter told «Reuters» that it was the public offering of China Forestry. The timber firm raised $216 million in its IPO, but trading of its shares got suspended after 14 months. Its auditor, KPMG, had discovered irregularities. Subsequently, the company was liquidated.
Last year, SFC proposed a fine of HK$119 million on UBS and suspended its sponsor license for 18 months for its work on an unnamed IPO. The punishment on one of the top banks in the city signals a step-up of scrutiny on IPO practices in a city where such deals are lucrative businesses for banks.
