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Hong Kong watchdog says Moody's broke code of conduct with 'red flags' report

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An advertising board (left) showing a Chinese stone lion is pictured near an entrance to the headquarters (right) of China Securities Regulatory Commission (CSRC), in Beijing, China, on Sep 7, 2015.

[HONG KONG] The Hong Kong unit of ratings agency Moody's Corp breached the regulator's code of conduct in the publication of a 2011 report on Chinese companies, a Hong Kong appeals tribunal heard on Thursday.

The allegations were heard during Moody's Investors Services HK Ltd's appeal against a decision by Hong Kong's markets watchdog to fine the company US$3 million for a July 2011 report that raised concerns about corporate governance at 49 Chinese Hong Kong-listed companies.

Moody's said the regulator overstepped its mark in claiming the report was akin to a credit rating, which would fall under the regulator's code of conduct.

REUTERS