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UBS, StanChart agree to settle 2009 HK IPO misconduct case: regulator's counsel
[HONG KONG] UBS Group AG and Standard Chartered PLC have agreed to settle a case of alleged misconduct related to a 2009 initial public offering (IPO) in Hong Kong, a counsel for the market regulator said at a tribunal hearing on Monday.
Swiss banking giant UBS was set to appeal on Monday against an unprecedented 18-month ban on leading IPOs in Hong Kong, imposed, sources had said, for its role in the listing of a firm which subsequently collapsed.
StanChart and UBS banker Cen Tian were also scheduled to appeal against disciplinary action taken by the Securities and Futures Commission (SFC) over alleged misconduct during a 2009 IPO that the two banks sponsored, or led.
Details of the settlement, the misconduct or grounds for appeal have not been disclosed.
The case, which relates to the 2009 listing of a now defunct Chinese forestry company, was widely seen as a test of increased scrutiny of IPO practices in a city where helping firms list is particularly big business for banks.
The lawyer for the SFC, Jat Sew-Tong, told the three-member Securities and Futures Appeals Tribunal at a brief hearing on Monday that details of the settlement would be released at a later date.
Spokespeople for UBS and Standard Chartered in Hong Kong declined to comment on the latest development. A SFC spokesman said the regulator had nothing to add.
While UBS has not identified the IPO in question and the SFC has not publicly confirmed it, people with direct knowledge of the matter have said it was that of China Forestry.
StanChart, which closed its equity business in 2015, named the deal as China Forestry in regulatory filings since 2016.
The timber merchant raised US$216 million in its IPO. Just 14 months after listing, trading of its shares was suspended when its auditor, KPMG, discovered irregularities. The company was subsequently liquidated.
UBS disclosed last year that the SFC proposed to fine it HK$119 million (S$20.61 million) and suspend its sponsor licence for 18 months for its work on an unnamed IPO - an unprecedented punishment against a top bank in the city.