MAS rebukes registered fund manager, executive director for breaching regulations
Bar on fund management activity against China Capital Impetus Asset Management kicked in on Aug 1
THE Monetary Authority of Singapore (MAS) said on Wednesday (Jul 31) that it has reprimanded China Capital Impetus Asset Management (CCIAM), a registered fund management company, for breaches of the Securities and Futures (Licensing and Conduct of Business) Regulations (SFR).
The authority also issued a prohibition order against CCIAM’s executive director and former chief executive Sun Quan, for failing to secure the company’s compliance with the SFR.
MAS has also rejected CCIAM’s application to become a licensed fund management company because of the contraventions by CCIAM and Sun. This means that, from Aug 1, the company can no longer undertake fund management activities in Singapore. The fund it was managing has been placed under liquidation, said MAS.
In response to queries from The Business Times, an MAS spokesperson said CCIAM’s application was the only one declined.
“The vast majority of registered fund management companies – 254 out of 270 – have transitioned to licensed fund management companies; 15 have taken their own decision to cease operations,” said the spokesperson.
This comes a day after MAS said it reprimanded another registered fund manager, RVP One, and its chief executive for breaching the SFR.
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MAS uncovered CCIAM’s breaches while reviewing the company’s February-to-March 2023 operations.
They include its failure to iron out conflicts of interest arising from the management of assets and/or failure to disclose such conflicts to its investors.
It also failed to put in place an appropriate risk management framework to address basic aspects of the business, which include conducting investment due diligence, monitoring investments, handling redemptions and pursuing claims owed to the fund managed by CCIAM.
The company also did not inform MAS of changes to its representatives and relevant professionals, as well as changes in Sun’s external business interests within the required timelines. It also failed to submit its annual declarations and auditors’ reports on time.
MAS said it issued the prohibition order to Sun as he did not take reasonable steps to secure compliance by CCIAM with the SFR. He is now barred from performing any regulated activities, taking a management role, acting as a director, or becoming a substantial shareholder in any capital markets services firm under the Securities and Futures Act.
“As the former CEO and the executive director of CCIAM, Sun was principally responsible for ensuring that CCIAM complied with MAS’ regulatory requirements,” said MAS, noting that he had not done what was required, despite being aware of the breaches.
Following the announcement, listed company Ascent Bridge on Thursday posted a bourse filing on the Singaore Exchange (SGX), noting the prohibition order issued against Sun, its CEO and executive chairman.
The beverage distribution company said, in response to SGX’s queries, that its nominating committee had considered the enforcement action, and held the view that Sun should remain in his roles at Ascent Bridge. However, he would serve as joint CEO and chairman with Qiu Peiyuan, effective Thursday.
Up till Thursday, Qiu was a non-executive and non-independent director. Having both him and Sun as joint CEOs and chairs ensures “a check and balance” within the executive management, said Ascent Bridge. The arrangement is thus a safeguard against the concentration of power and authority in a single individual, the company added.
On Sun remaining in the position, the nominating committee said this was in the interests of the group’s business, as well as its ongoing company rights issue.
MTBL Holdings, a company solely owned by Sun, had provided conditional undertakings to Ascent Bridge to subscribe to its full entitlement of the rights shares and excess rights shares, up to an aggregate value of S$11 million.
Ascent Bridge noted that Sun has “demonstrated his commitment to the sustainability of the company by providing the above undertakings” and directing the management team to prepare for the rights issue, which is subject to shareholder approval in an extraordinary general meeting.
The nominating committee said Sun remains the most suitable person to see the rights issue to its completion.
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