Hong Kong's Securities and Futures Commission is investigating "sub-standard work" by 15 companies that sponsored IPOs as part of the regulator's efforts to stamp out corporate fraud.
The sub-standard work from the 15 unnamed sponsors has resulted in billions of dollars of investment losses, said Thomas Atkinson, an executive director of the regulator's enforcement division. He added that the sponsors failed to verify critical business data such as material customers and revenue information.
Atkinson noted that the IPO sponsorship regime is essential to preventing corporate fraud, adding that the regulator will ensure that the regime serves its gatekeeping functions. He also emphasized that sponsors have a duty to make reasonable inquiries about the disclosures made by listing applicants.
The SFC is currently investigating 136 active corporate fraud and misfeasance cases, of which the regulator is focused on 28 that are particularly serious, Atkinson said.