SFC imposes $20M fine on Changjiang Corporate Finance, suspends its licence
Hong Kong’s Securities and Futures Commission (SFC) has reprimanded and fined Changjiang Corporate Finance (HK) Limited (CJCF) $20 million for serious and extensive failures in discharging its duties as the sponsor in six listing applications.
The six listing applications, submitted by CJCF between September 2015 and December 2017, are: Pacific Infinity Resources Holdings Limited; AsiaPac Net Media Holdings Limited; Perpetual Power Holdings Limited; Van Chuam International (Cayman) Limited; Rising Sun Construction Holdings Limited; and Byleasing Holdings Limited.
The SFC has also partially suspended CJCF’s licence to the extent that the firm shall not act as a sponsor for listing applications on the SEHK of any securities, for one year from 18 August 2023 or until the SFC is satisfied that the controls and procedures of CJCF’s sponsor-related business are adequate for ensuring compliance with the relevant legal and regulatory requirements, whichever is later.
The disciplinary action followed the SFC’s investigation, which found that CJCF had failed to:
- perform all reasonable due diligence in the listing applications of Pacific Infinity, Van Chuam and Rising Sun;
- properly advise and guide Pacific Infinity, Perpetual Power and Byleasing in complying with all relevant listing qualifications;
- ensure disclosure of all material information in the Application Proof prospectuses of Pacific Infinity, AsiaPac and Van Chuam; and
- maintain proper records of the due diligence work it claimed to have done in relation to all six listing applications.
In deciding the sanctions, the SFC has taken into account a variety of factors, including that CJCF’s deficiencies as a sponsor were extensive and serious and the need to send a strong deterrent message to the industry and market that the SFC does not tolerate sponsor failures.
CJCF’s cooperated in resolving the SFC’s concerns, including its agreement to engage an independent reviewer to review its policies, procedures and practices in relation to the conduct of its sponsor business.