On 22 April 2012, the Securities and Futures Commission ("SFC") announced that it had revoked Mega Capital (Asia) Company Limited's ("Mega Capital") licence to advise on corporate finance, and fined it HK$42 million, for failing to discharge its duties as a sponsor in the listing of Hontex International Holdings Company Limited.
This is the first time the SFC has revoked the licence of an IPO sponsor for due diligence failings: the recovation is not limited to sponsor work, but extends to the provision of any corporate finance advice. The fine is also the highest financial penalty the SFC has imposed on a sponsor to date. The case illustrate the SFC's expectations of sponsors' due diligence work. The SFC is expected to publish a further consultation on sponsors' liability shortly, which may propose making certain sponsor failures a criminal offence. For a more detailed analysis of the case, click here.
Key contacts
Karen Anderson
Consultant, London
Susannah Cogman
Partner, London
Elizabeth Head
Of Counsel, London
Marina Reason
Partner, London
Kelesi Blundell
Partner, London
Hywel Jenkins
Partner, London
Chris Ninan
Partner, London
Jon Ford
Partner, London
Clive Cunningham
Consultant, London
Chee Hian Kwah
Director, Prolegis LLC, Singapore
Valerie Tao
Knowledge Lawyer, Hong Kong
Cat Dankos
Senior Regulatory Consultant, London
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