IPO-vetting executive tied to briberyTop News | Jasmine Poon 10 Jun 2019
A former senior executive of the IPO vetting team at Hong Kong Exchanges and Clearing is suspected of improper approvals involving at least 30 listings, two law firms and three sponsors, local media said.
The executive reportedly joined the exchange in 2013 and managed a team of 70 people.
He is suspected of accepting bribes of about HK$10 million and colluding with lawyers and underwriters to approve IPO applications that do not meet HKEX's requirements.
The HKEX is conducting an investigation into the approvals - made in the last two years in sectors ranging from infrastructure to food and beverage.
Many have been successfully launched and are trading on the market. HKEX has called for an executive meeting and has put down the two involved law firms and the three sponsors on its watchlist.
Two of the three sponsors have backed newly incorporated Hong Kong, mainland and Southeast Asian enterprises, including 30 which have launched onto the Growth Enterprise Market.
The HKEX has yet to release an official statement.
The Standard reached out to HKEX but it declined to comment, citing nondisclosure of employee matters.
Some industry professionals said there are loopholes in IPO vetting as they call for better safeguards in the listing process.
They added that whenever sponsors and lawyers have failed to conduct reasonable due diligence, there is a need for the Securities and Futures Commission to step up regulatory compliance.
Stanley Chik, head of research at Bright Smart securities, said the incident impacts the industry immensely and hopes the HKEX will quickly release a statement to address industry concerns.