IPO vetting executive accused of crooked spin

Business | Avery Chen and Agencies 26 Mar 2020

The Independent Commission Against Corruption has charged Eugene Yeoh Kim-loong, a former joint head of the initial public offering vetting team at Hong Kong Exchanges and Clearing (0388), and an IPO consultant with bribery and misconduct centered on an application by textiles firm Shen You (8377).

The agency alleged yesterday that Yeoh collected HK$9.15 million through his wife from consultant Richard Lum Chor-wah as an inducement to review applications favorably, and two payments of HK$2 million were related to a Shen You IPO.

Yeoh was responsible for vetting IPO applications for compliance with listing rules and endorsing recommendations before they went to the listing committees. He left the post last May citing "family reasons."

An HKEX spokesman said it has cooperated with the ICAC in its investigation of a former employee and would continue to do so.

A government spokesman noted that the integrity and credibility of the HKEX's vetting process is of utmost importance to the reputation of Hong Kong as a leading international financial center and it was very concerned about the case.

Shares of Shen You have fallen 87 percent to HK$0.05 since its listing in the growth enterprise market in December 2017 with a market capitalization of only HK$40 million.

Elsewhere, Redsun Services, the property management arm of Redsun Properties (1996), has filed an IPO application to the Hong Kong Stock Exchange to raise up to US$100 million (HK$780 million).

Mainland biotech firm Akeso is also planning to launch an IPO as early as next month to raise from US$100 million to US$200 million.

And Microport Scientific (0853) is weighing whether to spin off MicroPort CardioFlow Medtech, which develops devices treating heart diseases to raise up to US$300 million.

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