The Securities and Futures Commission (SFC) has suspended the licence of Mr Dick Ma Tor Fuk for eight months from 5 December 2014 to 4 August 2015 for failures in relation to his role in the initial public offering of Powerlong Real Estate Holdings Limited (Powerlong) in 2009 (Notes 1 & 2).
Ma was formerly a responsible officer of ICBC International Securities Limited (ICBCI Securities) which acted as one of the joint lead managers in the listing of Powerlong.
An SFC investigation found that Ma, at the material time, had failed to:
- ensure that all placees referred by Powerlong for the subscription of its shares allotted through its listing (the Offer Shares) were independent from Powerlong before making a declaration to The Stock Exchange of Hong Kong Limited (SEHK) on behalf of ICBCI Securities to that effect (Note 3);
- conduct customer due diligence on the placees and satisfy himself on reasonable grounds that the subscriptions originated from them; and
- diligently supervise his subordinate in conducting customer due diligence and be satisfied on reasonable grounds that the subscriptions originated from the placees.
The SFC found that the placees were referred by Powerlong to ICBC International Capital Limited (ICBCI Capital), which in turn referred them to its affiliate ICBCI Securities to open accounts for the placees’ subscription of the Offer Shares. Ma accepted the subscriptions without conducting or causing know-your-client due diligence as required under the Code of Conduct, failing to find out their financial situation or confirm their independence from Powerlong (Notes 4, 5 & 6).
Ma also failed to perform ongoing scrutiny to ensure that the subscriptions were consistent with his knowledge of the placees’ financial situation.
In addition, the SFC found that Ma signed a confirmation that the placees were all independent – as required by the SEHK under the Listing Rules – despite knowing that he did not have sufficient evidence to make the confirmation.
Notes:
- Ma was accredited to ICBC International Securities Limited between November 2008 and February 2011 and is licensed under the Securities and Futures Ordinance to carry on Type 1 (dealing in securities) regulated activity. He is currently not accredited to any licensed corporation.
- Powerlong was listed on the Main Board of The Stock Exchange of Hong Kong Limited in 2009.
- "Placees" refers to investors who subscribed for the offer shares via the international tranche.
- ICBCI Capital was one of the joint sponsors and bookrunners in the initial public offering of Powerlong in 2009.
- Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission
- ICBCI Securities and ICBCI Capital were reprimanded and fined in a separate disciplinary action. Please see the SFC’s press release dated 21 May 2014.
A copy of the Statement of Disciplinary Action is available on the SFC website