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Hong Kong-listed GF Securities latest broker to be investigated for inadequate due diligence amid roll-out of China’s market-oriented IPO reforms
- Firm failed to exercise due diligence in the non-public issuance of shares by Misho Ecology & Landscape in 2018 and is suspected to be in ‘breach of laws’, it says in filing
- Northeast Securities, Dongxing Securities, Donghai Securities and Citic Securities have all received warnings and fines for inadequate reviews so far this year
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China’s top financial regulator is investigating Hong Kong-listed brokerage GF Securities for the inadequate review of a shares issuance, amid the country’s full embrace of a market-oriented initial public offering (IPO) system.
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The China Securities Regulatory Commission (CSRC) has filed a case against GF Securities for suspected unlawful acts, the mainland Chinese brokerage said in a stock exchange filing on Monday.
It “failed to exercise due diligence in respect of sponsorship of the non-public issuance of shares by Misho Ecology & Landscape Co” in 2018 and is, therefore, suspected to be in “breach of laws”, the brokerage said in a Chinese language statement late on Monday, referring to the case filed by the CSRC.
“[GF Securities] will actively cooperate with the CSRC’s investigation efforts and perform its obligation of information disclosure in strict accordance with regulatory requirements,” the brokerage said, advising investors to invest rationally and pay attention to investment risks. “Currently, the operation of the company is normal.”
The brokerage’s shares dropped 1.82 per cent to HK$11.86 on Tuesday afternoon.
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