HSBC, which is selling its entire Ping An stake in a high-profile deal to a Thai firm amid growing doubts in the market and press, finally broke its silence last night at the request of the Hong Kong stock exchange for inquiries.
HSBC insisted in its stock filing that it didn't have any additional information to disclose beyond its original deal announcement in early December. HSBC's statement came at a time when the city's securities regulator is strengthening the rules for listed companies. Slow and incomplete disclosure of price-sensitive information now may lead to serious consequences.
Legal specialists say that if a listed company does not do enough to disclose price-sensitive information, for example by answering media inquiries about market rumours which may prove to be correct, it could face severe financial sanctions under the newly amended Securities and Futures Ordinance, which came into effect on January 1.
HSBC's statement in response to wide media coverage at home and abroad about the Ping An deal came days after many replies of "no comment" to media inquiries about its Ping An stake sale, despite reports China Development Bank has pulled funding for the deal and the mainland regulator is likely to block it. On Thursday evening, HSBC said the bank "is not aware of any information which must be announced to avoid a false market" in its stocks.
Under the city's new and tighter disclosure rules, all listed companies must disclose price-sensitive information and regulators can investigate disclosures and determine if a company has breached the requirement. "If [a company] knows in advance that the deal could fail and does not disclose or postpones disclosing the information, there may be a legal implication as its silence may result in misleading information to the public."
"The legal consequence could be a severe penalty," said Sam Yu, chairman of the regulatory sub-committee of the Hong Kong Investment Funds Association.
Yu noted that although big firms do not have a legal responsibility to comment on all market rumours and news, "the best practice is to clarify the rumour as early as possible". This was true particularly when information had been widely reported.
After HSBC announced the Ping An deal in early December, questions arose over how it was funded and the possibility of a behind-the-scenes buyer.