SFC steps up action against poor corporate behaviour
Average fine imposed last year rose 20 per cent to HK$4.73 million
The Securities and Futures Commission took more action against problematic listed companies last year and imposed heftier fines, a trend that analysts say shows the regulator is keen on cracking down on poor corporate behaviour in light of some high-profile scandals.
The commission took enforcement action against 33 companies last year, up 57 per cent year on year, according to an annual study by law firm Freshfields Bruckhaus Deringer.
However, the number of enforcement actions against individuals dropped to 55 last year, down 48 per cent from the 107 in 2014. However, the study said the high number in 2014 was an anomaly and last year’s number was in line with previous years.
There is a real emphasis in Hong Kong on reducing abuses of, and unnecessary delays in, market disclosure
Imposing fines has become the SFC’s most-used weapon. It imposed fines in all enforcement actions last year, with the amount collected totalling HK$70.9 million, 13 per cent more than in 2014 and up 75 per cent on 2013.
The average fine last year was HK$4.73 million, 20 per cent more than in 2014 and 75 per cent more than in 2013.
Chamber of Hong Kong Listed Companies chief executive Mike Wong Ming-wai said the SFC had deployed more staff to check on listed companies’ behaviour.
The regulator set up a team in 2014 to check corporate announcements and transactions including financial statements and changes of directors or auditors to identify potential misconduct. Companies with frequent transactions, changes in directors or auditors or unusual share price movements were put on a watch list.