| HONG KONG, July 5
HONG KONG, July 5 Many companies looking to list
in Hong Kong are failing to provide meaningful disclosure, the
city's market regulator said, underscoring the concerns that
have pushed it to call for fines or jail time for bankers found
to have misled investors on IPOs.
In a market that has been the world's biggest for listings
in two of the past three years, only 14 out of 191 IPO
applications in the year through March were deemed sufficiently
satisfactory for the Securities and Futures Commission to accept
Nine were so bad that it deferred comment altogether, it
"Many draft listing documents failed to provide meaningful
disclosures on the applicants' risks, historical financial
performances and future plans for investors to make informed
assessment of the applicants' businesses and prospects," the
regulator said in a statement.
The commission comments on a range of issues related to an
application. These include requests for clarification and not
all are necessarily negative, a spokesman for the regulator
A series of scandals involving mainland Chinese companies
that listed in Hong Kong has prompted the regulator to make
investment bankers more accountable.
In addition to the proposal for fines or jail time, it has
also called for a tougher code of conduct for sponsors, thorough
guidelines on due diligence and a requirement that the first
draft of a listing application be made public.
Hong Kong's lawmakers are also looking at a new bill that
would make auditors criminally liable if they knowingly or
recklessly omit a required statement from an audit report.