The UBS investment bank told staff that it will work on initial public offerings in Hong Kong as it appeals a potential sanction from the territory's regulator.
The Swiss bank's top investment banker, Andrea Orcel, told staff that UBS is operating in «business as normal» until Hong Kong's regulator decides on the bank's appeal to being shut out of sponsoring initial public offerings in the territory, according to a memorandum seen by finews.asia.
The Zurich-based bank is one of 15 firms being probed in Hong Kong over what the regulator alleges are shoddy practices with IPOs. UBS can continue to underwrite IPOs in Hong Kong with a sponsoring ban, but the guarantor role is generally the gateway to the far more lucrative underwriting or global coordinator mandates.
Damage Control
Orcel and David Chin, who rejoined UBS in August as part of a bigger management shake-up, went into damage control mode.
«In the event that suspension occurs, UBS would continue to be able to underwrite offerings and carry out other ECM activities, but would not be able to act as a sponsor,» Orcel and Chin, head of corporate client solutions in the wider Asia region, wrote to staff. UBS confirmed the contents of the memo.
Hong Kong Allegations
The Hong Kong allegations go back to the 2009 IPO of timber firm China Forestry Holdings. UBS is still being probed over the 2009 IPO of China Metal Recycling as well as that of Tianhe Chemicals Group, a Chinese firm which went public four years ago.
