China International Capital Corp – often dubbed «China’s Goldman Sachs» – has been publicly criticized by Hong Kong’s regulator for breaching the city’s takeover code.
This public criticism was aimed at undisclosed trading in June 2019 involving the shares of Dalian Port and Maanshan Iron & Steel, according to a statement from the Securities and Futures Commission (SFC). Simultaneously, CICC was acting as a financial advisor for acquirers Broadford Global and Baosteel, respectively.
«The disclosure obligations in the takeovers code are intentionally onerous to reflect the fact that a high degree of transparency is essential to the efficient functioning of the market in the critical period of an offer or possible offer for a company’s shares,» the SFC said.
«Timely and accurate disclosure of information in relation to relevant dealings, including those of advisers, plays a fundamental role in ensuring that takeovers are conducted within an orderly framework and the integrity of the markets is maintained.»
CICC Apologizes
The related CICC units have accepted that they failed to comply with the takeovers code and the consequent disciplinary actions but the regulator «paid considerable regard to the prompt actions taken» alongside the Chinese financial institution’s «full cooperation and a number of measures which it has put in place to ensure future compliance».
CICC Group also apologized for its oversights on disclosure obligations, adding that it took the matter very seriously.
This is the second disciplinary action issued by the SFC to CICC in three years after Hong Kong’s watchdog barred former investment consultant Xu Tao in October 2017 for taking order instructions from clients through his mobile phone and instant messaging apps.
