StanChart faces probe in Hong Kong over IPO

HONG KONG: Standard Chartered (StanChart) could face “financial consequences” after an investigation in Hong Kong over its role in an initial public offering (IPO), the firm said as it reported another round of disappointing earnings results, sending its share price tumbling.

The London-based, Asia-focused lender said authorities were looking into its conduct while co-sponsoring the listing in the city in 2009, dealing another legal blow to the firm, which is already facing a US probe.

“The group has been informed by the Hong Kong Securities and Futures Commission that it intends to take action against Standard Chartered Securities (Hong Kong) ... in relation to its role as a joint sponsor of an initial public offering listed on the Hong Kong Stock Exchange in 2009,” it said in its interim earnings report.

“If it does take action there may be financial consequences” for the bank, it said in the report on Tuesday.

The announcement came as it said pre-tax profit improved in the third quarter to September but was still well short of expectations, while revenue was also below forecast.

Shares in the firm plunged 6.52% by the break in Hong Kong yesterday. Its London-listed shares ended down 5.42%.

Last week Swiss giant UBS said it could faced a fine and suspension from sponsoring IPOs in Hong Kong over a listing in the city.

Neither bank said which IPO the actions referred to, but the Financial Times cited an unnamed source as saying the investigations centred on the listing of China Forestry Holdings. – AFP