SFC Resolves Compliance Issues with Core Pacific-Yamaichi Capital Limited, Core Pacific-Yamaichi International (H.K.) Limited and Core Pacific-Yamaichi Securities (H.K.) Limited

17 Apr 2008



The SFC has resolved a number of compliance issues with Core Pacific-Yamaichi Capital Limited (CPYC), Core Pacific-Yamaichi International (H.K.) Limited (CPYI) and Core Pacific-Yamaichi Securities (H.K.) Limited (CPYS) (Note 1).

Under the resolution:


Mr Mark Steward, the SFC’s Executive Director of Enforcement, said: “Under this arrangement, material breaches of the same kind will trigger an accelerated enforcement response. By accepting this arrangement, the Core-Pacific Yamaichi Group demonstrates its strong commitment to good compliance practice and the prevention of misconduct. This is a good outcome for the Group, its clients and the investing public.”

The allegations against CPYC and the findings about CPYI and CPYS are summarised below.

CPYC

The SFC’s allegations concern CPYC’s role as sponsor and continuing sponsor of Tungda Innovative Lighting Holdings Limited (Tungda) (Note 2). In particular, the SFC alleged that CPYC failed to:


The amount of the fine represents the fee earned by CPYC in acting as sponsor and continuing sponsor of Tungda.

CPYI

The SFC’s concerns about CPYI’s conduct stemmed from CPYI’s role as lead underwriter in the listing of Shaanxi Northwest New Technology Industry Limited (SNNT) (Note 3).

The SFC found that CPYI caused the level of demand for the new shares to be misrepresented by:


CPYS

The SFC found that CPYS’s internal control deficiencies directly contributed to its failing to:


In reaching the agreement with the Core-Pacific Yamaichi Group, the SFC has taken into account the following factors:


Ends

Notes:

1. CPYC is licensed under the Securities and Futures Ordinance to carry on business in Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities.
CPYI is licensed under the SFO to carry on business in Type 1 (dealing in securities), Type 4 (advising on securities), and Type 6 (advising on corporate finance) regulated activities.
CPYS is licensed under the SFO to carry on business in Type 1 (dealing in securities) regulated activity.

2. Tungda was listed on the Growth Enterprises Market on the Stock Exchange of Hong Kong on 26 July 2002 with CPYC as its sole sponsor. CPYC ceased to act as Tungda’s continuing sponsor on 10 October 2003. Trading of Tungda’s shares was suspended on 29 July 2004 at the request of the company. Trading of Tungda’s shares remains suspended until further notice.

3. SNNT was listed on the Growth Enterprises Market on the Stock Exchange of Hong Kong on 3 July 2003 with CPYI as its lead underwriter.




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