SFAT affirms SFC decision and fines Sun Hung Kai International Limited $12 million and suspends its licence for IPO sponsor failures

27 Jan 2014

The Securities and Futures Appeals Tribunal (SFAT) has today affirmed the decision of the Securities and Futures Commission (SFC) to sanction Sun Hung Kai International Limited (Sun Hung Kai International) and has reprimanded Sun Hung Kai International, fined it $12 million, and suspended its licence to provide advisory service on corporate finance for one year after finding serious deficiencies in the sponsor work relating to the listing of Sino-Life Group Limited (Sino-Life) on the Growth Enterprise Market (GEM) of The Stock Exchange of Hong Kong Limited (SEHK) (Notes 1 and 2).

An SFC investigation revealed that Sun Hung Kai International had failed to conduct proper due diligence between October 2007 and September 2009 on Sino-Life’s business in relation to a number of material issues, and had placed undue reliance on the work delegated to external experts.

In summary, the SFC found that Sun Hung Kai International had failed to:

In deciding the penalty, the SFC took into account:

The SFC’s Chief Executive Officer, Mr Ashley Alder, said, “Material failings by sponsors directly damage investors and affect market confidence. This outcome sends a clear message to all sponsors.” (Note 3)



  1. Sun Hung Kai International was 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 at the relevant time. The SFC suspended Sun Hung Kai International’s licence to carry on business in Type 6 regulated activity as part of the disciplinary action.
  2. Please refer to the SFAT’s Reasons for Determination, which is available on its website at www.sfat.gov.hk.
  3. The SFC has from time to time published circulars reiterating the standards required of sponsors. On 29 March 2011, the SFC published the Report on Sponsor Theme Inspection Findings addressing concerns over sponsor work deficiencies. On 12 December 2012, following a two-month consultation, the SFC published its proposals which contain key reforms aimed at raising the standard of due diligence of sponsors, and enabling and incentivising them to take a responsible, proactive and constructive role when leading initial public offerings and maintain investor confidence in Hong Kong’s initial public offering market. The new requirements apply to listing applications submitted on or after 1 October 2013.

Page last updated : 15 Sep 2014