SFC publicly criticises Nomura International (Hong Kong) Limited and Lee Yuen Yee, Annisa for breaches of Takeovers Code

5 Mar 2018

The Securities and Futures Commission (SFC) has criticised Nomura International (Hong Kong) Limited (Note 1) and Lee Yuen Yee, Annisa (Note 2) for breaches of the Code on Takeovers and Mergers (Takeovers Code) whilst acting as the financial adviser to West China Cement Limited in relation to a possible mandatory offer for the company’s shares (Note 3).

Nomura Hong Kong failed to comply with restrictions on the issuance and distribution of research reports (Note 4) when it published five credit commentaries and three weekly wraps on West China during the relevant period. These also contained profit forecasts which were not reported as required (Note 5). Lee was responsible for the reports.

In determining an appropriate sanction, the SFC took into account Nomura Hong Kong’s and Lee’s full cooperation, their self-reporting of the breaches (Note 6) and the remedial measures implemented by Nomura Hong Kong to address the deficiencies and strengthen its compliance with the Takeovers Code.

A copy of the Executive Statement is available on the SFC website.



  1. Nomura International (Hong Kong) Limited is an institution licensed to carry out Type 1 (dealing in securities), Type 2 (dealing futures contracts), Type 4 (advising on securities), Type 5 (advising on futures contracts) and Type 6 (advising on corporate finance) regulated activities under the Securities and Futures Ordinance.
  2. Lee is a licensed representative of Nomura Hong Kong for Type 4 (advising on securities) regulated activity.
  3. Nomura Hong Kong fell within the definition of "associate" of the offeree company for the purposes of the Takeovers Code upon its engagement as West China’s financial adviser on 5 November 2015. An offer period commenced on 27 November 2015 when West China and Anhui Conch Cement Company Limited jointly announced a possible mandatory offer by Anhui Conch for West China shares, and ended on 30 June 2016 when both parties announced the lapse of the transaction.
  4. Note 4 to Rule 8.1 of the Takeovers Code provides that a financial adviser to an offeree company should stop issuing research reports on the offeree company except with the Executive’s prior consent.
  5. Under these circumstances, research reports containing profit forecasts and other financial information about companies involved in an offer must fully comply with the reporting requirements under Rule 10 of the Takeovers Code.
  6. Self-reporting of the matter was required under paragraph 12.5 of the Code of Conduct for Persons Licensed by or Registered with the SFC.

Page last updated : 5 Mar 2018