HK fines, reprimands ICBC units for role in 2009 IPO

HONG KONG Wed May 21, 2014 5:26am EDT

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HONG KONG May 21 (Reuters) - Hong Kong's securities regulator fined and reprimanded two units of the world's third-largest bank by value, Industrial and Commercial Bank of China (ICBC), for their roles in the 2009 initial public offering of Powerlong Real Estate Holdings Ltd.

The Securities and Futures Commission (SFC) fined ICBC International Capital Ltd and ICBC International Securities Ltd HK$12.5 million ($1.61 million) each, a tiny fine compared to the bank's $201.4 billion market value.

The SFC said the two units of ICBC failed to conduct so-called "know-your-client" due diligence on some buyers of Powerlong shares to make sure they were independent of the issuer.

The regulator also said that some buyers were offered margin financing in excess of the buyers' net worth in a bid to prevent the listing from falling through.

"These failings go to the heart of the sponsor's obligation to help ensure the integrity of the initial public offering market," said Mark Steward, the SFC's head of enforcement said in the statement.

ICBC International, the Hong Kong-based investment based unit of ICBC, was not immediately available for comment on the SFC's fines and reprimands.

($1 = 7.7527 Hong Kong dollars) (Reporting by Elzio Barreto; Editing by Matt Driskill)

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