HONG KONG (Reuters) - Ratings agency Moody’s has failed in its final attempt to overturn action taken against it by Hong Kong’s securities regulator for a 2011 report alleging corporate governance failings at a number of Chinese companies.
On Monday, Hong Kong’s Court of Final Appeal dismissed an appeal by Moody’s Investors Service Hong Kong Limited in relation to the Securities and Futures Commission’s (SFC) disciplinary action concerning a “special comment” report Moody’s published in 2011, the SFC said in a statement.
The case has been watched closely by the financial industry and corporate governance activists as it could redefine the limits on what can be written in reports on public companies and potentially curtail the activities of Hong Kong re
Credit ratings agencies have been directly regulated by the SFC since June 2011.
In July 2011 Moody’s published a report that raised concerns about corporate governance at 49 Chinese companies listed in Hong Kong.
Following an inquiry into the report, the SFC fined and reprimanded Moody’s in November 2014, but Moody’s appealed against the action to the Hong Kong Securities and Futures Appeals Tribunal, which did not uphold all aspects of the SFC’s claims against Moody’s, and slashed the fine.
The SFC’s statement on Monday said that the Court of Final Appeal would issue its reasons later.
“Moody’s is disappointed that the Court of Final Appeal has dismissed its appeal regarding the scope of the SFC’s jurisdiction but we recognize its importance for market clarity,” Moody’s said in a statement.
Reporting by Alun David John; Editing by Muralikumar Anantharaman