HONG KONG, June 4 (Reuters) - A former top UBS banker in Hong Kong, Cai Hongping, has had a five-year ban from the financial industry for misconduct on an initial public offering overturned after a review, the city’s Securities and Futures Commission (SFC) said on Friday.
In 2019 the SFC, in the culmination of a crackdown on shoddy listing standards in Hong Kong, banned UBS from leading IPOs in the city for a year, and fined it and three rivals a combined $100 million for due diligence failures on three IPOs.
These included that of the now-defunct scrap merchant China Metal Recycling (CMR).
Later that year, the SFC also banned Cai, formerly chair of UBS’s Asian Investment Banking division, from the industry for five years, saying he was “not a fit and proper person to be licensed” and/or was personally culpable for UBS’ failure to carry out necessary due diligence during CMR’s IPO.
After Cai sought a review of that decision, the chairman of Hong Kong’s Securities and Futures Appeals Tribunal, Michael Hartman, said in a determination dated 2 June that the ban should be set aside.
Hartman said it could not be shown that the balance of probability was that Cai knew he was the appointed leader of the transaction team for the CMR IPO, and therefore he could not be held personally responsible for the team’s failings.
The SFC declined to comment beyond an emailed summary of the tribunal’s decision. UBS declined to comment, while Cai could not be immediately reached for comment via his current employer.
CMR in 2013 became the first firm in Hong Kong to be wound up by the SFC, which pushed ahead with the liquidation before it had finished investigating whether the company had overstated its financial position in its IPO prospectus. (Editing by Jan Harvey)