The Securities and Futures Appeals Tribunal (SFAT) has affirmed the decision of the SFC to ban Mr Lai Voon Wai, a former responsible officer (RO) of CCB International Capital Limited (CCBIC) and BOCOM International (Asia) Limited (BIAL), from re-entering the industry for five years from 29 September 2020 to 28 September 2025 for failing to discharge his supervisory duties as a sponsor principal in charge of supervising the execution of two listing applications (Notes 1 to 3).
The SFC’s decision followed the earlier disciplinary actions against CCBIC and BIAL (Notes 4 & 5).
The SFC found that the failures committed by CCBIC and BIAL, as the sole sponsor in the listing applications of Fujian Dongya Aquatic Products Co., Ltd. (Fujian Dongya) and China Huinong Capital Group Company Limited (China Huinong) respectively, were attributable to the neglect on the part of Lai.
Lai, who was a Managing Director of Corporate Finance and an RO of CCBIC at the material time, failed in his role as the sponsor principal to (i) properly supervise the due diligence process on the third-party payment arrangement between Fujian Dongya, its overseas customers and their third party payers; (ii) apply his mind as to the reasonableness of explanations by Fujian Dongya on third party payments despite various red flags raised in the due diligence process; and (iii) supervise the due diligence interviews with Fujian Dongya’s customers.
In the listing application of China Huinong, Lai, who was then a Managing Director and Head of Investment Banking Division and an RO of BIAL, failed in his role as a sponsor principal to (i) take proper steps to ensure that the due diligence work was compliant with the relevant regulatory requirements before signing and submitting the listing application to the Stock Exchange of Hong Kong (SEHK) (A-1 filing) and (ii) give BIAL’s transaction team adequate instructions and supervision to ensure the information provided to the SEHK and the SFC was properly verified when repeated questions were raised between A-1 filing and SEHK’s return of the listing application.