The party involved Cardinalasia Consulting Limited (CCL) and its Responsible Officer Mr Edward Lee Shiu Lun.
During the day, Mr Lee provided investment management and advisory services to the five CCL-advised private funds during the material time. It found that seven loan agreements totalling $203.9 million were entered into amongst the five CCL-advised private funds.
However, it was found that the loans were not backed by any collateral or guarantee, and offered limited protection to the lending funds; one of the loans was granted free of interest, and the interest rates for the other loans were far below the rates offered by other execution brokers for margin loans; and one of the lending funds did not have sufficient liquidity when granting the loans.
Therefore, after investigating by SFC, the company was fine HKD 1.5 Million and the Responsible Officer has been suspended for nine months from 27 January 2023 to 26 October 2023