Standard Chartered PLC could face “financial consequences” after an investigation in Hong Kong over its role in an initial public offering (IPO), the firm said as it reported another round of disappointing earnings results, sending its shares tumbling.
The lender said authorities were looking into its conduct while cosponsoring the listing in the territory in 2009, dealing another legal blow to the firm, which is already facing a US probe.
“The group has been informed by the Hong Kong Securities and Futures Commission that it intends to take action against Standard Chartered Securities (Hong Kong) ... in relation to its role as a joint sponsor of an initial public offering listed on the Hong Kong Stock Exchange in 2009,” it said in its interim earnings report.
“If it does take action, there may be financial consequences” for the bank, it said in the report on Tuesday.
The announcement came as it said pre-tax profit improved in the third quarter to September, but was still well short of expectations. Revenue was also below forecast.
Standard Chartered shares yesterday plunged 7.12 percent in Hong Kong. Its London-listed shares ended down 5.42 percent on Tuesday.
Last week, Swiss giant UBS AG said it could faced a fine and suspension from sponsoring IPOs in Hong Kong over a listing in the territory.
Neither bank said which IPO the actions referred to, but the Financial Times cited an unnamed source as saying the investigations centered on the listing of China Forestry Holdings Co Ltd (中國森林控股).
Standard Chartered is still being probed by US authorities over claims of bribery by Indonesian power firm MAXpower Group, which is controlled by the bank.
The probe is the latest in a string of legal problems for the bank, which paid US$667 million in 2012 to settle charges it violated US sanctions by handling thousands of money transactions involving Iran, Myanmar, Libya and Sudan.
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