Deals
Hong Kong Regulators Create Team to Focus on Shell Companies
- Corporate fraud a priority after significant damage to market
- SFC also probing anti-money laundering breaches at brokerages
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Hong Kong’s Securities and Futures Commission has established a team to investigate the creation and use of so-called shell companies, amid a focus on malfeasance and fraud by companies listed in the city.
The team will probe suspected shells on the Growth Enterprise Market, the regulator wrote in a biannual report published Thursday. Firms listed on GEM, Hong Kong’s exchange for smaller companies, sometimes change hands soon after a public offering and are seen as targets for what’s known as backdoor listings, a way for a Chinese enterprise that does not want to go through the initial public offering process to get on the stock market.