Hong Kong Delistings Outnumber Trading Resumptions for First Time in Three Years

Regulatory tightening in Hong Kong sees delistings outnumber resumptions: report

Delistings surpass resumptions

More companies were delisted than resumed trading on Hong Kong’s stock exchange in the 12 months to August this year, according to a report by accountants Grant Thornton.

Hong Kong saw 35 delistings during that period, compared with only 21 resumptions, the report said.

It was the first time in three years that delistings had outnumbered resumptions, according to the report.

The figures compare companies removed from the stock exchange with those that returned to trading over the same 12-month period.

Greater scrutiny of companies

The development followed the tightening of Hong Kong’s securities regulations in the wake of property developer Evergrande’s liquidation and unrelated initial public offering frauds.

Barry Tong, national leader of forensic investigation services at Grant Thornton China, said, “Regulators have comprehensively tightened resumption requirements.”

Tong pointed to heightened scrutiny over asset overstatement and misappropriation, bank statement forgery, and the illicit outflow of initial public offering proceeds.

The scrutiny has focused on issues involving company assets, financial records and the handling of IPO proceeds, areas highlighted by Grant Thornton in explaining the regulatory environment.

Source: South China Morning Post