Wednesday 22nd October 2014
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KVB Kunlun New Zealand and its manager Chee Joo (Jimmy) Koh have been fined a combined $65,000 and publicly censured for breaches of NZX participant rules after associates of the firm traded shares of Z Energy and other companies during the holding period following initial public offerings.
The company is the local unit of Hong Kong-based financial services group KVB Kunlun and its immediate owner is based in the British Virgin Islands.
NZX Regulation had performed a capital and prudential inspection of KVB NZ last December and found that the firm's employees and associates had participated in the Z Energy IPO last year but failed to provide the required certification. The inspection found 29 instances where holding period rules were breached between May 10 and Nov. 20 last year.
Koh had allowed the trading and a further instance occurred just two days after NZX Regulation had spoken to him on Dec. 17, it said.
"On the basis of the material and information available to the tribunal, it appears that a similar pattern was adopted in relation to a number of other IPOs that were the subject of the holding period breaches," the NZ Markets Disciplinary Tribunal said in announcing the settlement.
Koh's conduct "led to repeated breaches of the rules" involving "a significant number of the staff of what was a relatively small office, seemingly carried out for staff to make a quick profit against a backdrop of what appeared to be a culture of non-compliance," it said.
The tribunal said that had the people involved adhered to the holding period rules, their profit would have been about $17,942 less than they got from trading the shares.
Koh, who admitted the breaches, was fined $25,000 and the firm was fined $40,000.
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