The order was made after the SFC bought proceedings against the company, which has now been rebranded as EY, in 2012, after it failed to provide the documents as part of an investigation into Standard Water’s proposed listing.
At the time, EY said it was not in possession of the papers and that they could not be produced because of restrictions under PRC law. But today the court rejected this and claimed that EY has “deliberately withheld from SFC information in its knowledge”.
Chief executive at the SFC, Ashley Alder, said: “This case is primarily about the obligations of an accounting firm in Hong Kong to comply with requirements under Hong Kong law. The case is not about PRC law.
“Auditors should not withhold information that is in their possession and sought by the SFC in connection with suspended misconduct in Hong Kong’s markets.”
EY will also have to pay the SFC’s costs on an indemnity basis. The case continues.
Last week, the SFC fined Deustche Bank HK$1.6m for regulatory breaches and internal control failings.
An investigation into the bank found that it had failed to implement adequate internal controls to ensure its positions in listed companies were properly monitored and disclosed to the Stock Exchange of Hong Kong.
