Former CEO of Ping An securities unit gets one-year ban
He Zhihua punished for firm's failure to implement measures on money laundering
PUBLISHED : Monday, 23 February, 2015, 11:40pm
UPDATED : Tuesday, 24 February, 2015, 10:51am
Chim Sau-wai [email protected]
A woman walks past a Ping An Insurance building in Shanghai. The SFC said Ping An failed to have adequate measures in place to prevent money-laundering. Photo: Reuters
The ban was implemented for a year for failing to ensure the company had enough measures against money-laundering in place, the regulator said yesterday.
Before taking the disciplinary action against He Zhihua, who was the chief executive and the most senior person at the securities firm at the time when the internal control problems were found, the regulator had fined Ping An HK$6 million in July last year over the same issues.
"The SFC will hold senior management accountable for internal control deficiencies where it is clear they are involved and responsible," said Mark Steward, the commission's executive director of enforcement.
Ricky Tam Siu-hing, the founder and chairman of the Hong Kong Institute of Investors, said: "In the past, when the SFC took disciplinary action, many of the cases were related to misappropriation of client funds."
Tam added that cases related to anti-money-laundering uncovered in Hong Kong were rare, compared to Europe and the United States.
He Zhihua was banned from being a licensed securities representative, being a responsible officer of a licensed corporation and acting as an executive officer of a registered institution.
The SFC found that between August 2010 and April 2011, He failed to ensure Ping An had sufficient internal control procedures against money-laundering andtraining for its staff. He had also not established proper procedures to protect client assets and have proper communication and enforcement of Ping An's internal policies on employee dealings and account opening procedures, among other problems.
The regulator said He acted as a nominee in a series of suspicious transactions carried out by Ping An during the period.
"Notwithstanding a number of apparent red flags, these suspicious transactions were not identified and followed up," it said, adding that the transactions were not reported to the regulators in a timely manner.
The commission said He tried to evade responsibility and blamed subordinates when the deficiencies were uncovered. Such conflicts with his subordinates made the internal control problems at the company even worse.
Ping An had removed He from his position and appointed a new chief executive.
