CLSA Premium voices concerns about conduct of ex-CEO Stefan Liu

Maria Nikolova

An internal investigation has raised concerns about the conduct of Mr Liu, in particular in relation to improper diversion of the Group’s customers.

Hong Kong-focused retail Forex broker CLSA Premium Ltd (HKG:6877), formerly known as KVB Kunlun Financial Group, has earlier today provided an update on its investigation into the conduct of its former Chief Executive Officer Stefan Liu.

Let’s recall that, back in July 2019, the brokerage siad Mr. Liu tendered a notice of resignation. He resigned from (i) his position as an executive director and the chief executive officer of the Company; and (ii) all of his other positions within the Group with immediate effect.

Mr. Liu stated that his resignation was due to his disagreement with other members of the Board in relation to certain disclosure matters relating to the regulatory impact to the company of the circular issued by the regulator in Hong Kong around June 17, 2019 and the letter dated 5 July 2019 issued by the regulator in New Zealand. In particular, the circular from the Securities and Futures Commission (SFC) states that corporations licensed with the Securities and Futures Commission in Hong Kong, and the communication from the Financial Markets Authority of New Zealand provides that financial services providers, offering leveraged foreign exchange trading or similar services to Mainland investors were requested to immediately review the legality of relevant activities in the People’s Republic of China (“PRC”), and to immediately discontinue any such activities with Mainland investors which have not been approved by the State Administration of Foreign Exchange of the PRC.

According to the email from Mr. Liu, the disagreement concerns the proposed publication of an announcement relating to these update on identification and disengagement of PRC domestic clients.

As the result of Mr Liu’s departure, KVB established a sub-committee of the Board to review his performance during his time as chief executive officer and executive director of the company.

Today, CLSA explained that the investigation is still ongoing. Based on the findings so far, the company claims to have identified material that raises concerns about the conduct of Mr Liu, in particular in relation to improper diversion of the Group’s customers and commercial opportunities.

The Board says it will make further announcements in relation to this matter as and when appropriate.

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