Release Date: 25th July 2019

To access the original FCA document, click here.

Summary

The Financial Conduct Authority (FCA) has issued final notices against Cathay International Holdings Limited (Cathay), its CEO Jin-Yi Lee, and its Finance Director Eric Siu for breaches of regulatory standards. The firm and the individuals chose not to refer the matter to the Upper Tribunal, thus making the FCA’s decision final.

Cathay International Holdings Limited, along with its senior executives, was found to have committed significant regulatory failings. These included inadequate financial controls and poor corporate governance, which undermined the integrity of the financial market. Specifically, the CEO and Finance Director failed to ensure that the company’s financial information was accurate and that proper reporting procedures were in place.

The FCA’s investigation revealed that Cathay, under the leadership of Mr Lee and Mr Siu, did not maintain appropriate standards of corporate governance, which led to significant risks for investors and the financial market. The firm and its executives did not adequately disclose financial information, thus failing in their duties to act with integrity and transparency.

Mark Steward, FCA Executive Director of Enforcement and Market Oversight, emphasised the importance of accurate financial reporting and corporate governance. He stated that firms and their senior executives have a duty to uphold the highest standards to protect investors and maintain market confidence.

Key Takeaways for Other Firms:

• Maintain Accurate Financial Reporting: Ensure that all financial information disclosed to the market is accurate and complete.
• Strengthen Corporate Governance: Implement robust governance frameworks to oversee all corporate activities effectively.
• Ensure Transparency: Be transparent with investors and regulators about the company’s financial health and operations.
• Uphold Integrity: Senior executives must act with integrity, ensuring that their actions do not compromise the firm’s or market’s integrity.
• Implement Robust Controls: Establish and maintain effective controls to manage and monitor financial reporting and corporate governance processes.

In conclusion, the FCA’s final notices against Cathay International Holdings Limited, its CEO, and its Finance Director serve as a strong reminder of the critical importance of maintaining high standards of financial reporting and corporate governance. Firms and their senior management must prioritise transparency, accuracy, and integrity to protect investors and ensure market confidence.