The Hong Kong Securities Regulatory Commission revokes the license of Chen Zijian, the former head of Ga Teng and prohibits him from re-investing in the industry for 10 years

The Zhitong Finance App learned that on August 24, the Hong Kong Securities Regulatory Commission announced the revocation of the license of Chen Zijian, the former head of Jiateng Securities and Asset Management Co., Ltd. (Gateng), and his approval as a responsible person because he whitewashed Jiateng's financial resources from June 2016 to March 2018. The Hong Kong Securities Regulatory Commission also banned him from returning to the industry for a period of 10 years, from August 24, 2026 to August 23, 2036.

According to the Hong Kong Securities Regulatory Commission, the investigation revealed that during the relevant period, Chen prompted Jia Teng to whitewash its liquid capital and provide false and/or misleading information on the company's month-end liquid capital status in 15 financial statements submitted to the SFC, thus creating the illusion that Gateng complied with the quick-moving capital requirements under the Financial Resources Rules.

In each of the 15 financial returns signed and submitted by Chen Yijiateng as the responsible person, Jia Teng stated that its liquid capital exceeded the specified level. However, the Hong Kong Securities Regulatory Commission found that the quick funds calculation in these financial statements included the amount of 15 cheques issued by Chen or his related companies. Although these cheques were deposited into Gateng's bank account at or before the end of the month, none of them could be cashed a few days later and until the financial statements were submitted to the Securities Regulatory Commission. If the amount represented by such uncashable cheques were removed from the calculation of liquid funds, Gateng would fail to meet the required liquid funds requirements at the end of each relevant reporting month.

Furthermore, although Gateng experienced a liquid capital shortfall of between HK$731,000 and HK$3.473 million during the 20 months of the relevant period, the company did not notify the Hong Kong Securities Regulatory Commission as required by the Securities and Futures Ordinance and the Financial Resources Rules.

The Hong Kong Securities Regulatory Commission believes that Jia Teng's actions occurred with Chen Zijian's consent or connivance, and should be regarded as his misconduct. Chen Zijian's actions also seriously questioned his eligibility as an appropriate person to continue to hold a license.