The Zambian Securities and Exchange Commission (SEC) has sanctioned Standard Chartered Bank for mis-selling bonds issued by a Chinese property developer to one of its wealth management clients.
The SEC found that the bank failed to disclose material information about the risks associated with the bonds, which were issued by Sino-Ocean, a state-backed Chinese developer. These bonds subsequently defaulted, leaving investors with significant losses.
Furthermore, the SEC determined that Standard Chartered had used exclusionary contract clauses that placed the investment risk solely on the client, contrary to Zambian securities regulations.
Standard Chartered is currently seeking to appeal the SEC’s decision and is reviewing the details of the matter.
This incident comes as Standard Chartered is looking to divest its wealth and retail banking businesses in Zambia, Botswana, and Uganda as part of its ongoing strategy to streamline its operations in Africa.
The SEC’s action underscores the importance of regulatory oversight and investor protection in the financial markets.