The practice of junior syndicate banks signing away
power of attorney (POA) privileges on Hong Kong IPOs [initial
public offerings] is causing increased concern among counsel in
The trend, which began in November 2012 on Chinese
state-owned enterprise (SOE) PICC’s IPO, and has
now become the market norm, is unique to Hong Kong. It involves
junior underwriting syndicate members, including joint
bookrunners, executing broad and irreversible POA in favour of
global coordinators in the early stages of IPO planning.
is increasingly taking place immediately upon banks being
invited to join the syndicate, and it prevents the
deals’ junior banks from carrying out basic due
diligence or even determining the principal commercial terms of
Counsel are concerned. "There’s a real sense of
urgency to take action," said Stuart Rubin, partner at Ashurst
in Hong Kong. "The...