Chapter 2

Due Diligence Guidelines –

General Principles

5. Verification

A sponsor should not merely accept statements and representations made and documents produced by a listing applicant or its directors at face value. Depending on the nature, materiality and source of the information and the context in which the information is given, the sponsor should perform verification procedures that are appropriate in the circumstances, such as reviewing source documents, enquiring of knowledgeable persons or obtaining independently sourced information.

Where a sponsor becomes aware of circumstances that may cast doubt on information provided to it or otherwise indicate a potential problem or risk, the sponsor should undertake additional due diligence to ascertain the truth or completeness of the matter and information concerned. Over reliance on management’s representations or confirmations for the purposes of verifying information received from a listing applicant cannot be regarded as reasonable due diligence.6


6. Paragraph 17.6(c) of the Code of Conduct.


HKCFEF Limited and the contributing law firms, accountants and sponsors are not offering these due diligence guidelines as legal, financial or professional advice or services and they should not be relied upon as such. These due diligence guidelines should not be used as a sole basis for any decision, action or inaction and are not meant to serve as a substitute for the advice of qualified professionals. See here for the full terms and conditions.


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