CLSA Premium Ltd (HKG:6877), a Hong Kong-headquartered forex broker, announced the suspension of its operations in Australia, citing ongoing losses in the business.
“Given the ongoing losses suffered by the business in Australia and the uncertain future of such business, the board of directors of the Company considers that the resources and effort deployed in Australia could potentially be better utilized in the Company’s development in other areas,” the company stated in its official announcement on Wednesday.
Additionally, the broker advised shareholders and potential investors “to exercise caution when dealing in the shares and/or securities of the Company.”
A Troubled Broker
CLSA, previously known as KVB Kunlun, has been in trouble for years. Last January, it made a similar operation suspension decision for its New Zealand operations.
The company’s New Zealand subsidiary faced a monetary fine of NZ$770,000 slapped by the local financial market regulator for serious anti-money laundering breaches, following several additional licensing conditions. Initially, the Kiwi regulator flagged violations in the practices of CLSA in 2014 and identified further lapses in 2018 even after the broker had made improvements.
Meanwhile, the company has been battling against wind-down requests by one of its shareholders. The broker dodged a wind-down request last March for the third time as the majority of its shareholders voted against the proposal.
All of those wind-down requests were made by KVB Holdings, which believes that the broker has demonstrated an insufficient level of operations and is in a poor financial situation. Indeed, CLSA ended the first six months of 2021 with HK$3.8 million in losses.
