Zambia’s Securities and Exchange Commission (SEC) has sanctioned Standard Chartered Bank for mis-selling bonds issued by Chinese developer Sino-Ocean, a source revealed.
The UK-headquartered bank faces enforcement action following a months-long investigation into breaches of Zambia’s securities regulations. The SEC determined Standard Chartered failed to disclose critical information about the bonds sold in March 2022, which later defaulted.
These bonds, issued during China’s real estate crisis, lost most of their value within a year, leaving investors exposed to significant losses. The SEC also found the bank used clauses in contracts that unfairly placed all risks on clients, violating local regulations.
A spokesperson for Standard Chartered confirmed the bank will appeal the SEC’s decision. “We respect the regulator’s findings but will exercise our right to appeal under local procedures,” the bank stated.
The SEC, which launched its investigation in April 2023, declined to comment on potential penalties. Under Zambian law, the regulator can fine or reprimand offenders but cannot compel compensation for affected clients.
Standard Chartered, Zambia’s oldest bank with nearly 120 years of history in the country, recently announced plans to sell its Zambian wealth and retail businesses. The move aligns with the bank’s strategy to scale back operations in Africa, following similar sales in Tanzania, Angola, and other countries.
While the bank’s long-standing presence in Zambia underscores its deep roots, this controversy marks a challenging chapter in its legacy. The outcome of the appeal could set a precedent for future regulatory enforcement in the region.
