CLSA Premium Suspends Operations in Australia

CLSA Premium Ltd (HKG:6877), a foreign exchange broker located in Hong Kong, has suspended its operations in Australia, citing continuous losses in the business.

"Given the ongoing losses suffered by the business in Australia and the uncertain future of such business, the Company's board of directors believes 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 Wednesday announcement.

In addition, the broker warned owners and prospective investors to "take extreme caution when trading Company shares and/or securities."

CLSA, previously known as KVB Kunlun, has been in turmoil for years. In January of last year, it made a similar move to suspend operations in New Zealand.

The local financial market regulator fined the company's New Zealand affiliate NZ$770,000 for major anti-money laundering violations, in addition to imposing various extra licence requirements. Initially, the New Zealand regulator detected irregularities in CLSA's operations in 2014, and again in 2018, despite the broker's changes.

Meanwhile, the corporation has been fighting against a shareholder's proposal to wind down operations. The majority of the broker's shareholders voted against the wind-down motion for the third time in March of last year.

All of these wind-down requests were submitted by KVB Holdings, which feels the broker has exhibited an insufficient level of operations and is in a precarious financial position. In fact, CLSA concluded the first half of 2021 with a loss of HK$3.8 million.