End of Batch B Posts

Chinese IPO review committee member accused of insider trading – What make us think this won’t happen in Hong Kong?

By Lam Wan Yuet

Background

The anti-corruption campaign brought out by President Xi Jinping has really gone through every blood vessel of mainland China, attempting to eradicate corruption in all areas and levels. Official investigation has been launched against Deng Ruixiang, member of the IPO review committee in China Securities Regulatory Commission (CSRC), concerning his alleged insider trading. Deng has been forced to resigned from his committee member since the investigation was formally announced by Central Commission for Discipline Inspection (CCDI), the “CPC’s version of ICAC”.

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Is it really hard to practice corporate governance?

By Wong Ka Ho Vicko

Nowadays, around the world, companies are not only focus on profits or benefits, but corporate governance is also more and more common to people. While there are a lot of practices under corporate social responsibilities, “disclosure of interest” is one of the major practices and I am going to share some of my thoughts about disclosure of interest in the following.

 

“Failure to disclose” is a legal term used to refer to when a person or company conceals or omits important information. Some companies or people may use it as a tool to make profit, which may affect many parties like their shareholders, competitors, or etc.

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Is the proposed Regulatory Regime for Listed Entity Auditors a curse or blessing?

By Tsoi Ching Ni Stacy

Introduction

The government proposed to improve the independence of the existing regulatory regime for listed entity auditors to ensure the consistency with international standards and the consultation period was ended on 19 September 2014 (Quamnet, 2014).

 

Current Law

The financial reports of listed companies have to be audited by auditors (Cap 622). Auditor certifies the accuracy and integrity of the financial reports of the listed entities to safeguard the interests of investors.

Nowadays, Hong Kong Institute of Certified Public Accountants (HKICPA) is primarily responsible for setting registration criteria for qualified auditors, professional ethical principles and supervising the quality of auditors (Financial Services and the Treasury Bureau, 2014). The council members for overseeing auditors are professionals designated within its membership, so unfairness issues may arise.

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Backdoor-listing of Macau gambling companies – is Hong Kong generating a ground for illegal activities?

By Roh Giyoung

Background

Increasing number of Macau casinos and gambling companies seeking for a relatively inexpensive, stable capital source are listing on Hong Kong stock exchange. Since these companies face obstacles regarding financial, compliance audits and anti-money laundering policies in the listing process, none of them have followed traditional IPO system. Instead, they have found an alternative route to reach their goal, backdoor-listing (O’Keeffe & Lee, 2014).

 

Backdoor-listing, in other words, reverse takeover, is a legal process whereby an unlisted private company acquires a public shell company and becomes listed on stock exchange.

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HKEx’s change of listing rules after the loss of Alibaba

By Chan Victor Yathong

Background

Recently, Alibaba has completed its initial public offering(IPO) in New York Stock Exchange, raising more than 20 billion US dollars, after it was initially rejected by the Hong Kong Exchange in 2013. Alibaba was turned down last year due to its request of keeping the pre-defined partnership committee of 30 individuals, which have the power to nominate the majority of the board, in contrast to the “one stock, one vote” principle.

After Alibaba’s announcement of listing in New York, Hong Kong Exchanges and Clearing Ltd. (HKEx) have published a document in August, outlining a new share structure concept that exhibits several classes of voting rights. It is believed that HKEx’s new idea would better accommodate and allow companies that strictly follow its culture, like Alibaba, to be listed in Hong Kong.

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End of Batch A Posts

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