Chan should stay on at Hang Lung, says expert
Ronnie Chan Chichung should remain chairman of Hang Lung Development for the benefit of minority shareholders despite the collapse of United States energy company Enron, of which he was a non-executive director, according to a corporate governance expert.
Mr Chan is expected to give evidence to the US Congress where various committees are investigating how Enron collapsed late last year.
Fellow Enron non-executive director Lord Wakeham temporarily has stepped down as chairman of the Press Complaints Commission in Britain 'as a matter of honour . . . until the report of the independent investigating committee of Enron is published and evaluated'.
Mr Chan and Lord Wakeham are members of Enron's audit committee, which is coming under heavy scrutiny.
Enron's auditor, Arthur Andersen, has admitted to shredding documents relating to the company.
David Webb, editor of Webb-site.com, which campaigns for better corporate governance, said Mr Chan should not follow Lord Wakeham's example as it would lead to less disclosure for minority investors in Hang Lung Development.
'I don't think he should step down because he controls [Hang Lung],' Mr Webb said.
'There would be no benefit to having him off the board - in fact, quite the opposite.
'If a director who controlled the company steps off its board then they cease to be subject to as much scrutiny under the listing rules and the disclosure rules,' he said.
'Directors' dealings, for example, would become less visible and that is not a good thing.'
Mr Webb said the collapse of Enron showed executives should be more careful about non-executive directorships.
