Activists snare exchange board seats

PUBLISHED : Thursday, 27 April, 2006, 12:00am
UPDATED : Thursday, 27 April, 2006, 12:00am

The win by shareholder rights advocates means reform calls likely to continue

Shareholder rights activist David Webb and fellow reformer Christine Loh Kung-wai resoundingly beat a gaming boss and two stockbrokers for seats on the stock exchange board, suggesting pressure on the exchange for reform will continue.

Three government appointees to the board were also confirmed - executive councillors Ronald Arculli and Laura Cha Shih May-lung, and the exchange's listing committee chairman, Moses Cheng Mo-chi. All will serve for two years.

Mr Arculli, the Hong Kong Jockey Club chairman, is likely to replace Charles Lee Yeh-kwong as chairman of Hong Kong Exchanges and Clearing. Mr Lee stepped down yesterday after serving a maximum six-year term.

Mrs Cha and Mr Cheng replace Great Eagle Holdings deputy chairman and managing director Lo Ka-shui and Goldman Sachs (Asia) vice-chairman Tim Freshwater, whose terms have also expired.

The HKEx board has 13 members - chief executive Paul Chow Man-yiu, six government-appointed directors, and six elected by shareholders. The board will elect a chairman today, a choice the government must endorse. A senior government source said it favoured Mr Arculli.

The exchange's annual general meeting yesterday allowed shareholders to vote for or against the five candidates. The two with the most votes after the 'no' votes were deducted were elected.

Mr Webb, who was running for re-election, ended up with 210.13 million votes, while his ally, Ms Loh, a former securities trader, got 84.57 million.

They defeated Lawrence Ho Yau-lung, chairman of the Chamber of Hong Kong Listed Companies and son of casino king Stanley Ho Hung-sun, who had 21 million votes, and brokers Dannis Lee Jor-hung and Gilbert Chu Kwok-tsu, whose 'no' votes exceeded their 'yes' votes.

'The investors have shown very clearly what they want for the exchange. We now have a clear mandate to push ahead the reforms,' Mr Webb said. 'We would like to see a reduction of trading spreads to enhance market efficiency, increased investor representation on the listing committee, and the introduction of quarterly reporting for main-board companies.'

Mr Webb would also like to see the government move more quickly to add statutory backing to the listing rules to stiffen the penalties for breaches. In the long term, he wants the exchange to surrender its frontline regulatory role to the Securities and Futures Commission.

Ms Loh, a former legislative councillor who heads the think-tank Civic Exchange, is better known for her campaign to curb air pollution than for her background in the stock market.

'I believe it would be good for people from different backgrounds to join the exchange board to represent the investors' interests,' she said. 'I would like to see the Hong Kong stock market doing well.