Only two KCRC directors get seats on board in merger

PUBLISHED : Thursday, 09 August, 2007, 12:00am
UPDATED : Thursday, 09 August, 2007, 12:00am
 

Only two of the KCRC's five directors will serve on the board of the company to be formed by the merger of its rail operations with those of the MTR Corporation - and in positions lower than they currently hold.


MTR Corp chairman Raymond Chien Kuo-fung and chief executive Chow Chung-kong will occupy the same positions on the new company's board.


Dr Chien and Mr Chow held their hands high together in a victory posture after the names of the directors were announced yesterday.


'We will become one company, one team. All workers of the two railway companies are high-calibre professionals who will co-operate fully with each other,' Dr Chien said.


But the union representing non-frontline Kowloon-Canton Railway Corporation staff was disheartened by the news, fearing the government-owned corporation would lose more senior positions to the partly privatised MTR Corp.


KCRC senior directors Li Yun-tai and Lee Kang-kuen will become deputy directors of the merged operation. Fellow directors Daniel Lam Chun, Lawrence Li and Mimi Cunningham will not serve on the new board, but all seven MTR Corp directors will stay in their seats.


Michael Tien Puk-sun, whose contract as KCRC chairman will end on the day of the merger, said it was only natural that Dr Chien had been chosen, because this would ensure stability at the listed MTR Corp.


Mr Tien said that, although the new titles might not reflect the demoted directors' duties, they would have more responsibilities and face bigger challenges than they did now given that the merged rail operation would be twice the size of the KCRC's.


The company's chief executive, James Blake, denied there was any bitterness at the KCRC about yesterday's announcement, since it had come as no surprise.


But KCRC officers' union chairwoman Rainbow Lau Choy-hung said members were sceptical about how many senior staff would be chosen for jobs with the new company.


'Look at who they choose now, it is so one-sided,' she said.


Dr Chien, who was recently appointed non-executive chairman of Hang Seng Bank, said there would be no conflict of interest between the two roles.


'All directors are required to report their interests, so when conflicts arise they would be addressed in a fair manner,' he said.


Hong Kong listing rules allow individuals to take up chairmanships at more than one firm.


'The major issue for Dr Chien would be whether he has enough time to be non-executive chairman of the two companies,' said Peter Wong Shiu-hoi, chairman of the Hong Kong Institute of Directors.


'Since both jobs are non-executive, Dr Chien should be able to handle both.'


Simon Ho Shun-man, director of Baptist University's Centre of Corporate Governance and Financial Policy, said the situation might be acceptable given that both jobs were non-executive.


Top management on the moveSenior director of tra


nsport Li Yun-tai: becomes deputy operations director


Senior director of capital projects Lee Kang-kuen: becomes deputy project director


Director of property Daniel Lam: planning to pursue other opportunities after completion of his contract


Director of finance Lawrence Li: expressed an interest in taking up other senior positions in the future merged company, subject to the MTR Corporation's decision


Director of human resources Mimi Cunningham: said she would help to ensure a smooth transition of staff rearrangement


Company secretary and general counsel David Fleming: becomes deputy legal director


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