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Webb questions motives of legislator with 15 directorships

The controversy over extending the blackout period for directors trading shares has developed into a full-blown row between former Hong Kong Exchanges and Clearing director David Webb and legislator Abraham Shek Lai-him.

In an article on his Webb-site.com yesterday, the shareholder activist questioned if Mr Shek's many directorships and remunerations had anything to do with his high-profile opposition to an HKEx listing rule change extending the blackout period for directors trading their companies' shares before earnings announcements to a maximum of seven months from the current two months.

Mr Webb said Mr Shek, who represents the real estate and construction sector, had 15 non-executive directorships - the second-highest in the city. They included MTR Corp and Country Garden Holdings and two companies managing property investment trusts.

Based on the actual announcements of 12 of those companies and estimates of the other three, Mr Webb said Mr Shek earned HK$5.35 million a year - five times what he earned from his role in the Legislative Council.

'So Mr Shek, before you go questioning the motives of regulators, who are you working for?' Mr Webb wrote.

In response to the article, Mr Shek said he had never hid his directorships and declared all fees when needed.

'This is all public information and I have nothing to hide. I declared my interest as a director in the Legco meeting when I called for delaying the HKEx rule change to extend the blackout period. All was done in a clear and transparent way.

'I do not want to comment on any article. What I can say is, if anyone wants to unveil my remuneration in a bid to scare me to keep quiet, they will be disappointed.

'I will keep on my lobbying work in the following months to urge the exchange to consult again on the extension of the blackout period because I strongly believe this is a bad move for Hong Kong's financial position.'

Mr Shek last Tuesday called for and got enough lawmakers' support to pass a non-binding Legislative Council motion in favour of postponing by six months the extension of the blackout period.

The proposal seeks to ban directors trading shares from the close of books to the actual earnings announcement. That will mean they cannot trade shares for up to seven months a year. Despite the opposition, the HKEx listing committee decided not to withdraw the rule but delayed its implementation to April 1 from January 1.

This is not the first outbreak of hostility between Mr Webb and Mr Shek. In the Legco meeting on December 30, Mr Shek also questioned if HKEx listing head Richard Williams was working for Mr Webb after Mr Williams quoted a survey by Webb-site.com on directors' stock trading.

It found 95 per cent of 443 respondents agreed that directors often benefited by share dealing after the financial period ended but before results were released.

'Well, of course, Mr Williams works for HKEx, not your editor (Mr Webb), but if Mr Shek is going to make allegations like that, then it's only fair to look at whom he works for,' Mr Webb wrote.

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