Charles Li tempts fate with his 'not-us' comments
You have to wonder if stock exchange chairman Charles Li Xiaojia has not being paying attention recently or has been smoking something exotic, if his comments on the accounting scandals of US-listed Chinese companies are anything to go by. These companies 'would never be allowed to list in Hong Kong', he told reporters from Dow Jones and The Wall Street Journal in an interview. 'You can sell garbage as long as you tell people it's garbage,' he said, remarking on the disclosure-based regimes of many exchanges outside Asia.
But Li is not really speaking from a position of strength. Despite his implication that listing standards are stronger in Hong Kong than the US, smells of varying intensity have lingered over a number of mainland companies listed in Hong Kong.
The list of shame includes: China Forestry, Moulin, Gome, Chaoda Modern Agriculture, China Public Procurement, Citic Pacific, China Zhongwang Holdings and Asia Aluminium, to name a few.
Modestly conceding, 'there are bad apples everywhere', including Hong Kong, Li added, 'I don't think we have had our Enron yet. [We] have not had our WorldCom.' True, the Akai scandal was no Enron, but surely Li is tempting fate.
Slipping Rusal puzzles the market
We see that Russian aluminium company Rusal slipped below its HK$10.80 initial public offering price earlier this week in circumstances that have left the market wondering what is going on. Having reached a peak of HK$14.10 in April, the stock declined to HK$11.70 by the beginning of the month. On Friday it closed at HK$10.70, a fall of 9 per cent. There has been speculation that one of Rusal's anchor investors needed cash in a hurry. These investors all had an opportunity to lower their costs last year when the stock price slipped to about US$7.00.