Doubts voiced over likely new bourse chairman
While the government has made no secret of its desire for former MTR Corporation chief executive Chow Chung-kong to become chairman of the Hong Kong Exchanges and Clearing next week, brokers and even some of the bourse's directors have reservations.
They have expressed concern over whether Chow, who has no previous experience in the exchange or brokerage business, can handle the many tough challenges that it faces.
These include growing competition from emerging trading systems known as 'dark pools', a drop in new listings, and a raft of corporate governance concerns sparked by mainland enterprises that have failed to release financial statements on time.
The exchange is also in the process of bidding to buy the London Metal Exchange.
A source familiar with the situation said that brokers had urged directors to consider abstaining or even voting against Chow's proposed chairmanship to show their concern.
But even if all six shareholder-elected directors followed the brokers' advice, the six government-appointed directors and chief executive Charles Li Xiaojia added together would be enough to swing the vote in Chow's favour.
A government source said Chow (pictured) was the front-runner for HKEx job because of his international reputation and experience, and rejected the brokers' concerns.
'Chow has a successful track record and a good international network. He is the most suitable candidate,' the source said.
Chow will replace Ronald Arculli, who will step down next Monday after serving as chairman for six years.
The government last week appointed Chow and former Goldman Sachs (Asia) vice-chairman Timothy Freshwater as HKEx directors on two-year terms and reappointed Arculli as a director for one year to allow him to complete a term as chairman of the World Federation of Exchanges until October.
Under Hong Kong law, the HKEx chairman has to be approved by the city's chief executive, so the government support means it is almost certain Chow will be selected as chairman in a board meeting to be held on April 24.
Chim Pui-chung, the legislator representing brokers, said all past chairmen of the stock exchange had worked in the financial industry or had been on the board of the exchange for some years before becoming chairman.
'Being the chairman of the stock exchange ... is very different from running the railway business,' Chim said.
But Paul Chan Mo-po, the legislator for accountancy and former president of Hong Kong Institute of Public Accountants, said Chow could handle the new job.