SFC's civil action against Citic is a good first step
The decision by the Securities and Futures Commission to take action against Citic comes as a welcome surprise.
The decision by the Securities and Futures Commission to take action against Citic comes as a welcome surprise. It's welcome because this case has been hanging around for way too long, and it's a surprise as always believed that this case would never see the inside of a courtroom given the political sensitivities involved.
The SFC's case alleges that Citic, or Citic Pacific as it was then called, and five directors including former chairman Larry Yung Chi-kin, engaged in market misconduct involving disclosure of false or misleading information on Citic's financial position following the whopping losses the company incurred in respect of the leveraged foreign exchange contracts it took out in 2008.
The SFC case was completed and sent to the Department of Justice in 2009, where it has sat for the past five years. This is because it has been held up by the slow pace of the criminal investigation which the police have confirmed in the past few days is still going on.
In 2010, Secretary for Financial Services Chan Ka-keung told the Legislative Council that according to the DOJ, "Since the investigation by both the SFC and the police concern the same set of facts, it is appropriate for the DOJ to finalise its advice to the SFC and the police after it has had an opportunity to consider the results of the police investigation."
Hopefully, the pursuit of this case by the SFC will put renewed pressure on the police and the DOJ to pursue the criminal case. Only this will dispel the lingering suspicion that this case is being stalled because it is politically sensitive and involves powerful people.
The first production of the Greek tragedy by Euripides is believed to have occurred in 431BC. One of its central themes is the disadvantage of being a woman and the horrific lengths a woman has to go to achieve parity with men - she ended up killing her children. So yesterday, more than 2,000 years later, the 30% Club, an outreach arm of the Women's Foundation, was still discussing the matter, or at least an aspect of it - the representation of women on the boards of listed companies.
The 30% club yesterday held its second 30% Club Boardroom Lunch, which brought some 90 women aspiring to be directors in face to face contact with some of Hong Kong's leading companies. This is because it is generally recognised most boards in Hong Kong and around the world tend to choose their directors from among their circle of buddies. The 30 per cent club was first set up in Britain and then two years ago in Hong Kong to draw attention to this and to pressure boards into appointing more women.
The initiative has met with limited success, as indicated in a new report released yesterday by Linklaters in collaboration with the 30% Club entitled: This examines the progress made, one year after the Hong Kong Corporate Governance Code was amended requiring companies to comply by explaining their diversity policies or explain why they don't have one. This year 60.9 per cent of companies in Hong Kong have at least one female director, compared with 59.3 per cent two years ago. The share of directors' seats held by women over the same period has risen from 10.67 per cent to 11.14 per cent. As the report concludes, there's been some progress but there's room for a lot more.
