HKMEx staff head for exit as takeover hopes fade

PUBLISHED : Saturday, 29 June, 2013, 12:00am
UPDATED : Saturday, 29 June, 2013, 5:20am

Many of the 100 staff at the Hong Kong Mercantile Exchange have started to leave, as hopes for new investors to take over the troubled commodities bourse fade after investigations by the police and the securities watchdog into alleged financial irregularities.

A source familiar with the situation said senior management at HKMEx required all staff to attend its offices at Cyberport every day even after the exchange suspended its trading and handed back its licence to the Securities and Futures Commission last month.

"The senior management of HKMEx told the staff to go to work as usual, as they are trying to find new investors to inject capital and resume trading.

"Alternatively, they want to find some company who wants to take over the whole team," the source said.

"Many staff are still working every day but in fact there is absolutely nothing for them to do except play computer games or write job application letters. Many have started sending out their CVs to headhunters to find jobs, as they feel there is little hope for new investors to take over the bourse."

HKMEx's co-president, William Barkshire, resigned as a director earlier this month but he retains the co-president role, the company said.

Artem Volynets, chief executive of the Russian billionaire Oleg Deripaska's En+ Group, which holds a stake in HKMEx, also resigned as a director, as did Richard Wong, according to Bloomberg.

The HKMEx, which traded gold and silver contracts, was founded and chaired by the former Executive Council member Barry Cheung Chun-yuen. The two-year-old exchange failed to generate sufficient income and handed back its licence to the SFC in May.

A few days later, the SFC alerted the police commercial crime bureau to suspected serious financial irregularities at the HKMEx.

Police subsequently arrested seven people and charged four.

Cheung has resigned from all his public duties.

The turnover on the exchange was so thin that on its last trading day, only 181 contracts were left to be settled.

The exchange has been sued by its landlord, Hong Kong Cyberport Management, for HK$7 million in unpaid rent.