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Jake Van Der Kamp

The long wait for a railway to the south side of Hong Kong Island will get even longer, with the opening of the South Island Line pushed back a further six months, the MTR Corporation announced yesterday. …Details of the delay … were revealed in a paper to the Legislative Council's subcommittee on railways.
City, November 22
 
Let me tell you about the Securities and Futures (Amendment) Ordinance 2012, which the Securities and Futures Commission pushed into law two years ago.
It says that each and every officer and director of each and every listed corporation is responsible for disclosing each and every item of price-sensitive information about that corporation to the investing public as soon as reasonably practicable.
Those who ignore this law risk an HK$8 million fine, disqualification from being a director and other penalties.
How does one make a disclosure to comply with this law?
Well, says the SFC, there are a number of ways but the certain one is to publish it on the stock exchange's electronic publication system. It is a law that has had company directors quaking in their boots, no doubt about it. For Friday alone, the stock exchange's electronic publication system showed 171 listed company notices totalling 31.75 megabytes of PDF files or about 1,350 pages.
That was only for notices published between 4.16pm and 22.59pm. There were no earlier ones on the list. Assuming they came in at the same rate over the rest of the day, just an ordinary trading day, we would be looking at 440 submissions totalling about 3,500 pages.
That was for listed company matters only. There were separate website pages for derivative warrants and for other securities.
And that was for the main board only. The Growth Enterprise Market has its own electronic publication system.
I don't know about you but I would probably want a whole day to get through a 350-page book, let alone 3,500 pages, and it would have to be a ripsnorter then, not stock exchange drudgery.
But the SFC has finally recognised that it has a difficulty here. It put out a notice some while back pleading with companies to use discretion and publish only real price-sensitive information.
It has done no good. The plea is routinely taken to company lawyers for clarification with the usual return advice - if in any doubt, publish. And so the flood continues. It is getting to the point that the best way to keep a secret is to report it to the stock exchange. There it remains truly hidden. This is becoming supremely ridiculous.
But the point is that it remains the law, that MTR Corp is a listed company, that the announcement of further delays with a HK$2.8 billion increase in costs is clearly price-sensitive information and that the MTR's directors told only one shareholder, the government, through a Legco subcommittee.
The public was ignored. There was no announcement on the stock exchange's electronic publication system. The last announcement it shows from the MTR is dated November 12 and deals with a director's private financial circumstances.
This is a clear breach of the ordinance. The law says nothing about the government having privileged insider rights as a shareholder. The directors' obligation to report price-sensitive information extends to all its shareholders and to the entire market.
What is more, it is the third time this year that the MTR has done this. It earlier told only a Legco committee about a costly delay in the high-speed link to the border and, on another occasion, of a costly delay in the Sha Tin-Central rail link.
So here is a question for you, Mr Ashley Alder, chief executive of the SFC. What are you going to do about it? Are you once again going to connive at a flagrant breach of your new ordinance?
Do you wish to tell the world that there is one law for your political masters, a law they can ignore, and another draconian one with severe penalties for ordinary participants in the market, who have no protectors?
I have accused your SFC before of rank hypocrisy. I do so again.
Prove me wrong. I dare you.
jake.vanderkamp@scmp.com


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MTR's disregard for law shames the SFC

The announcement of further delays with a HK$2.8 billion increase in costs is clearly price-sensitive information and that the MTR's directors told only one shareholder, the government, through a Legco subcommittee.

Business

Companies

Opinion

Failure to disclose delay to South Island Line is flagrant breach of market regulator’s ordinance


Let me tell you about the Securities and Futures (Amendment) Ordinance 2012, which the Securities and Futures Commission pushed into law two years ago.


MTR Corporation

Expresses the views, ideas and conclusions of the author. (Eg. Enough of Crazy Rich Asians, think of crazy poor Hongkongers.)


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Jake's View

.css-1m2rp1p{color:#34b8b5;}Jake's View | MTR's disregard for law shames the SFC

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Failure to disclose delay to South Island Line is flagrant breach of market regulator’s ordinance

Jake's View | MTR's disregard for law shames the SFC

Failure to disclose delay to South Island Line is flagrant breach of market regulator’s ordinance