HKMEx may face searching Legco inquiry

Questions raised over shuttered commodities exchange's relationship with securities watchdog

PUBLISHED : Thursday, 06 June, 2013, 12:00am
UPDATED : Thursday, 06 June, 2013, 3:47am

The failed Hong Kong Mercantile Exchange (HKMEx) could come under further scrutiny after Liberal Party leader James Tien Pei-chun suggested launching an inquiry into the company under the Legislative Council's power and privileges ordinance.

Tien proposed setting up a select committee to look into the exchange founded by Barry Cheung Chun-yuen, a former key adviser to Chief Executive Leung Chun-ying, and whether it received privileged treatment from the securities regulator.

Legco's House Committee will discuss the proposal tomorrow. The pan-democratic camp backs the idea, but some key pro-establishment groups are withholding support.

HKMEx is already under investigation by the Securities and Futures Commission and the police.

It surrendered its trading licence to the SFC last month amid questions over its financial position. Cheung quit his public posts, including his seat on the Executive Council, after being dragged into a police investigation of the company.

In a letter to the House Committee on Tuesday, Tien said the public worried that the controversy might have harmed the city's reputation as an international financial centre.

"The case involves huge public interest and the business sector is talking about it intensely," he said yesterday. "For how long did the SFC know about the financial predicament of HKMEx? Was there any preferential treatment? We are not accusing the SFC, but we should give it an opportunity to explain."

Pan-democrats welcomed the idea, but their support might not be enough to secure the required votes of at least half of the Legco members.

Civic Party lawmaker Ronny Tong Ka-wah, also vice-chairman of the committee, revealed that he had received two calls in two hours - from the SFC and the government, separately - lobbying him not to support Tien's proposal.

"They suggested that an inquiry might hinder the ongoing criminal investigations by the SFC and the police," he said. "I do not see it the same way and I feel we have a responsibility to monitor the government."