At long last the Hong Kong Institute of Certified Public Accountants has set a date for a substantive hearing into complaints about the professional conduct of Hospital Authority chairman Anthony Wu Ting-yuk, Ernst & Young, of which Wu was chairman until December 2005, and Catherine Yen Ka-shun, another senior figure at the accounting firm.
The hearing has been set down for five days from May 6 in what is probably the institute's highest-profile case.
In addition to heading the Hospital Authority, Wu is a former chairman of the Bauhinia Foundation Research Centre and the Hong Kong General Chamber of Commerce. He became a member of the CPPCC National Committee last month, and is an independent non-executive director of the Agricultural Bank of China and Guangdong Investments. He has been mentioned as a potential candidate for chief executive of Hong Kong.
This case has been by far the longest running complaint, having been referred to the disciplinary panel in December 2009. Some say there has been an attempt to stretch proceedings out by swamping the panel with an unusually large number of documents. The complaint relates to the collapse of New China Hong Kong Group (NCHK), which was founded in 1993 by a consortium of investors from Hong Kong, the mainland (including the Hong Kong and Macau Affairs Office) and Singapore. The group entered voluntary liquidation in 1999 amid claims of HK$100 million.
One of the central issues is the possible conflict of interest on Wu's part arising out of his role as a member of NCHK's executive committee while his firm was its auditor. Wu became deputy chairman of Ernst & Young in 1998 and chairman in 2000. Various lawsuits followed the company's collapse, one of which was against Ernst & Young and Wu, which was settled out of court. At a preliminary hearing last November, the legal teams for Wu and the other respondents argued that the disciplinary committee did not have jurisdiction to hear the case. Those arguments were unsuccessful.
Sinopec turns the screw
Sinopec Engineering Group is apparently taking advantage of the weak IPO market by turning the screw on the fees it pays to its bankers. Initially, International Financial Planning says, the company had aimed to pay a base underwriting fee of 1.5 per cent to the arrangers of the US$2 billion IPO. However, Sinopec appears to be having second thoughts, and, in view of the strong position that issuers have over advisers in the current weak market, it is considering ratcheting the fees down to 1 per cent, with a 0.5 per cent incentive fee.
This would be the lowest fee in the Hong Kong market for many years. PICC Group, the biggest IPO in Hong Kong last year, paid 2.5 per cent for its US$3.5 billion offer. Assuming the fee was divided equally among the 12 banks on the deal, they would come away with US$1.68 million. The sponsors are Citic Securities, JP Morgan and UBS. Other banks involved in the deal include Bank of America Merrill Lynch, Bocom, CICC, CMBI, Deutsche Bank, Goldman Sachs, Haitong Securities and HSBC.
A reader has recounted to us yet another act of supreme selfishness by some irresponsible tycoon and his driver. Shortly after lunch yesterday, he noticed a BMW 7 series parked on Queen's Road Central opposite the Landmark Mandarin Oriental Hotel with its engine running and causing traffic to back up behind it. After observing this for five minutes, our reader took a picture of the vehicle and pointed out to the driver that given the chaos he was causing he should move on. Naturally he declined.
After a further five minutes, our reader took a picture of the car's tax disc and Jockey Club badge. "To my surprise, the driver actually took his Samsung phone and took my picture." After another five minutes of being stared out, the driver relented and drove off without his passenger. That's after sitting there for about 20 minutes with his engine running and causing a major traffic jam. But not a policeman or a traffic warden was in sight. Given the authorities' reluctance to deal with this problem, our reader suggests that members of the public shame the owners when they board their vehicles.