Good to see that Andrew Riddick is back on the front line with CLSA. He spent 22 months, one week and one day in purdah while the Securities and Futures Commission (SFC) investigated an insider dealing case in which he was completely exonerated. As he said in a note to clients when he returned to work on the sales desk at the beginning of this year, "I am a bad car driver but like to drive fast; but generally just below the speed limit since if I exceed the limit and am caught, I get a ticket and bear the consequences. With compliance, there are also very set rules whereby if you cross the line, prosecution will result. There is, however, one major difference between the two, namely the absence of a camera. Instead, there is an investigation."
Riddick warns of the dangers of becoming embroiled in an investigation. "Until there is some sort of time limit on the regulators' ability to investigate (something that would seem very unlikely given popular attitudes to those working in financial markets), my only advice is to keep well, well away from the speed limit when it comes to compliance. The investigation can have as bad or worse consequences than any ticket issuance."
Although he has lost almost two years, he is one of the lucky ones in that he is back at work. We can recall cases where people have had to wait much longer and have had their careers ruined before being exonerated. One of the worst aspects of the process is that there is no pressure on the SFC to expedite the case. It can take as long as it likes. Meanwhile, the person being investigated is left in limbo. For people who don't have the financial resources to sit out the suspension and to get a lawyer, it can be very tough.
To return to Riddick's analogy, people in the industry not only shouldn't break the speed limit, but more importantly they have to be careful that they don't look as if they have got anywhere close to breaking it, as this can be enough to cause potentially disastrous regulatory problems.
Victoria's Secret is known the world over for its tantalising lingerie. Its annual extravaganza featuring its latest designs is watched in 180 countries. As with all things, it was bound to reach mainland China sooner or later. And so it was that last December there was a Victoria's Secret show to celebrate the opening of its flagship store in Shanghai. However, according to Xinhua, people were unimpressed, complaining that it was nothing like the US event. But as the website Week in China reports, there was a good reason for this. The event wasn't staged by Victoria's Secret but by Yimin Group and Uni-Mice Investment, the owners of the Shanghai store.
The two companies announced in February that they had secured sole distribution rights to Victoria's Secret until 2022, which gave Yimin's A shares a nice 7 per cent bounce. However, this did not go down well with L Brands, the owners of Victoria's Secret in the US. It has issued a statement on its website pointing out that it owns no stores on the mainland.
According to Week in China, citing the Securities Times, a subsidiary of Uni-Mice purchased out-of-season lingerie from Victoria's Secret in 2007, and is now using the clothing to set up stores selling the brand on the mainland. It is even planning to sell franchising rights to the brand in five other cities. L Brands has responded by filing a trademark infringement lawsuit against Uni-Mice in Shanghai. China's capacity to amaze shows no sign of dwindling.
TAC to the rescue?
We see that Transport Secretary Anthony Cheung Bing-leung has written to the chairman of the Transport Advisory Committee inviting the TAC to conduct a study of traffic congestion. "The government is determined to tackle the problem," he says.
Well, you could have fooled us. Clearly the increase in the number of vehicles has contributed to this. But in urban areas, it is quite clear that often the number of lanes for moving traffic are halved by illegally parked vehicles.
Let us hope that the TAC's conclusion is not that we need more roads. What we need is an electronic road pricing system so those that bring their vehicles into the urban centres pay. This will have a dramatic effect on congestion. At the same time the MTR needs to be extended. Does this make us a consultant?
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