Former stock exchange council member and sole proprietor of CK Securities, Daniel Lai Kwok-kuen, arrested on Thursday for alleged theft, was released yesterday on $15,000 police bail and a $400,000 surety. As news of his arrest spread, a special hotline set up by the stock exchange to deal with inquiries from clients of the brokerage received 60 calls from investors seeking further information about their funds. Mr Lai, 55, has been ordered to report in person to the police this morning although no formal charges have been made. Paul Phenix, executive director of compliance division at the exchange, said it was too early to say whether a receiver or provisional liquidator was needed to administer the brokerage's assets in order to work out sums to be repaid to clients. He emphasised clients could - as a last resort - turn to the exchange's compensation fund, which would pay up to $8 million to out-of-pocket creditors. As part of its investigation, the exchange has asked CK Securities' auditors to review the brokerage's books to see if there is any discrepancy between the value of stock and cash claimed by the clients compared to the value that appeared in its books. CK Securities had its trading licence and exchange membership suspended this week and the Securities and Futures Commission (SFC) froze the company's assets. The action followed CK's alleged failure to settle transactions made the previous week. Mr Lai is manager of the North Point Primary School, Methodist Wesley College and Methodist Lee Wai Lee College. He is director of the Methodist Ap Lei Chau Centre and a committee member of the YMCA (HK) Management Committee. He is a director of the International Y's Men Club of Kowloon and Australian Sole Representative of Northern Territory of Australia - Hong Kong Office. Mr Phenix said the exchange would continue to operate the hotline for the time being. The hotline number is: 2840-3723.
