Controversy over who should regulate red-chip companies deepened yesterday as another leading mainland businessman joined the debate, arguing they should be subject to regulation by mainland securities watchdogs. Zhu Xiaohua, chairman of the China Everbright Group, said in a speech in Hong Kong that mainland authorities should draw up policies to support and regulate red chips - mainland-backed companies which are listed in Hong Kong and registered here or overseas. 'Regulation of red-chip listings should be strengthened because most of those companies floated in Hong Kong are stuffed with quality mainland assets, and their main operations are also on the mainland,' Mr Zhu said. Analysts said his remarks might reflect the view of the central government in Beijing, given his close connections to the leadership. Mr Zhu is a former vice-governor of the central People's Bank of China and a protege of Vice-Premier Zhu Rongji, who is in charge of economy and finance. Nie Qingping, a senior Everbright official who read the speech on Mr Zhu's behalf, said the central government was likely to draw up guidelines to enable mainland and Hong Kong regulators to monitor red chips. Mr Nie is a former deputy director of the international department at the China Securities Regulatory Commission (CSRC). Their remarks are in sharp contrast to those made last week by Gu Yongjiang, chairman of China Resources (Holdings) Co and chairman of the Hong Kong Chinese Enterprises Association. Mr Gu, defending the autonomy of mainland firms in Hong Kong, explicitly said red chips, as opposed to H shares - companies selected by Beijing to list overseas - should be left alone and free of interference from mainland securities regulators. He said that unlike state-run companies which had to seek permission before listing overseas, red chips were regarded as Hong Kong companies and their business activities, including listing or injection of assets, should be regulated by local laws. The controversy surrounding red chips follows the recent initial public offering of mainland-backed Gitic Enterprises, which the CSRC reportedly tried to block at the last minute, saying the listing had not received its approval. The listing went ahead, but confusion remains as to whether red-chip listings, or injection of mainland assets into them by their parents, should be subject to approval by mainland authorities.