A possible review of the 25 per cent minimum public float of listed companies is one recommendation in a report due to be announced next year by the Standing Committee on Company Law Reform. Secretary for Financial Services Rafael Hui Si-yan, giving an early indication of the report, said any proposals it contained were made with a view to increasing investor protection and corporate governance of a listed company. Enhancing corporate governance in the SAR was one of the standing committee's priorities in the next few years, he said. 'The reform of our company law is an important exercise, as it is crucial that our legislation is kept abreast of the times,' Mr Hui said. 'The Government will seriously consider the standing committee's recommendations.' However, Mr Hui said the Government would prefer a conservative rather than revolutionary approach to changes in company law. One proposal would increase directors' responsibilities and duties, in line with international trends, to ensure corporate governance by a listed company, he said. Raising the minimum 25 per cent level of a public float would allow minority shareholders to boost their holdings, according to the report. Mr Hui said any lifting of the limit would also serve to increase protection for minorities who have invested in listed companies controlled by their founders or their families, by allowing them more say in the companies' business. However, he said no suggestion had been made on how much the public float should be changed. Also, Mr Hui said the interests and benefits of majority shareholders needed to be considered. Meanwhile, he said a risk management committee would be established under the forthcoming Hong Kong Exchanges and Clearing, to specifically examine the risk issues in the domestic market. It would also consider setting up a financial infrastructure to link the various financial sectors which include banking, securities, futures, insurance and the Mandatory Provident Fund. LAW
