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Enoch Yiu

Laura Cha Shih May-lung will become the first overseas professional to join the mainland's bureaucracy as vice-chairman of its securities watchdog.

In the middle of next month, she begins working with the China Securities Regulatory Commission (CSRC) in Beijing after she resigns on February 28 from her post as deputy chairman and executive director of Hong Kong's Securities and Futures Commission.

Mrs Cha, born in Shanghai, moved to Hong Kong at the age of two and became a Hong Kong citizen.

She later migrated to the United States but gave up her US passport late last year when she decided to take the job with the CSRC.

'I am an SAR passport holder,' she said.

Mrs Cha had to renounce her US citizenship because a senior mainland civil servant, with the rank of a vice-minister, cannot be an overseas passport holder.

She believes her appointment will be followed by other outside people being brought into the ranks of the Chinese Government as Beijing prepares to take its place in the World Trade Organisation.

'It is an honour to become the first overseas professional to be appointed to join the Chinese Government,' she said.

'I think this is just the beginning of China recruiting international expertise.'

Premier Zhu Rongji had said Beijing would like to invite more overseas professionals to work in China and indicated the government would pay what they would earn in overseas markets.

The speculation is that Mrs Cha will earn an annual salary of about HK$6 million in her CSRC post - a figure similar to her present pay.

This is much higher than those of other mainland civil servants who earn HK$30,000 to HK$40,000 a year.

Mrs Cha would not comment on her salary but said she would get a 'reasonable payment' from the CSRC.

The CSRC is in charge of drafting all securities laws and tackling any market malpractices.

Mrs Cha will work full-time in Beijing, but she has yet to know what role she would play in the CSRC, where she will be one of three vice-chairmen.

However, with her background as a lawyer as well as being the SFC's corporate finance division head during the past 10 years, the market believes she will help the CSRC build a regulatory framework for corporate finance issues such as takeovers, mergers and listings.

Mrs Cha said she would also want to help the CSRC lay out a framework to improve corporate governance in the mainland as this was important in any market's development.

Beijing is encouraging mainland companies to go public to strengthen their capital base as part of its reform in preparation for thousands of state-owned enterprises competing when China joins the World Trade Organisation.

With Mrs Cha's imminent departure, Financial Secretary Donald Tsang Yam-kuen last night appointed chief counsel Alexa Lam as a new executive director of the SFC.

But the commission still has to find a replacement for Mrs Cha as deputy chairman.

Mrs Cha is the third senior executive from the SFC to join the CSRC. Two years ago, former chairman Anthony Neoh joined as chief adviser -  at an annual salary of just HK$1 - and last year former deputy chairman Michael Wu Wai-chung also joined as an adviser, at an annual pay of HK$4.5 million.

Mr Neoh and Mr Wu are working on contract basis, which is different from the appointment of Mrs Cha, who becomes a Chinese government official.

Mrs Cha has not been appointed for a fixed term, but she has promised to work for the CSRC for at least two years.

She would now work for the interest of the state, and so she would not strike any conflict of interest or be in any difficult position when the CSRC needed to deal with issues relating to competition between bourses in China and Hong Kong, she said.

Mrs Cha joined the SFC in 1991 as assistant director for corporate finance and has been heavily involved in bringing Chinese enterprises to list in Hong Kong.

She became the SFC's No 2 in 1998. She put in her resignation in June last year. Mrs Cha expects working for the CSRC will be a new challenge.

SFC chairman Andrew Sheng said Mrs Cha's appointment was an honour for the SFC and for Hong Kong and he believed it could lead to closer CSRC and SFC links in the future.

New face; Critical juncture, Page 3



First overseas professional takes up post at vice-ministerial level