Despite the prominence given to corporate governance issues this year, Hong Kong public companies still breached the spirit, if not the letter, of the regulations in brazen fashion.
One of the most questionable instances concerned New World Development (NWD), alleged to have leaked information to favoured analysts about its upcoming earnings.
NWD's shares plunged almost 25 per cent in a week in mid-March after several investment analysts slashed their interim profit forecasts by more than half. Goldman Sachs cut its estimate to HK$300 million, after it claimed to have received guidance from management, one day after saying it expected the figure to be HK$730 million.
The revised estimates were almost spot-on as interim net profit came in at HK$311.4 million. The market was sceptical but NWD managing director Henry Cheng Kar-shun denied any improper disclosure.
Releasing information in this way harms minority investors as the market-sensitive information usually gets passed on to institutional players first, allowing them to trade ahead of other investors.
Just over six months later history seemed to repeat itself. Estimates tracked by Thomson Financial First Call showed five brokerages downgrading their forecasts over three days in early October, three of them by more than half. The full-year profit of HK$220.5 million was announced a few days later, less than half the revised estimates and a quarter of the previous forecasts.