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. Among smaller companies, the story of vLink Global - of which control changed hands on a few occasions this year - could send a shiver down the spine of minority investors. The technology investment vehicle was formed in April last year with big-name shareholders including South Korean giant Samsung and a fund owned by United States conglomerate General Electric. Hong Kong-listed financial holding company Yu Ming Investments was also an investor and the two top managers came from Microsoft. The technology bubble burst soon after the company was formed and investors disagreed over what should be done with their cash-pile of almost HK$500 million. The squabbling led to legal actions that dragged on into this year. First Yu Ming sold out to a member of the Heung family in December last year - Andy Heung Wah-kwok - after it claimed not to have been properly consulted on a number of deals. Through court actions Yu Ming stopped vLink investing HK$324 million in two firms but an attempt to prevent a US$12 million investment failed. Shortly after Mr Heung's arrival vLink invested HK$255 million for an 85 per cent stake in an online video retailer, which on the face of it looked like an expensive deal. The online video retailer had a net asset value of less than HK$1 million. This time Samsung went to court to stop the investment and teamed up with the General Electric fund to propose the appointment of 12 new directors to get control of the board. Both actions failed and the online video retailer investment was completed in February. Then Yu Ming bought back into vLink with a 27.55 per cent stake - less than two months after selling out. Yu Ming then sold out again in October. Throughout the legal battles and changes of control at vLink the minority investor was sidelined and the share price plunged. Today the company is under new ownership and plans to invest in mainland biotechnology and property projects. VLink's share price still languishes at less than 2 HK cents - far below the level seen before the company embarked on its forlorn technology adventure. Even when the regulatory authorities took action against listed companies and directors, their orders could be ignored as in the case of Dong Jian Tech.com Holdings. Executive directors Vincent Ngai Man-sang and Ngai Hor-ying refused to step down as demanded by Hong Kong Exchanges and Clearing, which threatened to remove the firm's listing status. For one year the company had failed to maintain the required public float of 25 per cent. 'We acted on the advice of a financial expert and we were not familiar with the rules then,' was Mr Vincent Ngai's defence. In September the Ngais sold their stake in Dong Jian, and as a result were expected to step down from their directorships. Minority investors were potentially short-changed by HKCB Bank Holding which sold its prime asset, Hongkong Chinese Bank, to leave themselves with a HK$4.2 billion cash-pile. The sale was worth HK$3.10 a share but shareholders are only getting a HK$1 special dividend or an aggregate HK$1.35 billion. Minority investors did not get near the remaining funds, which are to be used for investments though no deals have been identified yet. The market was not very confident about the firm's investment skills and the shares closed last Friday at HK$2.075 - below the HK$2.10 per share the company should be holding in cash after paying the special dividend. Given the sale of the company's key asset the fair method would have been to disburse all the proceeds among shareholders and then hold a rights issue to raise funds from those who wanted to be part of the new undefined investment plans. Minority shareholders fought back in another banking deal with parallels to the HKCB Bank Holding deal. Guoco Group only just gained the majority of shareholders' approval for its share buyback programme. Last month, shareholders were offered HK$50 to HK$55 per share - a sharp discount to net asset value but a premium to the market price then. In April Guoco had received more than HK$75 a share from the sale of its key asset - a 71.3 per cent stake in Dao Heng Bank. Selling at less than net asset value when the company held most of its assets in cash or gambling on the uncertain future development of Guoco was not a great choice for minority shareholders to make. It appears that the Securities and Futures Commission and HKEx have a long way to go before good corporate governance is practised in Hong Kong.