HKEx has requested the mainland chain appoint another independent director Lianhua Supermarket, China's largest supermarket chain, has delayed its US$100 million Hong Kong listing plan after discovering that some of its management failed to meet listing requirements. A source close to the company confirmed a weekend press report that Hong Kong Exchanges & Clearing had asked the firm to rectify the situation before the listing plan could proceed. BNP Paribas Peregrine and HSBC are the sponsors for Lianhua's listing plan. Lianhua received a letter from HKEx after a listing hearing on Thursday asking the supermarket chain to appoint a qualified person with knowledge of Hong Kong laws and accounting rules as the company secretary. Lianhua had applied for a waiver on appointing a mainlander as its company secretary, but HKEx rejected the application. Only one of the company's directors is not a mainlander, and HKEx also wants the supermarket operator to appoint another independent non-executive director from Hong Kong. Lianhua had originally planned to be listed in Hong Kong by late next month. But the company's plans are likely to be delayed for at least a month, according to a source close to the deal. Mainland retailers are eager to tap the Hong Kong stock market as the Sars outbreak recedes locally, brokers said yesterday. Lianhua has not published the amount it wants to raise but brokers put the figure at between HK$800 million and $1 billion. Should the firm list next month, it will be the first mainland retailer to go public since the Sars outbreak. When it applied in February, Lianhua was China's second-biggest retailer. However, last month its parent, Shanghai Friendship Group, merged with three other city companies to form Shanghai Bailian Group, China's biggest retail and distribution firm. Its combined revenue last year of 75 billion yuan (HK$70.29 billion), ranked it 13th among China's top 500 companies. Also preparing an application to list and raise HK$100 million to $200 million is Beijing Wumei Commercial Group, one of the capital's biggest retailers with sales last year of 5.06 billion yuan, ranking it 12th among franchise stores in China. Wumei was set up in 1994, under the auspices of what was then the Ministry of Internal Trade, with 10 major shareholders, including Bei Mei Wu Chan Group, China Futures Broking, Beijing Tourism Group and Taikang Life Insurance. It operates four hypermarkets, 332 supermarkets and 19 convenience stores in Beijing and east China and wants to use money from the stock market as part of an investment of several hundred million yuan to take over 135 supermarkets in Tianjin. One problem for those valuing the company is the fact that it does not own most of the shops it operates. When the group was established, it had few outlets of its own and decided that to expand quickly, it would take over existing shops through leases or joint ventures, in which ownership remained with the original party while it took management. In this way, it was able to grow quickly, taking over state food shops and vegetable markets. In the second half of 2001, it set up four big supermarkets, each more than 3,000 square metres, in Shanghai, Hangzhou and Beijing, and established a joint venture distribution firm.