Lively debate continues to surround this widely vaunted transparency panacea It was a leaked snippet with the potential to rile: quarterly reporting would be put on the corporate reform agenda, potentially forcing companies into time-consuming and costly obsessions over earnings. Reaction to the news would surely be fast and fierce. Expectations of feisty debate this week were, however, eclipsed by a pervading sense of deja vu. Quarterly reporting was mooted as a transparency panacea back in January last year, but the stock exchange backtracked on the idea in November after months of vocal opposition from stalwarts such as HSBC Holdings and CLP Holdings. The proposal made an unexpected comeback this week, with sources at the exchange leaking the fact that another round of consultations is on the cards. HSBC Holdings did not disappoint in its opposition. The bank's Asia-Pacific chairman David Eldon noted: 'If quarterly reporting is really so good, we would not have seen so many corporate scandals in the US.' The same day, however, Frederick Ma Si-hang, secretary for financial services and the treasury, threw his weight behind the idea. His comments that quarterly reporting was a worldwide trend Hong Kong could not afford to ignore suggested a degree of inevitability. Supporters of quarterly reporting were, however, cynical - not so much that those with financial and political clout would again win the day - but that this was just a scrap being thrown out to appease market reformists festering over more acute local governance issues. The stock exchange's sudden change of heart has been interpreted by some as more of a concern that Hong Kong is in danger of being dubbed a laggard backwater than a devout desire to enhance transparency. David Webb, editor of Webb-site.com, admitted he was 'slightly cynical'. 'Pressure is on them because of the expert group report [on the front-line regulatory role in Hong Kong]. Suddenly everyone is interested in regulation.' A more sweeping reform was to be the shifting of the front-line regulatory role from Hong Kong Exchanges and Clearing (HKEx) to the Securities and Futures Commission. This was also the subject of a U-turn. Then financial secretary Antony Leung Kam-chung endorsed the proposal in March, but after fierce lobbying from HKEx, the government opted for further consultation. Mr Webb noted Mr Ma's statement that 'Hong Kong should not get too far away from international standards because it is an international finance centre' was 'partly an ambitious statement'. Quarterly reporting however 'isn't a solution to bad governance. It's just one aspect'. Others see quarterly reporting as a misplaced badge of quality about the markets. 'There are lots of other issues about quality of information which would be nicer to address,' a senior regulator noted. Some are achingly basic: last year, for example, 86 listed firms flouted the most basic corporate filing requirements. There is also a running tally of about 50 listed companies with qualified or modified audits. Many struggle to release annual results on time, citing such reasons as 'more time needed to evaluate current projects' or 'awaiting confirmation of financial data from its PRC subsidiaries'. A total of 26 public firms had delayed issuance of their results up to August 28. Despite the concerns over quality, quarterly reporting may force some companies to re-focus resources in-house to get the relevant information. Companies will argue it is a cumbersome, expensive and short-sighted process. In the United States, this became a credible contention given the tendency for executives to seek short-term ways to boost their firm's share price. There is no empirical evidence to back either the crusaders or fierce opponents. Two of the most successful markets in the world - New York and London - take opposing views. The sway of opinion in Hong Kong appears to be leaning towards the notion that quarterly reporting is inevitable, albeit for the simple reason of keeping up appearances.