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Enoch Yiu

The number of directors removed so far by the courts exceeds that of last year

Thirty-nine company directors were removed from their posts in the first 10 months for offences such as insider trading and market manipulation - exceeding the 35 who lost their corporate positions last year.

However,  the figure was lower than in 2001, when 56 directors were disqualified.

Secretary for Financial Services and the Treasury Frederick Ma Si-hang  said the directors were removed by  court processes for reasons such as fraud or negligence.

Included in the figures is Cheung Sing-chi,  the former chairman of fashion firm Gay Giano International Group  who, along with his brother Cheung For-sang,  was removed as a director after being sentenced to jail for manipulating trade in the  company's shares.

There were also cases included in which the courts removed directors as punishment for wrong-doing committed by a listed firm.

The average period of disqualification given to the banned directors was four years.

'Our legislation empowers the court to disqualify persons as directors of a company on grounds such as fraud and unfitness,' Mr Ma said yesterday.

'These figures are indicative of our determination to deter malpractice on the part of company directors,' he said, adding the Securities and Futures Commission and Hong Kong Exchanges and Clearing were considering introducing mandatory training for directors.

'Our target is for all new directors to be fully conversant with their duties and regulations to the company as well as the investors from the day they take up the job.'

Another way to  reinforce the quality of the market was to ensure the soundness of company audits, Mr Ma said. In September, the government completed a consultation on a proposal to set up an independent bureau to investigate accounting scandals.

'Comments received so far indicate general support for the establishment of the independent investigation bureau,'  Mr Ma said.

In related news, SFC chairman Andrew Sheng yesterday said the commission had begun informal consultation on  the tightening  of research analyst regulation, while public consultation would begin in the first quarter of next year.

Mr Sheng also said the SFC was still working with the China Securities Regulatory Commission to finalise  a mutual recognition agreement which would allow Hong Kong and mainland brokers to work in each other's markets.



39 company bosses sacked for trading malpractices