BOCHK demonstrates the hard questions just have to be asked
LATE LAST YEAR, an investment banker involved in the initial public offering of BOC Hong Kong (Holdings) had lunch with three South China Morning Post journalists and one ghost - in the form of former BOCHK chief executive Liu Jinbao, who the previous May had been recalled to the mainland in connection with a corruption investigation.
The banker was asked whether, in the course of preparing BOCHK's flotation on the Hong Kong Stock Exchange, he had ever asked Mr Liu if he were the subject of any such inquiry.
The banker appeared to be appalled at the very suggestion. Describing the atmosphere at official IPO preparatory meetings - highly formal affairs involving large BOCHK entourages and the odd silent spook types who were never formally introduced - the banker replied: 'Can you imagine asking [Mr Liu] such a question?'
'Well, yes, I can,' was the thought that crossed the mind of one of the reporters present, along with the impression that the banker had chosen his career well - for he would have made a miserable journalist.
After all, former Bank of China chief executive Wang Xuebing had been sacked just six months before its Hong Kong operations listed and would later be sentenced to a 12-year prison term for bribery and embezzlement.
In addition, BOCHK's listing prospectus featured a special two-page section about 'incidents attracting adverse publicity to BOC'. These included a US$10 million fine paid by BOC's New York branch to United States regulators after an investigation into 'loan fraud and other suspicious and potentially fraudulent activities' and the embezzlement of US$500 million by managers at BOC's branch in Kaiping, Guangdong province.
Subsequent events have demonstrated that putting Mr Liu on the spot would have been the right thing to do. Of the five most senior BOCHK executives at the time of its listing, two have been suspended (deputy chief executives Zhu Chi and Ding Yansheng), one forced to resign (former deputy chief executive Or Man-ah) and another detained (Mr Liu).
