Plan aims to give misconduct tribunal power to fine directors of listed firms that mislead the public Listed companies or directors who mislead the public could be fined up to $8 million under a government proposal to increase the penalty powers of the Market Misconduct Tribunal. In another move aimed at giving regulators more teeth, the government wants to allow the Securities and Futures Commission to impose a maximum fine of $5 million on directors or companies who breach statutory listing rules. Now, it can fine only brokers. The new punitive powers, which also allow for the public reprimand of offenders, are key recommendations in a reform package issued by the Financial Services and Treasury Bureau and the SFC yesterday for two months of consultation. The government plans to submit the proposals to the Legislative Council before July. The tribunal, a civil court, already can disqualify a person from being a director for five years and impose 'cold shoulder' bans on anyone trading or raising funds in the local market. However, company officers will not be subject to the new fines. The government is worried that could affect too many people and would breach human rights legislation. Legislator for financial services Chim Pui-chung said the measures were needed. 'It is better to use money to resolve a problem related to money matters. This is a sensible move to allow listed companies and directors to pay a fine for their wrongdoing.' However, John Brewer, the general editor of Corporate Governance International, said he was worried that the SFC would wield too much power and would not be subject to enough accountability. The package is a diluted version of an earlier government market reform plan. Last year, it dropped an ambitious plan to shift the vetting power for new listings from the stock exchange to the SFC. Instead, it suggested giving certain listing rules to the SFC to afford it some statutory power. Frederick Ma Si-hang, the secretary for financial services and the treasury, said the proposals would enhance market quality and match international standards. The government is acting to tighten regulation on disclosure after a series of corporate scandals in the past few years, such as the one that tainted now defunct Euro-Asia Agricultural (Holdings). It collapsed two years ago after it was found to have inflated its revenues by 20 times in the four years leading up to its listing in July 2001. 'The proposal for legislative amendments is in line with the government's commitment to enhance corporate governance standards, thereby upgrading the quality of our market and further strengthening investor confidence,' Mr Ma said. As announced last year, the listing rules given statutory power are those that are disclosure related, including disclosure of price sensitive information, annual reports, result announcements, large transactions and connected transactions between major shareholders and companies. The government said the SFC could impose a penalty directly without going to court to enable speedy enforcement. The reform papers did raise the question of new measures to monitor the commission in exercising its powers.