Mainland companies seeking to list on the Hong Kong stock exchange should be made to disclose whether they have outsourced their property valuation work, surveyors and financial analysts say. Industry players are becoming increasingly concerned about the lack of transparency in the property valuations of these firms. Veteran surveyors who specialise in the area say that most property consultants responsible for undertaking valuations for mainland firms ahead of their listing outsource their valuation work without disclosing that they have done so in their reports. 'Some valuers [for mainland companies seeking to list in Hong Kong] have actually outsourced more than half of their valuation work to mainland valuers without disclosure,' said a director of an international property consultant who did not want to be named. 'It is quite problematic. The valuers who are signing the property valuation report have not inspected the properties themselves.' The current listing rules require that property valuation be conducted by a registered member of the Hong Kong Institute of Surveyors or the Royal Institute of Chartered Surveyors (Hong Kong Branch). However, there are no mandatory rules for disclosing outsourced work. 'There is no problem with outsourcing itself. As some mainland companies have over 100 properties all over the country, it is quite impossible to inspect every property,' the director said. 'However, the appointed valuer should disclose work that is subcontracted and [name] the companies involved, so that the public can have better knowledge of how the due diligence work is done, and [which] company [has] inspected the properties,' he said. The central government recently tightened regulations so that only top-grade mainland valuers (with more than six years of valuation experience and registered capital of more than 2 million yuan) can conduct property valuations for companies seeking to list in the mainland, starting from next month. 'The rule has little to do with Hong Kong,' said Chiu Kam-kuen, executive director of valuation at DTZ Debenham Tie Leung. 'However, it is a clear sign that the mainland is quite keen on improving the quality of the industry, and it should shed some light on Hong Kong regulators in maintaining the quality of property valuation.' In a move to improve valuation standards, the Hong Kong Institute of Surveyors drew up a list of 109 property surveyors who can undertake valuation work for companies involved in IPOs, takeovers and mergers. Those on the list must be general practice members of the institute, registered property surveyors and have at least three years of experience. 'It is extremely difficult to ascertain whether a firm has outsourced its work,' said one valuer. 'So far, we have seen only a few firms willing to disclose their outsourced work, and this is mostly work done in countries where they have no office at all. 'The current regulation is insufficient for regulating property valuation,' said one financial analyst. 'More has to be done to improve the quality of the industry.'