STOCK Exchange of Hong Kong chairman Charles Lee Yeh-kwong is the man at the centre of efforts to co-ordinate the listing of Chinese state-owned companies in Hong Kong.
In a wide-ranging interview, Mr Lee explained the way state companies were listed abroad and the associated problems that have sometimes arisen. Q: Mr Lee, so far there are six Chinese state-owned companies listed on the Stock Exchange of Hong Kong, andthe second group of companies has also been chosen. Has the exchange conducted any review to assess the experience of the first phase of the listing? A: The listing division of the stock exchange constantly reviews our experience with the listing of H shares. So far we have listed six shares.
On the whole, the listings have been very smooth. There were discussions about the pricing mechanism and the offer mechanism of the H shares. Our job is to ensure the offer mechanism is fair and there is a sizeable proportion of shares for the Hong Kongpublic. Q: There are three companies in the first group which have yet to be listed. Why? A: Basically each company has to go through a restructuring process. Sometimes the delay is really in the restructuring of the company.
At the Hong Kong stock exchange, the regulatory framework that we provide for H shares calls for very high standards. All these issues are floated to international standards.
In particular, the financial statement must be prepared in accordance with Hong Kong or international accounting standards. On top of that, they have to comply fully with our very stringent listing rules. So that really takes time. Q: Are the requirements too stringent for the Chinese companies? A: I don't think we over-regulate these companies. In fact you can see the six H shares - they met a very enthusiastic global response and support.
The market success is indicative of the impressive performance of these shares, which have shown gains in value ranging from 60 per cent to 150 per cent from the issue prices.