STOCK Exchange officials are investigating a locally listed company concerning the independent status of the director. There are 'around seven' firms who currently do not comply with rules which say all listed firms must have an independent non-executive director, according to Herbert Hui, head of the Stock Exchange Listing Division. But Mr Hui said that the problem was 'largely due to staff turnover'. He admitted that at least one company was currently being investigated for not having a truly independent director. 'I cannot name the company because we say he is not independent, they say he is. We are talking to them still,' he said. The Securities and Futures Commission may also be involved in the case, an SFC spokesman said. All listed companies have been required to have a non-executive director since January 1 this year and will have to have two directors from the start of next year. But when requested for a list of all companies which were not complying with the then rule, Mr Hui's office refused to supply it. Instead, a brief statement was faxed saying that in most of the cases a director had left and a new one had not yet been appointed. Non-executive directors are supposed to act as the minority shareholders' friend. In a speech made earlier this month, Laura Cha, executive director of the SFC, said that the exchange had introduced a corporate governance working party with the aid of the commission. She said the Hong Kong Code of Best Practice calls for independent non-executives to approve directors' pay rises and to form audit committees to study company accounts and reports. 'The non-executives are expected to play an important role on the remuneration and audit committees,' she said.