HKEx defends decision to support London candidate over local rival in board election
Exchange operator needs someone with experience in commodity trading, Chow Chung-kong says
Hong Kong Exchanges and Clearing chairman Chow Chung-kong defended the market operator’s decision to vote against a shareholder-nominated candidate at an upcoming shareholders’ meeting while favouring a rival candidate from London who has experience in commodity trading.
“The board of HKEx has the duty and responsibilities to make the decision on what we believe to be for the best interests of our shareholders. We believe HKEx would definitely need someone with metal trading and commodities experience on board. This is why the exchange has made our position very clear on which candidate we want the shareholders to vote for,” Chow said on Tuesday.
The exchange operator stirred up controversy when it issued a circular on Friday calling for shareholders to support Apurv Bagri, the London-based chief executive of Metdist Group, for a seat on the board during a vote slated for the annual shareholders’ meeting on April 28.
The circular also asked shareholders to vote against another candidate, Hong Kong-based fund manager Edward Chin Chi-kin, who was a supporter for the Occupy Central movement in 2014 and is now still active in politics.
The pair are vying for the vacancy left by the retirement of Oscar Wong Sai-hung.
Chow said HKEx gave its full support to Bagri because none of the existing 13 board members had any experience in or knowledge about metals or commodities trading. The exchange in 2012 spent £1.38 billion (HK$15.28 billion) buying the London Metal Exchange, the world’s largest, in its first step to expand into commodities to diversify from stock trading.
“The LME now represents almost 20 per cent of the profit of the exchange. We have a lot of big plans in metal trading, including the establishment of the London-Hong Kong connect to encourage more metal trading in Hong Kong. We also want to set up a physical warehouse in mainland China,” Chow said.
“When we proceeded with the reform of the LME warehouse system two years ago, some operators tried to sue us. No one on our board has experience in dealing with these metal-related issues. This is why we believe it is important for our shareholders to vote for Bagri, who will bring his experience in and knowledge about metal trading to the board.”
He said that since there was only one vacancy so he could not ask shareholders to vote for both candidates.
“HKEx also takes the view that asset management is important but we already have board members who have knowledge about the investment market. We made our choice based on the candidates’ background and experience and not the individuals,” Chow said.