Hong Kong Chief Executive Defends Penny Share Panel

by Mary Swire, Tax-News.com, Hong Kong

05 August 2002

Many voices have been raised in Hong Kong in protest against the 2-man panel set up by Financial Secretary Antony Leung Kam-chung to look into the penny-share fiasco which has left the SAR's economic managers looking foolish, saying that it has insufficient credibility.

After Hong Kong Exchanges and Clearing announcement of proposals ten days ago for the compulsory de-listing of penny shares, which caused panic selling, the Government had to step in to tell HKEx to withdraw its proposals for further consideration, and Mr Leung set up the panel to investigate the incident, saying that he would resign if found to be culpable.

However Chief Executive Tung Chee-hwa said on Thursday that there would be no cover-up in the government's investigation into the penny-stock fiasco.
"If the investigation findings show someone has committed dereliction of duty or made a mistake and should hold responsibility, we will certainly take follow-up action," he said.

Critics are saying that a statutory enquiry should be set up through the Chief Executive's office. But a senior official points out that the two investigators, former stock exchange council member Gordon Kwong Chi-keung and barrister Robert Kotewall are independent experts who do not have to kow-tow to the government.

Although Mr Tung ducked questions on the degree of blame to be shouldered by Frederick Ma Si-hang, Secretary for Financial Services, he looks vulnerable. Mr Ma told a Legco financial affairs panel meeting last week that he bore a certain degree of responsibility for the incident, but said no one had warned him about the specific details of the stock exchange's delisting proposals - even though they had been widely trailed in the media. At best, he has been badly advised.

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