Hong Kong Minister Supports Quarterly Reporting For Listed Companies

LawAndTax-News.com, Hong Kong

03 September 2003

After the South China Morning Post reported on Monday that Hong Kong Exchanges and Clearing is planning to consult the market again on the adoption of quarterly reporting and the disclosure of individual directors' pay by name, Frederick Ma Si-hang, the secretary for financial services and the treasury, said yesterday that quarterly reporting was a worldwide trend and Hong Kong could not afford to be a laggard.

"Hong Kong should not get too far away from international standards because it is an international financial centre," Mr Ma said, according to the newspaper. "The government will support any reforms that will enhance the corporate governance standards of the local markets."

"Many executives of mainland enterprises have told me that Hong Kong should maintain a very high corporate governance standard. This is vital to ensure the good reputation and attractiveness of the local stock market."

Large companies listed on the exchange, including banking giant HSBC, are opposed to the extra work that quarterly reporting would entail, but Mr Ma said that EU rules would force HSBC to report quarterly in any event: "HSBC will not be able to escape from the rule changes. If the EU and London are all moving ahead to quarterly reporting in 2005, companies such as HSBC, which are listed in London and Hong Kong, would also need to do so."

HKeX put forward proposals last year for the move to quarterly reporting and disclosure of directors' pay levels, but after very negative responses from HSBC and other large companies, was forced to withdraw them.

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