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Hong Kong Stock Trading Suspension Transparency Enhanced

by Mary Swire, for, Hong Kong

26 October 2007

The Hong Kong Stock Exchange has adopted measures to enhance the stock trading suspension mechanism's transparency, Secretary for Financial Services and the Treasury Professor KC Chan has announced.

The measures include publishing the conditions imposed for resumption, asking the suspended issuer to publish a regular update, and automatically invoking the delisting procedure if a security has been suspended for a prolonged period of time without the issuer taking steps to achieve resumption.

Professor Chan told lawmakers on Wednesday that as of October 16, 29 Main Board and 16 Growth Enterprise Market listed companies were regarded by the exchange to be long-suspended. Thirty-eight of these companies have been suspended from trading for a period of more than one year.

Professor Chan explained that: "For these companies there are a variety of reasons why trading has yet to resume after such a period. Resumption of trading will depend on the circumstances of each company and its efforts to address the circumstances pertaining to the on-going suspension. Most of these companies are experiencing financial difficulties or lack sufficient operations to maintain their listing status."

According to Chan, the Hong Kong government has stated that a lack of co-operation or responsiveness from listed issuers was the main cause for the prolonged suspension of a number of them, in addition to the lack of transparency in the process. The majority of such suspended listed issuers either delayed the provision of relevant information, or provided incomplete and piecemeal information regarding the problem that led to the suspension.

Without the full co-operation of the listed issuers, the Exchange will be denied the information necessary to form a complete picture of the extent of the problems faced by a listed issuer, he added.

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