Governance in Hong Kong: Indefensible

Ending a loophole for insider trading has created a tangle IT HAS engendered more vitriol, more bitter ferocity, than participants in the Hong Kong markets say they have ever seen. Front-page advertisements have been taken out in the local papers decrying the action. Some 236 companies have signed a letter of protest. David Li, head of the largest local bank and a member of the territory’s legislature, has said it is a “stupid” act that will undermine the viability of Hong Kong’s market, an opinion echoed by the heads of many large companies. Among the horrors forecast are unwarranted hostile takeovers, corporate exits, the death of stockmarket liquidity and, for the firm that is brave, or loyal, enough to stay on the Hong Kong exchange, managerial flight. Bizarre, then, that the catalyst for all this outrage is a rule change that is long overdue. Under Hong Kong’s stock-exchange rules, listed companies need to report results twice a year and have an inordinately long ... (link)