Saturday, November 28, 2015   

Attack on Li way off the mark

Mary Ma

Tuesday, February 12, 2008

The "Long Hair" of our stock market has hit out again. This time around David Webb's target is David Li Kwok- po.

Almost as soon as the US Securities and Exchange Commission's announcement of a settlement with Li and three others, whom it had accused of illegal tipping off and trading in the securities of Dow Jones & Co in the weeks before public disclosure of a takeover offer by Rupert Murdoch's News Corp in May last year, Webb wasted no time in calling for Li to resign from both the Executive Council and the legislature.

The SEC made the settlement announcement in the early hours of February 6 Hong Kong time and, within hours, Webb posted a statement on his website, launching the scathing attack on Li.


He said: "Early today HK time, avoiding local press coverage, the SEC announced David Li's HK$63.2 million settlement of charges of insider tipping in the Dow Jones case. We call on him to do the honorable thing and resign as a member of Hong Kong's Cabinet and legislature."

He also challenged that if Li was confident of his case, he would have fought on and cleared his name rather than settle.

Is it fair to denounce someone who has neither admitted to nor has been convicted of any wrongdoing?

As one may recall, what the US market regulator had filed was not a criminal but a civil lawsuit, which alleged that on April 12 last year Li learned of the confidential takeover offer put forward by News Corp for financial news service Dow Jones. He was accused of tipping off a close friend about the offer. Li denied the accusation when he was informed of the lawsuit in July.

Webb is certainly not the only person in town with an opinion on the case. Critics who have been watching the developments have been taken aback equally by the US regulator's readiness to settle the case with Li and the others.

Why was the regulator willing to settle the case if what had been alleged in the first place was anything serious? How good is the quality of the evidence it has collected over the months in building up a case against the persons it has made allegations against? Given the draconian powers and resources at its disposal, the regulator would be expected to pursue the case to the end should it be confident of the evidence in hand.

Webb did not raise these questions when he unleashed the attack on Li. The settlement statement issued by the SEC failed to provide an answer either. In the announcement, the US regulator merely repeated what it had said without giving new information.

Chim Pui-chung, who represents the financial services sector in the legislature, said he would not be surprised to see a settlement because "it is very common for the SEC to reach a settlement with people being investigated." It is sincerely hoped that Chim is wrong because, should he be right in his observation, it would cast doubt on the US regulator, which is not supposed to point its finger against anybody lightly.

Had Webb been fair in his criticism of Li, he should have asked Christopher Cox, chairman of the SEC, the same question: if the SEC was confident of its case, the regulator would have fought the case rather than settle it.

In the courts, a judge would always reserve the benefit of doubt for the accused. Webb, don't make yourself a judge.

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