Bourse panel yet to decide on permanent successor to Li Xiaojia

Business | 29 Dec 2020 10:26 am

Picking a new top boss for the financial hub’s stock exchange is proving difficult, so far.

Charles Li announced his intention to quit as head of the Hong Kong Exchanges & Clearing  more than a year before his contract ended amid strained relations with Chairman Laura Cha, according to people familiar with the matter, Bloomberg reports.

Cha was put off by his free-wheeling style, which led him to sometimes not inform the board of important issues at an early stage, said the people, who asked not to be identified discussing private matters, Bloomberg reports.

More than seven months later and days before Li formally steps down on Deccember 31, the committee has yet to settle on a permanent replacement.

It’s split between prioritizing a candidate who can operate with confidence in China or one with a strong international background, the people said.

Cha, who is well connected in China and close to Hong Kong leader Carrie Lam, sees the bourse’s role as serving Bejing’s interests and avoiding competition with the mainland’s exchanges, one of the people said.

Li had seemed to thread the needle, credited with both internationalizing the exchange as well as building a bridge to China’s markets. Still, the former JPMorgan Chase & Co. banker was eventually seen as too outspoken and his aggressive – and failed – US$40 billion bid for the London Stock Exchange dented his standing.

He was forced to apologize last year after saying civil unrest in Hong Kong had exposed faults underlying the “one country two systems” framework for its return to Chinese rule. He said he had been misinterpreted.

In an interview with Bloomberg this month, Li said the CEO’s job is all about “steering conflict” both in Hong Kong and on the mainland, but also one that entails taking risks.

Candidates being considered include Liu Che-Ning, co-head of Asia-Pacific banking at HSBC Holdings, as well as the HKEX’s interim CEO and chief operating officer Calvin Tai.

Mark Machin, CEO of Canada Pension Plan Investment Board, and Philip Zhai, former JPMorgan Chase & Co. banker, have also been discussed, as has Wilfred Yiu, a former Goldman Sachs Group Inc. banker who joined the exchange as head of markets in 2019, people familiar said.

Liu, Machin, Zhai and Yiu all declined to comment while Tai wasn’t immediately available. Machin and Zhai remain committed to their current jobs, according to the people.

An HKEX spokesman said in an emailed reply that the selection process for the group’s next chief executive is being conducted by the board with “clear communication and transparency” and further announcements will be made when the process concludes. It declined to comment on any “gossip or speculation.”

For now, Cha views interim CEO Tai as a safe pair of hands due to his familiarity with the operations and infrastructure, according to people familiar. Tai’s operational approach would make him a good successor should Cha want to tighten her control of the bourse’s direction, the people said.

While Tai may be suited for the job, the 58-year-old could be approaching retirement age.

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