HKEX consultation prompts concerns

Business | Tereza Cai 22 Aug 2019

Hong Kong Exchanges and Clearing's (0388) consultation of relaxing rules for a listed company's secretary has caused worry over corporate governance. HKEX said under the new rule, the position's qualification would depend on whether the company has principal business outside Hong Kong, reasons why the directors consider the individual to be suitable, and whether the candidate will be assisted by a Qualified Person for not more than three years.

The consultation came after some mainland companies listed in Hong Kong did not fully follow the rules. BOC Hong Kong (2388) in 2016 appointed its senior manager Zeng Luonan - who did not have the qualifications and required experience - as company secretary, which sparked debate as HKEX had allowed the appointment.

Companies such as Carnival Industrial (1417), Haidilao International (6862), both newly listed this year, have also appointed company secretaries without experience in Hong Kong.

Current rules require a secretary to be professionally qualified and knowledgeable about the local stock market.

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