Shareholder activist quits Hong Kong exchange board over governance

HONG KONG, May 16, 2008 (AFP) – Hong Kong’s leading shareholder activist has quit the board of the city’s stock exchange, accusing it of being under the influence of politicians and compromising its listing standards. David Webb, who has been a constant critic of government interference on the exchange operator, Hong Kong Exchange and Clearing, resigned in a letter released by the company.

He cited failures by the company to provide board members with some information and that the board had not been informed of the content of certain meetings between the exchange and third parties.

He also said that the directors appointed by Hong Kong’s government had changed their minds under the influence of politicians.

“The occurrence, on several occasions during my five years on the board, of u-turns led by government-appointed directors on what were clearly political grounds,” he said, listing the six reasons for his departure.

He specifically cited a proposed move to create a “professionals only” listing segment with lower corporate standards than the main exchange, as a reason for his departure.

“Running a low-standards board alongside that can only lead to regulatory arbitrage and reputational damage