The Hong Kong Exchanges and Clearing has named a co-head of the unit vetting IPOs and a head of listing compliance – a newly created position – after the bourse’s reputation took a hit for lacking internal controls.
The HKEX hired former PwC accountant Karen Lok as its senior vice-president and head of listing compliance and ex-TPG Asia deputy general counsel Janice Wu as managing director and co-head of IPO vetting, according to a statement.
Wu joins Stephanie Lau, the other co-head of IPO vetting who replaces Eugene Yeoh Kim-loong who is facing charges for allegedly accepting bribes of around $1.2 million in exchange for IPO approvals.
Better Chinese Wall
The appointments follow a recent report by the Securities and Futures Commission (SFC) which claimed that the HKEX failed to sufficiently build a «Chinese Wall» as a barrier to block information exchange between executives motivated by listings and vetting unit which should be focused on objectively assessing candidates.
«The listing department’s Chinese wall protocol contains numerous ambiguities, does not fully address key aspects of the Chinese wall and may be difficult for department staff to interpret and follow,» the report said.
Risky behavior underlined include «repeatedly referring to the desirability of those applicants or by copying the chief executive to whom the head of listing reports on an email».
Listing Reshuffle
Lok, Wu and Lau report to Bonnie Chan, HKEX head of listing, who was hired in January this year from law firm Davis Polk to replace predecessor David Graham. Graham was also named in the SFC report in an example of closeness between pro-listing executives and vetting officers for simultaneously attending introductory meetings in 2018 with prospective IPO candidates alongside HKEX chief executive Charles Li Xiaojia.
«As part of our ongoing enhancements to our operations, I’m today pleased to announce a new specialist Listing Compliance function to help provide oversight and support to the Listing Division at HKEX,» Chan said.
«With my leadership team now in place, I very much look forward to continuing to build the robustness and competitiveness of our listing regime, and to working to enhance Hong Kong’s leading global position as an international financial market.»