HKEx: Chairman Charles Lee's Statements On Market Consultation Relating To Listing Eligibility

English Transcript of Chairman Charles Lee's remark at today's press conference held at the Government Press Conference
28 July 2002

Good evening, ladies and gentlemen.

HKEx published last Thursday a Consultation Paper on Proposed Amendments to the Listing Rules relating to Initial Listing and Continuing Listing Eligibility and Cancellation of Listing Procedures. Proposals in the consultation paper aimed to introduce into the securities market a proper exit for listed issuers and strengthen protection of shareholders, especially minority shareholders, to promote corporate governance amongst our listed companies, and to strengthen Hong Kong's position as an international financial centre.

HKEx noted the concerns of the market over some proposals in our consultation. Yet I see some misunderstanding here. The market mistakenly believed that shares with a market price below 50 cents were to be delisted. However, we were only proposing that stocks falling short of the 50 cents mark should make good the deficiency by consolidating their shares, or by other means.

To meet the concerns and clear up misconceptions, HKEx has decided to take out the whole of Part C of the consultation paper for separate discussion with the market in order to strengthen the proposals. We will publish a supplementary consultation paper at the end of October and the market will be given three months to express its views. I reiterate that the original consultation document only suggesting that issuer can bring its share price in compliance with the proposed minimum level of HK$0.50 by consolidation.

HKEx will continue to collect market views on the other proposals set out in the consultation paper published on 25 July and the consultation period will close at the end of October. HKEx welcomes comments from all sectors of the market. After the consultation period and if any new rules are to be implemented, HKEx will allow the market a sufficient transitional period.

There will also be an appeal mechanism when the new rules are implemented. This will ensure that the new rules are implemented in a fair manner.

Finally, I wish to remind listed companies that they may consider repurchasing their shares to maximise shareholder value. This is allowed under the current Listing Rules.

Thank you.