Topic 1: Combating Insider Dealing and Enhancing the Governance of Information Disclosure
Mr Jim WARDELL, Chairman, Corporate Recovery Asia Limited represented the three English discussion groups to report back on the topic "Combating Insider Dealing and Enhancing the Governance of Information Disclosure". His sharings were as follows.
Matthew's Case
His wife was an insider dealer. Whether Matthew was one depended on his intention and
knowledge of the incident.
Whether the stockbroker was an insider dealer depended on whether he knew Matthew's status
and the source of information of Matthew's wife. If he suspected any insider dealing, he had a
duty to report it to the Securities and Futures Commission.
Fred's Case
He was in massive conflict of interest situation, and should not have taken up the post as
Chairman of the audit committee in the first place.
He should make further enquiry into the rumours about On Yee's possible bankruptcy. If
confirmed, he should take further appropriate actions.
In view of the possible lost of his independence, Fred should consider if he should resign
from the audit committee and he should disclose the genuine reason. If so, the Hong Kong
Exchanges and Clearing Limited or Securities and Futures Commission might also consider
if they should conduct compulsory exit interviews with Fred, in view of the heavy onus of
responsibility.
The Way Forward
Should we impose a maximum number of public company positions to be held by an
Independent Non-executive Director (INED)?
It was generally agreed among group members that there should be some sort of compulsory
education and guidance from the regulators to directors for the latter to learn about their rights
and responsibilities.
