Articles: Independent Non-Executive Directors

Sanctions on HK Resources (2882) and 8 directors
SEHK, 4-Dec-2023
In 9 months, 12 "loans" were made to 9 borrowers, all of which fully defaulted. SEHK calls the audit committee, comprising INEDs, "notably ineffective". We note that one of them, Anthony Fan Ren Da, sits on 12 HK-listed boards, making him the third-busiest listco director. He's also Founding President of the HK INED Association, leading by example. Another INED, Loke Yu, sits on 5 boards. We remind you that in HK, controlling shareholders, who are often executives, vote in INED elections.
Webb on "Backchat" re the HK stock market and how to fix it
RTHK, 29-Aug-2023
SFC obtains disqualification orders against former directors of Long Success International (Holdings) Ltd (delisted)
SFC, 27-Apr-2020
As is common in HK, the so-called INEDs were asleep at the wheel.
Celebrate (8212): Citizens Money Lending Corp Ltd appoints Mr Tang Shing Tung as Receiver of all assetsAnnual report
Company announcement, 4-Jul-2019
This is pursuant to a debenture created on 25-Jan-2019 and an alleged event of default. We note that Vincent Chow Chi Wah, INED of Celebrate since 31-Aug-2018, is Managing Director of Oshidori (0622), which owns the lender. In our view, directors of creditors, which are in a commercial relationship and rank ahead of shareholders on a liquidation of a company, should not also act as INEDs. Update: Celebrate's annual report at 30-Jun-2019 shows that it borrowed HK$100m under the facility and had invested $50m in Oshidori shares during the 6 months to June.
Andrew Fan, Universal INED
A quick look at tomorrow's new listing sees an INED taking his 10th board seat. In our view, he should have found time to check his prospectus biography more carefully. (15-May-2019)
Chung Keng v Pearl Oriental Oil (0632)
HK Court of First Instance, 2-May-2019
"If it is possible for a company to obtain from the Exchange approval of the appointment of Ms Lyn it goes some way to explain why the Companies Court rather too frequently encounters examples of inadequate corporate governance by Hong Kong listed companies. I will be sending a copy of this decision to HKEx and I would hope that it will look into this matter." - Justice Jonathan Harris. Our comment: the judge misses the point. INEDs should be elected by independent shareholders. The INED system is a joke, so long as HKEX allows controlling shareholders to vote.
Hopewell and the lemon discount
What does the ability to take a company private for 57 cents on the dollar say about the future of HK's public market? Failure to reform HK's laws and regulations to improve the corporate governance framwork will see the market shrink over time as good companies stay away and controllers take existing companies private. (22-Mar-2019)
Webb on "The Pulse" re the Enigma Network (video)
RTHK, 16-Dec-2017
Webb: HKEX reforms won't help independent directors
RTHK, 10-Nov-2017
If only INEDs were independent
David Webb will be speaking at a conference in HK today. These are his slides, on the most fundamental issue in HK corporate governance. (10-Nov-2017)
Koo Ming Kown v SFC
HK Court of First Instance, 21-Jul-2017
The SFC succeeds in its application to strike out Mr Koo's claim.
Koo Ming Kown v Pacific Online Ltd (0543)
HK Court of First Instance, 16-May-2017
Koo Ming Kown v Pacific Online Ltd (0543)
HK Court of First Instance, 24-Feb-2017
Mr Koo's claim is struck out because he has no locus standi. He is not a shareholder.
Presentation on HK securities market reform
These are the slides from a presentation by David Webb to accountants hosted by legislator Kenneth Leung this evening. (16-May-2016)
All 3 INEDs of Imagi (0585) quit and are replaced by "Chung Nam Network" people
Company announcement, 28-Jan-2016
They simultaneously decided to "devote more time to their other business commitments" and 3 people associated with what we call the "Chung Nam Network" are immediately appointed to replace them.
Automated Systems (0771): all 3 INEDs resign due to "personal business pursuits"
Company announcement, 23-Sep-2015
This comes 6 days after ASH said that 3 other people had "ceased to be" members of the Management Committee. Yet the company says the 3 INEDs have no disagreement with the Board and there are no matters that need to be brought to shareholders' attention.
Hua Han Bio (0587): all 3 INEDs replaced
Company announcement, 24-Jul-2015
All 3 INEDs resigned simultaneously, 2 due to "other personal commitments" and 1 due to "other business commitments", and were immediately replaced.
Petition filed with SEHK and Listing Committee
We close and submit the petition on 1-share-1-vote, and call on the Listing Committee to get back to improving the quality of HK's market rather than trying to degrade it, starting with 4 key issues. (2-Jan-2015)
Women and the size of HK boards
Webb-site has completed a database on HK-listed boards since 1990. We begin a series of analyses on board composition, starting with the number and proportion of women on boards, and the size of boards in response to changing rules on the number and proportion of "independent" directors. (13-Sep-2013)
Rusal (0486): Barry Cheung Chun Yuen resigns as INED
Company announcement, 27-May-2013
"to focus on personal business matters". Amazingly, the Stock Exchange has started waiving its new rule on requiring one-third of the board to be "independent". Rusal was at 5/18 before Cheung resigned, and 27.8% is "very close" to one-third, they say. Presumably 3/10 (30%) or 3/11 (27.3%) is also OK? This effectively reduces the minimum to one quarter (25%).
All 3 INEDs quit at Tack Fat (0928), reasons not stated...
Company announcement, 15-Aug-2011
...and 4 new INEDs and 1 ED are appointed, all of whom have past or present connections with other members of what we call the "Chung Nam Network", including Mascotte (0136), Forefront (0885), Willie (0273), Radford (0901) and Dragonite (0329).
Current issues in HK-listed corporate governance
A presentation by David Webb at a conference in HK. (27-May-2011)
INEDs of China Daye Non-Ferrous (0661) missed all 18 board meetings in 2010
Company filing, 29-Apr-2011
See page 26 of the annual report.
The three wise monkeys of HK boards
SEHK has proposed minor reforms to the composition of boards which completely miss the core issue - INEDs are only as independent and competent as the controlling shareholder wants them to be, as long as he or it votes on the INED elections. We call for independent directors to be independently-elected. Tell us what you think!. Read our article and then take our poll on INEDs. (15-Feb-2011)
Campaigner Webb sees flawed boards
HK Standard, 9-Feb-2011
Webb, other key business leaders interviewed by IFAC
International Federation of Accountants, 6-Aug-2010
See Theme 3: Business reporting through the lens of the investor.
All 3 INEDs of Vitar (195) resign simutlaneously "due to their other business commitments"
Company announcement, 23-Dec-2009
Chung Tai Printing (0055): INED Alfred Au Yan to step down at AGM
Company circular, 30-Jul-2009
This comes after he publicly objected to last month's connected transaction with the controlling shareholder.
Chung Tai Printing (0055): INED Alfred Au Yan disapproves of connected transaction
Company announcement, 16-Jun-2009
A rare case of an INED objecting to a transaction which "might be seen as a move to channel cash from the Company to Suek Family as no independent shareholders' approval is required". The stock closed at $0.315, up from $0.072 two months ago. So the market cap is HK$3211m, and the $65m purchase price is less than 2.5% of that, so no approval is required. But the net assets of the company were only $780m at 30-Sep-2008. Christopher Suek grants a put option to allow the Company to get its money back within 2 years.
3 INEDs of Climax resign simultaneously
Company announcement, 27-Mar-2008
Building a Value Proposition for HK
HK Chief Executive Donald Tsang recently convened an Economic Summit of 33 people, which spawned 4 focus groups, including one on financial services, which in turn produced 3 working groups, one of which, headed by HKEx government-appointed director and Chairman Ronald Arculli, has sought submissions on the markets. This is our submission. (4-Oct-2006)
Listing Rules Review Part 2: Board Games
In Part 2 of our review of the proposed Listing Rule changes, we look at the fundamental question of independent directors and committees. Here again, the SEHK wins a perfect 6.0 in the "form over substance" category. They are skating on thin ice by allowing controlling shareholders to elect " independent" directors, a system which has failed to prevent numerous horror stories on Independent directors should be elected by independent shareholders. (21-Feb-2002)
Hong Kong's not so Independent Directors
How Hong Kong's controlling shareholders appoint the Independent Directors who are supposed to prevent them from abusing the company, and what to do about it. (20-Apr-1999)

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