Corporate Dimensions of the Securities and Futures Ordinance

The enactment of the Securities and Futures Ordinance, which came into effect in April 2003, marked the end of a decade-long effort to consolidate 10 ordinances regulating the securities and futures markets in Hong Kong. While it is primarily a consolidating ordinance to regulate financial intermediaries and facilitate Internet trading, there are new provisions in the Ordinance that are likely to have significant implications for corporate governance in Hong Kong. This article analyses those provisions and concludes that while the Ordinance is a major positive development from the corporate governance perspective, there remain a number of unresolved issues, such as the status of the Listing Rules, and the independence of auditors, that still require urgent reforms.published_or_final_versio

The Expropriation Game: Minority Shareholders' Protection

Many Hong Kong companies, including listed companies, are controlled by a small group of shareholders with family ties. The inadequacy of the law has made it possible for controlling shareholders to expropriate corporate assets by using complex corporate structures to the detriment of minority shareholders. This article analyses the inadequacy of the law on the appointment of directors, self-dealing and shareholder legal remedies, and the current proposals for legislative reform. Drawing on the experience of some Western European countries where dominant shareholding is also a strong feature, it argues that such problems can be overcome by having a system of law and regulation which provides adequate shareholder protection and effective enforcement of such law.published_or_final_versio

The Role of Hong Kong's Financial Regulations in Improving Corporate Governance Standards in China: Lessons from the Panama Papers for Hong Kong

Hong Kong contributes to poor corporate governance on the Mainland. Could regulatory reform in Hong Kong help improve corporate governance standards/practices (and thus firm value) on the Mainland? In this paper, we discuss ways to incentivize Mainland firms to improve their corporate governance by adopting numerous market-value increasing reforms in Hong Kong. These include the limited extra-territorial application of corporate governance provisions, changes to the Listing Rules to ‘contract’ for better corporate governance, and incentives to collect better corporate governance data. Other reforms include increasing financial transparency (particularly about corporate ownership and control), reducing financial firms’ incentives to trade in shell corporations, regulating relationships with tax havens, and encouraging the redrafting of China’s 2002 Code of Corporate Governance. We provide 31 recommendations and estimate that these recommendations can increase market values on the Mainland by 7% (or in value of roughly $330 billion), while improving the value-added of Hong Kong’s own incorporation/corporate services companies.postprin

Building blocks for reforms on key issues in corporate governance: the case of Hong Kong

Session 6: no. 2011/SOM1/EC/WKSP1/017postprin

What Do the Panama Papers Teach Us About the Administrative Law of Corporate Governance Reform in Hong Kong?

A complex business environment calls for a flexible administrative law for the agencies that oversee corporations. No where illustrates this maxim better than Hong Kong, and its need to reform corporate regulations after the Panama Papers revelations. We describe how only a ‘non-administrative’ administrative law can best cope with the challenges facing the regulation of corporate governance. Such a flexible, results-oriented approach to administrative law develops new principles and tests, rather than gives civil servants instructions. Such an approach to corporate governance can facilitate the assessment of company governance, corporate disclosure, the self-regulation of professional groups like lawyers and accountants, as well as ensure corporations engage in ‘legitimate economic purposes.’ We engage with the literature, showing why such a flexible approach to administrative rulemaking would more likely reduce some of the government regulation and oversight problems exposed by the Panama Papers than previous approaches toward drafting and implementing administrative law (at least in this area).postprin

Hard Corporate Governance Law in a Soft Law Jurisdiction

China’s fuzzy corporate governance rules (whether hard or soft) do not help company managers, government officials and others coordinate and cooperate – the raison d’etre for corporate governance rules. In a corporate system dominated by personal relationships and rules, clarity and specificity – even in principles-based corporate governance – serve Chinese corporations far better than passing rules into law or visa versa. We show how existing rules (whether soft, lard, mandatory, voluntary, etc.) harm corporate interests. We illustrate how adding clarity makes the hard/soft law distinction moot. “Coordinatable” rules which help new Chinese participants in corporate governance understand government expectations, follow these understandings, and seek recourse through existing mechanisms, will serve Chinese companies better than best practice or rules of thumb like having a certain proportion of independent directors, internal auditors, etc.postprin

The Value of the Corporate Governance Canon on Chinese Companies

China has yet to import the corporate governance “canon” (generally accepted rules as promoting share holder value as well as minority shareholder and other stakeholders’ rights) into its Code of Corporate Governance. What effect would Chinese companies’ simply adopting such a canon – as defined by Hong Kong or other foreign corporate governance practices -- have on their share prices? We look at Mainland Chinese companies listed in Hong Kong, looking at the way their share prices react to economic fluctuations when they have better or worse corporate governance practices. Using a differences-of-differences methodology, that such share prices could/would increase by around 7% -- increasing profits by about $330 billion. Yet, a significant part of the distribution of these companies loose money in the short-run. These results provide yet another confirmation that adopting the corporate governance canon can profit companies’ investors, but not all of them.postprin

Glycosylation characterization of therapeutic mAbs by top- and middle-down mass spectrometry

A reference monoclonal antibody IgG1 and a fusion IgG protein were analyzed by top- and middle-down mass spectrometry with multiple fragmentation techniques including electron transfer dissociation (ETD) and matrix-assisted laser desorption ionization in-source decay (MALDI-ISD) to investigate heterogeneity of glycosylated protein species. Specifically, glycan structure, sites, relative abundance levels, and termini structural conformation were investigated by use of Fourier transform ion cyclotron resonance (FT-ICR) or high performance liquid chromatography electrospray ionization (HPLC-ESI) linked to an Orbitrap. Incorporating a limited enzymatic digestion by immunoglobulin G-degrading enzyme Streptococcus pyogenes (IdeS) with MALDI-ISD analysis extended sequence coverage of the internal region of the proteins without pre-fractionation. The data in this article is associated with the research article published in Journal of Proteomics (Tran et al., 2015)

Structural and Functional Analysis of Phytotoxin Toxoflavin-Degrading Enzyme

Pathogenic bacteria synthesize and secrete toxic low molecular weight compounds as virulence factors. These microbial toxins play essential roles in the pathogenicity of bacteria in various hosts, and are emerging as targets for antivirulence strategies. Toxoflavin, a phytotoxin produced by Burkholderia glumae BGR1, has been known to be the key factor in rice grain rot and wilt in many field crops. Recently, toxoflavin-degrading enzyme (TxDE) was identified from Paenibacillus polymyxa JH2, thereby providing a possible antivirulence strategy for toxoflavin-mediated plant diseases. Here, we report the crystal structure of TxDE in the substrate-free form and in complex with toxoflavin, along with the results of a functional analysis. The overall structure of TxDE is similar to those of the vicinal oxygen chelate superfamily of metalloenzymes, despite the lack of apparent sequence identity. The active site is located at the end of the hydrophobic channel, 9 Å in length, and contains a Mn(II) ion interacting with one histidine residue, two glutamate residues, and three water molecules in an octahedral coordination. In the complex, toxoflavin binds in the hydrophobic active site, specifically the Mn(II)-coordination shell by replacing a ligating water molecule. A functional analysis indicated that TxDE catalyzes the degradation of toxoflavin in a manner dependent on oxygen, Mn(II), and the reducing agent dithiothreitol. These results provide the structural features of TxDE and the early events in catalysis