More Hong Kong Firms Fear State Lawsuits, Survey Finds
Listed companies in Hong Kong worry more about facing lawsuits from government regulators and institutional investors than from small investors and customers, according to a survey on corporate governance.
The results reflect a growing awareness here of the demand for greater transparency by international investors, such as fund managers, insurance companies, buyout funds and hedge funds, many of which have invested in Hong Kong in hope of capitalizing on China's strong growth.
The survey polled 270 companies ranging from retailers with less than US$3 million in market capitalization to conglomerates, banks and property companies with more than US$200 million in market capitalization. Insurance broker Jardine Lloyd Thompson Ltd. and Policy 21, the policy-research arm of the University of Hong Kong, interviewed companies for the survey between June and early this month.
Just as U.S. companies became more concerned about the role of the securities regulator in the wake of the Enron Corp. and WorldCom Inc. accounting scandals, Hong Kong companies are expecting the city's stock-market authority to play a larger role in monitoring behavior. About 47% of respondents said they expect the government to be a potential claimant in corporate-governance enforcement actions or lawsuits, while 39% cited institutional investors.
Unlike listed companies in the U.S., those in Hong Kong seem to feel they have little to fear from small shareholders. In the survey, 31% of respondents said small and minority shareholders are likely to be claimants, and 27% thought customers might take action against them. The low percentages partly might be explained by Hong Kong's legal framework, which doesn't allow class-action lawsuits.
"There isn't a litigation risk until people can go to court en masse," said David Webb, a Hong Kong shareholder activist. Observers also note that suing companies or directors can be costly in Hong Kong because courts require defeated parties to pay legal expenses.
Shareholders have so-called derivatives-action rights, which enable them to sue other shareholders or directors on behalf of the company if they think it is being abused. However, shareholders still must pay costs for bringing such cases, and reward money goes to the company, not directly to the shareholders launching such a suit.
While Hong Kong hasn't had a wave of shareholder suits or other corporate-governance actions, there is more scope to have them now than in the past. In March 2002, the government passed a bill that gave the Hong Kong Securities and Futures Commission, the securities-industry regulator, greater power to place criminal charges in cases of suspected insider trading and other market manipulation. Between April 1, 2002, and March 31 this year, the commission prosecuted eight people for market manipulation.
Many executives expect more legal action. "Hong Kong has had its boom years," when directors and officers feared little but falling share prices, said Ali Chaudhry, director of the financial and professional risk division at Jardine Lloyd Thompson. "Now the economy is maturing and becoming more cyclical. In downward cycles, people will see more litigation," he said.
But so far, many companies are confident they won't be sued, according to the survey. About 42% said they don't have liability insurance for directors and officers, which protects companies and executives from losses stemming from legal actions against them. This insurance doesn't cover losses in cases where companies have broken the law, such as sanctions or enforcement actions brought by government regulators. In the U.S., 97% of surveyed companies buy directors' liability insurance, Jardine Lloyd Thompson said.
"Many companies don't fully appreciate the liabilities of being a director, so they don't think they need insurance, or they simply don't know about it," said Jamie Allen, head of the Asian Corporate Governance Association in Hong Kong.
Hong Kong's increasing integration with China raises more corporate-governance concerns. At least 92% of the surveyed companies believe their levels of corporate governance surpass those of their Chinese counterparts. "Many Hong Kong companies have the bulk of their operations on the mainland, where they have much greater governance risk because of the location of their incorporation," Mr. Allen said.
港证监会让上市公司提心吊胆
一项有关公司治理的调查结果显示，香港上市公司担心政府监管机构和机构投资者对其提起诉讼，而对小股东和客户提起的诉讼则不太在意。
这样的结果反映出上市公司日渐认识到基金经理人、保险公司、收购基金和对冲基金等很多国际投资者对提高公司透明度的需要。为了赶上中国经济增长的快车，有很多国际投资者都在香港进行投资。
接受调查的270家公司中，有市值不超过300万美元的零售商，也有市值超过2亿美元的企业集团、银行和房地产公司。保险经纪商怡和保险顾问(Jardine Lloyd Thompson)与香港大学(University of Hong Kong)的政策研究机构Policy 21在6月至9月初这段时间内对上述企业进行了调查。
在安然(Enron Corp.)和WorldCom Inc.丑闻曝光后，美国公司开始担心证券监管机构是否真正发挥了应有的作用。因此，香港公司预计香港证券监管机构会加大监管力度。调查中有大约47%的公司估计政府可能成为公司治理强制执行工作或诉讼中的原告，有39%的公司认为机构投资者是可能的原告。
与美国上市公司不同，香港公司似乎并不担心被小股东起诉。有31%的受访企业认为小股东或少数股权所有者不大可能成为原告，有27%的企业认为他们可能会遭到客户的起诉。这一结果的原因可能是香港现行法律规定还不允许集体诉讼。
香港股东权益活动家David Webb说，在人们可以进行集体诉讼前，公司所面对的来自小股东的诉讼风险就很小。观察人士也指出，起诉公司或公司董事的成本可能很高，因为香港法庭要求由败诉方支付诉讼费用。
股东可以进行衍生诉讼，即他们可以代表公司起诉其他股东或董事。但他们必须为此付出一定费用，如果最后获得法院判定的赔偿，也是归公司所有，而并不直接赔偿给提起诉讼的股东。
香港以前还没有出现过大量股东诉讼或公司治理方面的官司，但现在发生这类的诉讼的可能性要比以前大。港府曾于2002年3月通过一项法案，给予证券监管机构香港证券及期货事务监察委员会 (Hong Kong Securities and Futures Commission, 简称：香港证监会)更大的权力，使之可以在发现可疑的内部交易或其他操纵市场的行为时提起刑事诉讼。在2002年4月至2003年3月31日期间，香港就以操纵市场为由向8人提起诉讼。
很多公司管理人士预计未来还有有很多的法律官司。当香港处于繁荣期的时候，公司董事和管理人员除了担心股价下跌之外什么都不怕，怡和保险顾问旗下财务及从业风险部门主管Ali Chaudhry说。但现在香港经济日趋成熟，开始更多地遵循周期规律，这时就会发生更多的诉讼案件，他说。
不过据调查结果显示，到目前为止，很多公司还是自信地认为不会遭到起诉。接受调查的公司中，大约42%都没有董事或管理人士意外责任险，这个险种可以使公司及其管理人士不必因遭到外界起诉而遭受损失。但如果公司的确违反法律，遭到制裁或是政府监管机构的强制执行，那就不在这个险种的保障范围内了。怡和保险顾问称，在美国，接受调查的公司中有97%都购买这种责任险。
“很多公司对董事的责任没有充分的认识，所以觉得购买这种保险没有必要，有的甚至根本不知道有这种保险”，亚洲公司治理协会(Asian Corporate Governance Association)秘书长杰米?阿伦(Jamie Allen)说。
随著香港日益融入中国，人们对公司治理问题的担忧加深。至少有92%的受访公司认为他们的公司治理水平高于内地同类企业。“很多香港公司在大陆经营很多业务，这就增加了他们的治理风险”，阿伦说。
