Hong Kong Crash Stirs Up Debate About Exchange
HONG KONG -- With bad checks flying in the wake of Hong Kong's stock market collapse, a group of brokers held an emergency meeting Tuesday with government and stock exchange officials.</br></br>Sources say that at the meeting, which took place in Monetary Affairs Secretary David Nendick's office, the government official asked if the exchange had complied with his request to identify brokers who had issued bad checks. To his surprise, Jeffrey Sun, the exchange's chief executive, said the action hadn't been taken.</br></br>As Mr. Sun started to explain, Mr. Nendick interrupted him and said: "I think I'm hearing something I don't want to hear."</br></br>The exchange's inaction -- and Mr. Nendick's exasperation -- sum up the crisis of confidence gripping Hong Kong's stock market. That crisis erupted Oct. 19 when local prices fell in line with the global market plunge. The other markets took a beating and kept on trading. But in Hong Kong, the collapse has set off an escalating controversy over the stock exchange's powerful -- but seemingly arbitrary -- management committee and the government's lame attempts so far to rein it in.</br></br>The debate began with the market's four-day closing last week, ordered in part, the committee said, to calm the public. That backfired Monday when the market reopened to suffer its worst one-day plunge. Nor has investor confidence been helped by revelations Tuesday that a brokerage controlled by Ronald Li, chairman of the committee and stock exchange, faces problems from trading in Hong Kong's shaky futures market.