As hot money pouring in and out of the Macao-related stocks, it roller coasted some companies' share prices, and by the same time, raised great concerns of the market's watch dog.

As usual, when there are signs of unusual market volatility, or complaints filed, the Hong Kong Securities and Futures commission (SFC) would keep a close eye on relevant issues.

Just as Frederick Ma, Hong Kong secretary for financial services and the treasury, said Hong Kong has to gain vote of confidence from investors and other financial market participants to reinforce Hong Kong's position as a major international financial center.

He said poor corporate governance weakens a company's potential and at worst would pave the way for financial difficulties and even fraud, which will shaken investors' confidence and weaken the function of an financial city.

Earlier this month, Lee Ming-tee, who controlled 10 listed companies with a market value over 7 billion HK dollars (900 million US dollars) at the 1980s, was sentenced to one year in jail for falsifying accounts in the early 1990s.

Lee, the 64-year-old former chairman of the Allied Group, committed the offenses between 1990 and 1992 relating to the salesof shares in the Allied Group and affiliated companies. A government-commissioned report released in 1993 said that the share dealings in question had been disguised.

Although Lee used to have a good reputation except this stain and such case was really time consuming and exhausting, Hong Kong's regulatory body would not even to step back an inch in the 12-year legal drama.

Observers say the recent investigation efforts made by Hong Kong SFC to ensure that no market participants were involved in misleading or inappropriate activities, again demonstrates Hong Kong's resolution to keep the market fair and open, companies appropriately governed.

Besides the Cooperate Governance Action Plan which has been in operation since January 2003, Hong Kong has made many corporate governance initiatives to introduce rules, regulations and codes of practice to set the expected minimum stand of corporate governance practices.

Andrew Sheng, chairman of Hong Kong SFC, said good corporate governance plays a vital role in underpinning the integrity and efficiency of financial market.

Since April this year, the SFC initiated six new investigations into listed companies. And its new investigations nearly doubled from six in 2002 to 2003 to 10 in 2003 to 2004.

However, Sheng said good corporate governance is a means towardan end -- a better managed company, and not an end in itself.

According to him, as an international financial center, Hong Kong needs much more than codes itself. "All the rules and regulations in the world will not improve corporate governance unless the corporate leaders believe and are committed to practice good corporate governance," he said.

Source: Xinhua