HK Mercantile Exchange in regulator probe

 
City A.M. Reporter
A CLOSE political ally of Hong Kong’s chief executive has vowed to cooperate with an investigation into the shuttered Hong Kong Mercantile Exchange after the city’s financial watchdog said it had alerted the police to “serious irregularities”.

Exchange chairman Barry Cheung has also taken leave of absence from several high-profile public positions as police look into the futures platform. He has not been directly named as part of the probe.

The exchange, which operated a trading platform for gold and silver futures and had plans to launch contracts for base metals and yuan forwards, surrendered its licence to the SFC over the weekend saying it did not have enough trading revenues to support its expenses.

Cheung said in a statement: “The favourable conditions under which HKMEx was founded have not changed.”

The involvement of Cheung threatens to add more pressure on Hong Kong’s leader Leung Chun-ying, with whom he has close links. Since taking office last July, Leung has faced several scandals, protests and a failed impeachment bid.

“Given the police investigation, it is not appropriate for me to comment,” Leung said yesterday.