Hong Kong Exchanges And Clearing Ltd. Announces 2009 Annual Results...The flag of the Hong Kong Exchanges & Clearing Ltd., left, the Chinese flag, center, and the Hong Kong SAR flag, fly outside Hong Kong Exchanges & Clearing Ltd., in Hong Kong, China, on Thursday, March 4, 2010. Hong Kong Exchanges & Clearing Ltd., the operator of Asia's third-biggest stock market, posted an 8 percent drop in profit last year, in line with analyst estimates, as trading decreased amid a global slump. Photographer: Jerome Favre/Bloomberg
The flag of the Hong Kong Exchanges and Clearing, left, the Chinese flag and the Hong Kong flag, at the Hong Kong Exchanges and Clearing in Hong Kong © Bloomberg

A finance director threw an analyst out of a company results presentation in Hong Kong because he disagreed with the analyst’s negative views, in a rare example of a company lashing out personally and publicly against its critics.

Chris Lee, the chief financial officer of Pax Global, a maker of electronic payment terminals for retailers, asked Timothy Lam, an equity analyst at Macquarie, to leave before the meeting started.

Mr Lam, who eventually complied, is one of only two analysts of the 19 tracked by Bloomberg to have a negative rating on the company. The other, Leping Huang of Nomura, downgraded his view from “neutral” to “reduce” only after the incident — which observers say also highlights broader transparency issues.

“While we do not judge this dispute, we think this may hurt Pax Global’s shareholder value,” Mr Huang told clients in a note on Thursday.

In a video shared on social media, Mr Lee is seen saying: “I didn’t invite you. Out! You don’t have the right to stay here.”

Mr Lam’s responses are inaudible. Mr Lee then replies, while taking the seated Mr Lam by the arm: “No, no, no, you are not, we didn’t send out anything, escort him out! That’s your umbrella, take it, go . . .”

Shares in the company, which has a market capitalisation of about $975m, were 4 per cent lower at their weakest point, but closed 2.1 per cent lower at HK$6.64. Trading volumes were triple its average level.

In a statement sent to the Financial Times, Mr Lee expressed regrets over his behaviour at Wednesday’s briefing and said he was “not against anyone or any institution that expresses their view.”

He added: “It is not unacceptable taking a bearish view on us, however . . . analysts as high calibre professionals should be responsible for what they express in any professional publication.”

The scene caused a stir, even though local analysts and bankers are used to companies with a tendency to be less than forthcoming.

“If this were in Korea or Taiwan I wouldn’t be surprised. In Hong Kong, however, everyone sees these meetings as open season so if a company didn’t want the discussion or had something to hide, they usually just wouldn’t hold one,” said Keith Pogson, head of Asia financial services at EY and a member of the city’s Listing Committee, which approves all new entrants to the stock market.

Bankers admit they know of cases where their clients have excluded analysts by not inviting them, or made their annoyance clear in conference calls. But those contacted by the FT could not recall any examples where those present were actually ordered from the room.

The skirmish comes as lawmakers and others have been voicing concerns about wider issues of free speech in the Chinese territory.

“In theory he [Mr Lam] could have done a Long Hair and just stuck it out,” said one market expert, referring to the radical Hong Kong opposition lawmaker known for his unkempt hair and history of protest.

Mr Lam said in a client note on Thursday: “We believe all analysts should be able to attend analyst briefings, regardless of their view on the company.”

All analysts covering the stock rated the company a “buy” this time last year, according to Bloomberg, but questions have arisen in the past year over the outlook for its mainland business amid tightening regulation.

Paul Snelgrove, an analyst at CIMB in Hong Kong, said: “There are always corporate governance risks with smaller companies and high-growth companies that have come from nowhere.”

He added that while he likes Pax Global’s business model, the incident with the Macquarie analyst would add to wider concerns about transparency at a difficult time for the market.

“While we have the Chinese economy growing slowly, people are more and more cautious and sceptical,” he said.

Additional reporting by Chuck Pang in Hong Kong

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