Whether the government should have voted in yesterday's election of two board directors of the Hong Kong Exchanges and Clearing (HKEx) was heavily debated.

Four candidates were vying for two board seats at the city's bourse operator, in which the government has a 5.88 percent stake.

But whether the government voted was unknown yesterday. The naming of the two new directors will be done today at the HKEx's annual general meeting.

"As a stakeholder, the government should vote. It's a responsibility and a right," said Vincent Lee, an incumbent director running for a re-election.

Lee and Bill Kwok were the two incumbent directors running for re-elections. They faced off against Robert Bunker, director of the Hong Kong Securities Institute, and Gilbert Chu, former executive director of Sun Hung Kai Securities.

David Webb, who recommended shareholders vote in favor of Bunker and Kwok, opposed the government's voting in the election.

"Six directors and the chief executive are designated by the government," he said, adding that the independent shareholders should vote.

The HKEx board consists of 13 directors, six of whom can be elected by shareholders.

As the largest single shareholder of the bourse, the government's vote would be crucial to the results. However, a scholar said the government may have decided not to exercise its voting right.

"To avoid criticism from the public, I'm guessing the government will not vote in the election," said Raymond So, a finance professor at the Chinese University of Hong Kong.

Another reason the government may forego voting is that it doesn't want to make clear its favor toward either locally based brokers or foreign funds, So said.

"There are two parties amid the four candidates," he explained. "One represents local brokers, and the other is backed by foreign-fund shareholders."

He noted that the status of local brokers will be threatened if the foreign-funds-supported candidates win the seats.

(HK Edition 04/24/2008 page2)