Australia’s corporate governance regulators are well placed to assist the growing number of companies throughout China and the Asia-Pacific region which are choosing to take their businesses to the public markets, according to Ian Johnston, deputy chief executive of the Dubai Financial Services Authority (DFSA).
The economies of the Asia-Pacific and the Middle East tend to be ‘over-saved and under-invested’ presenting an opportunity for a developed Australian financial services market to step in and offer guidance, Johnston said in his presentation during the opening session of the annual Chartered Secretaries Association (CSA) conference in Sydney yesterday. “Wealth tends to be concentrated in government institutions and in some private institutions; so we have huge family companies with money locked up there that’s not really getting into the capital markets,” observed Johnston.
In China, Hong Kong, and the Middle East there is movement by those companies to get their funds into the capital markets, but many do not like the perceived loss of power which accompanies a switch to capital markets, meaning there are corporate governance issues for those who do. “Companies that were private go public and continue to behave in a way that’s private. Many are reluctant to give up the keys. They can go and seek money in the public markets but they do not like the transfer of power,” said Johnston. According to him there is a significant amount of wealth in China, Asia and the Middle East which needs to be opened up, but corporate governance remains a critical issue in how those companies are run. “Australia can do more, I think, to help develop corporate governance in this part of the world generally,” he added.
The CSA annual conference is ongoing throughout today and tomorrow, concluding tomorrow evening, 7 December.
