Hong Kong's Financial Reporting Council (FRC) has welcomed the governments plans to strengthen auditor oversight in Hong Kong.

The Financial Reporting Council (Amendment) Bill 2018, will be introduced into the Legislative Council of Hong Kong for its first reading next week (24th January). Under the proposed amendments, the FRC will become Hong Kong’s independent auditor regulator, vested with direct powers of inspection, investigation, as well as discipline concerning auditors of listed entities.

The FRC will also be overseeing the performance of the Hong Kong Institute of Certified Public Accountants of their functions in relation to auditors of listed entities including registration; standards in professional ethics, auditing and assurance; and continuing professional development requirements.

Dr John Poon, chairman of the FRC, said, “The introduction of this legislation is in the best interest of the investing public. This much-awaited reform for auditors of publicly listed entities, i.e. from self-regulation to independent oversight, will bring Hong Kong’s auditor regulatory regime in line with other major capital markets worldwide, such as New York and London. It will further entrench Hong Kong's status and reputation as a robust international financial centre.”

UK's Serious Fraud Office begins Chemring bribery and corruption Investigation

The Serious Fraud Office has opened a criminal investigation into bribery, corruption and money laundering within Chemring Technology Solutions, a subsidiary of defence company Chemring.

The company said that the investigation followed a voluntary report made by Chemring Technology Solutions which related to two historic contracts, the first of which was awarded prior to Chemring’s ownership of the business concerned and the second in 2011. Neither contracts are considered material in the context of the company, Chemring said.

Ukraine adopts law to further improve joint stock company governance

Ukraine has adopted a law which changes its approach to defining a public joint stock company (JSC), reforms the issue of the securities process, introduces new requirements to the scope and methods of issuer disclosure, and improves corporate governance in joint stock companies, according to Ukrainian law firm, Sayenko Kharenko.

In a legal update, the law firm wrote that the legislation expanded the criteria for independent directors and allowed for the establishment of additional criteria for independence in company charters or by-laws. In public JSCs and banks, independent directors must comprise at least one-third of supervisory board members, and, in any case, there should not be fewer than two independent directors in a public JSC and not fewer than three in banks.

Additional reforms were enhanced transparency standards for JSC and bank supervisory boards; the requirement for supervisory boards to submit performance reports and strengthened regulation of the activity of the principal committees of the supervisory board.

This latest development forms part of Ukrainian government efforts to align its laws more closely with that of the EU and to become a more attractive market for investors as previously reported by Manifest.