HONG Kong Exchanges and Clearing (HKEX) is set to name Carlson Tong its new chairman, sources with direct knowledge of the matter said, the most senior management change at the bourse damaged by geopolitical tensions and China’s faltering economy.

The 69-year-old Tong, who is HKEX’s non-executive director, has emerged as the frontrunner to take over from current chair Laura Cha, two sources said.

They declined to be named, saying that the discussions were confidential.

The HKEX board will elect a chairman from among its members after the company’s annual general meeting in April, and the appointment of the chairman is subject to the written approval of Hong Kong’s chief executive, or leader.

The change is the latest to the leadership of the Hong Kong exchange operator.

On Mar 1, Bonnie Chan, who was head of the listing division, took over as chief executive from former JPMorgan banker Nicolas Aguzin.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

HKEX declined to comment on when asked whether Tong was the leading candidate for chairman. Tong did not immediately respond to a Reuters request for comment.

The new leadership will have its work cut out for it.

HKEX, whose profit lagged forecasts in 2023, has in the past benefited from big Chinese companies raising capital in the Asian financial hub, but the company has suffered since late 2020 from Beijing’s crackdown on a broad range of industries, which has hit investor confidence.

The city’s economy expanded by just 3.2 per cent in 2023, and capital flight turned the Hong Kong stock market into the worst-performing major bourse last year. India has now overtaken Hong Kong in terms of the value of listed shares.

Tong will be tasked with working alongside Chan in devising a plan to cope the challenges ahead, the sources said.

Tong, who chairs an independent commission on remuneration for members of Hong Kong’s Executive Council and Legislature, previously served as chairman of the city’s Securities and Futures Commission from 2012 to 2018, after more than two decades at consultancy KPMG.

Joseph Yam, another Hong Kong legislator and former head of the central bank was among the candidates considered for the chairperson role, the two sources said.

Yam could not be reached immediately for comment.

Ahead of electing the new chairperson, the exchange has reshuffled the management structure to give CEO Chan direct supervision over key divisions, one of the two sources said.

This includes having the Mainland Business Department directly reporting into the chief executive instead of the chief operating officer, according to an organisational chart seen by Reuters.

Newly appointed deputy chief executive Wilfred Yiu has taken up the role of joint chief operating officer, overseeing IT, alongside Vanessa Lau, who is also joint COO in addition to her role as group chief financial officer.

Yiu was also appointed as co-head of markets, alongside Glenda So, who reports into him.

Asked about the management changes, a HKEX spokesman confirmed the role changes and said they took effect from Mar 1.

“The new structure will enable greater collaboration, focus and alignment to help the Group achieves its strategic goals,” the spokesman said in a statement sent to Reuters. REUTERS