The HKICC will operate as a specialist division of the High Court, adjudicating complex, high-value international and cross-border commercial disputes.

Preparatory work is underway for the launch of the HKICC, which aligns with the National 15th Five-Year Plan and responds to growing demand for mechanisms to address increasingly complex legal and factual issues arising from cross-border commercial activities. Such disputes require specialist judicial expertise, as well as court procedures and practices.

Located within the High Court Building, the HKICC will offer a comprehensive range of dispute resolution options, with cases to be heard by judges with substantial experience in commercial law.

A dedicated Practice Direction will set out the categories of cases within the HKICC’s jurisdiction, along with detailed procedural rules. These will include measures to streamline the litigation process, introduce a more flexible approach to appeals, and ensure the timely disposal of cases and appeals, drawing on best practices from other international commercial courts.

The HKICC will also leverage technology in its proceedings, including remote hearings, electronic filing, electronic bundles and voice-to-text transcription.

The post Hong Kong to establish International Commercial Court appeared first on ���߲�����.

View the A-List

As Indonesia maintains steady economic growth, local law firms are playing an increasingly critical role in supporting investment, regulatory compliance and large-scale industrial development. Indonesia’s economy grew by 5.11% in 2025, maintaining a growth rate of more than 5% for the fourth consecutive year. The Indonesian government projects that in 2026, economic growth will reach 5.4–5.6%.

The main driver of economic growth is the manufacturing sector, accounting for 19% of GDP. The success of manufacturing has created significant demand for legal services, with Indonesian law firms assisting companies with inbound investment and market entry, licensing compliance and complex supply-chain contracts.

As Indonesia searches for new engines of economic growth, this important role of local law firms is expected to increase.

At the centre of this plan is Danantara, the country’s second sovereign wealth fund established in February 2025.

Danantara recently launched six natural-resource processing projects worth about USD7 billion as part of the government’s plan to capture more value from domestic resources.

Indonesian law firms will play a crucial role in structuring these investments, negotiating joint ventures with foreign partners, and ensuring compliance with corporate and investment regulations. They are also essential in handling engineering, procurement and construction agreements, as well as long-term supply contracts for raw materials.

Amid escalating global uncertainty in 2026 – exacerbated by heightened instability in the Middle East on top of ongoing US trade sanctions and embargoes – Indonesia is one of the few emerging economies maintaining stable growth of around 5%.

As the country seeks to solidify its position as Asean’s strategic hub for resource-based manufacturing and processing through investment in natural resources, local law firms are expected to play a critical role as trusted partners, essential for capturing opportunities amid the uncertainty.

Against this backdrop, Asia Business Law Journal proudly presents its A-List of Indonesia’s top 100 lawyers and 41 legal icons, recognising the legal experts helping shape the country’s next stage of growth.

Women leaders

More than 70 years since Ani Abbas Manopo became the first Indonesian woman to earn a law degree, her successors continue to exert significant influence in the nation’s legal landscape, securing recognition on this year’s A-List.

Almaida Askandar, partner and co-founder at IABF Law Group, is applauded by Edrick Leonard, finance and accounting head at Sun Motor Group in Jakarta, for her “principal leadership and the strong strategic foundation she brings to the firm”.

“Almaida’s leadership creates an environment where complex matters are handled with structure and accountability,” he says. “Her role ensures alignment across partners and teams, maintaining high standards while supporting practical, business-oriented legal solutions.”

Having worked closely with Fransisca SH, partner and head of banking and finance at Makes & Partners in Jakarta, during the past two years, Glynnis Theresa Acosta, group general counsel at Protelindo in Jakarta, tells ABLJ: “She has consistently provided exceptional support to both me and our company across numerous complex transactions.”

Acosta especially remembers that in two particularly memorable transactions that ultimately did not close “Fransisca demonstrated the same level of enthusiasm, commitment and drive as she does on deals that reach completion, making me feel that she was as invested in the deal as her client. “It’s difficult to imagine what more one could reasonably ask for in an external adviser,” she adds

Top counsel for high-value listings

In 2025, the Indonesian IPO market recorded a decrease in the total number of listings, though this was offset by an increase in average deal sizes. This trend reflects a market shift towards higher quality, high-value offerings, which has consequently driven greater demand for sophisticated legal counsel.

Pingkan Ratna Melati, senior vice president counsel and corporate secretary at TBS Energi Utama in Jakarta, has had “extensive first-hand experience” working with Genio Atyanto, managing partner at boutique firm Genio Atyanto & Partners, particularly on capital market-related corporate actions and regulatory advisory.

She says, “Genio has been highly reliable in advising on a wide range of capital market matters, including corporate actions, regulatory interpretations, disclosure considerations and engagement with regulators.

“Based on my experience, I confidently recommend Genio for recognition as a trusted and capable adviser in capital market corporate actions.”

Sheni Adriana Sapija, a legal counsel manager at Ceria Prima Investama in Jakarta, agrees with Melati. “His contribution has significantly enhanced our ability to execute critical transactions and navigate sensitive government engagement in Indonesia,” says Sapija.

GHP Law Firm partner Lavie Daramarezkya is “a go-to adviser for capital markets and related transactions within Indonesia’s F&B and hospitality industries”, according to Lewi Aga Basoeki, corporate secretary at Siloam International Hospitals in Tangerang.

“She adeptly guides clients through the intricacies of the local legal and regulatory framework, with particular strength in orchestrating thorough due diligence processes, ensuring full compliance, and facilitating critical regulatory liaisons,” says Basoeki.

Daramarezkya is also praised by Mohamad Iqbal Saleh, head of talent and performance management at AIA Indonesia in Jakarta.

“A natural hustler with a strong entrepreneurial mindset, she combines adaptability with execution,” says Saleh. “Supported by an extensive professional network across the legal, financial and business sectors, she consistently delivers strategic value to clients.”

Seamless collaboration

As Indonesia’s influence within the global and regional economic landscape expands, demand is rising among corporations for legal counsel with specialised expertise in cross-border transactions.

Hairong Li, partner at Zhong Lun Law Firm in Beijing, has worked with Yohanes Masengi, managing partner at Corra Legal, during the past several years on cross-border M&A transactions.

“Masengi stands out as an exceptional legal professional,” says Li. “He managed the process with great efficiency and professionalism, making the collaboration seamless. Without hesitation, I recommend Masengi to any client seeking top-tier legal counsel.”

Noverina Swasty, head of legal and corporate secretary at Tripatra Engineers and Constructors in South Tangerang, also praises Masengi. “We value Masengi’s reliability, responsiveness and strong command of Indonesia-focused regulatory and commercial considerations, combined with his ability to translate complex issues into clear, decision-ready guidance for business stakeholders.”

For South Korea-related legal matters in Indonesia, Inseo Lee, a partner at Yoon & Yang in Seoul, respects Turangga Harlin, managing partner at MHMS Advocates, for his “strong understanding of both Indonesian law and Korean business practices”.

Lee says, “He has substantial experience collaborating with Korean law firms, in-house legal teams and business executives, making him a reliable partner for cross-border transactions and ongoing legal support.

“For Korean companies and individuals seeking trustworthy legal counsel in Indonesia, especially for matters involving Korean interests, Harlin is a highly capable and dependable choice.”

According to an anonymous Japanese senior in-house counsel, his/her company was “almost on the edge of giving up on looking for a professional lawyer within our budget” before finding RBP Asia partner R Bayu Perdana and his team “very helpful”. The Japanese client adds: “The amount of effort and support during the whole process by focusing on getting the deal based on Indonesian law fairly was amazing; it was another level of professionalism.”

Yibo Chen, a senior counsel at Guozun Cathay Associates in Beijing, also speaks highly of Perdana. “He tracks legal and policy updates closely, demonstrating rigorous analysis and strategic thinking in complex transactions, compliance and emerging industry issues, earning trust from domestic and international clients.”

Specialist edge

Finally, specialised sector expertise remains a primary driver for inclusion in this year’s A-List, with several practitioners earning recognition for their deep industry knowledge. ADCO Law partner Dendi Adisuryo in Jakarta is highly regarded by Daniel Siahaan, legal division head at Pamapersada Nusantara, who says: “Over the past year, he has played a central role in supporting our company through four separate due diligence processes in connection with the potential acquisition of strategically important companies in the mineral sector.

“His advice has allowed us to obtain key environmental and operational approvals necessary for us keep to our operations in full compliance and prevent enforcement sanctions.”

Dhika Ashita Haruni, head of legal and commercial, Asia, at Thiess Contractors Indonesia in Jakarta, also notes Adisuryo’s legal expertise, “specifically in mining law”.

“His law firm is widely respected for its client-focused approach, depth of legal knowledge and ability to handle complex matters with clarity and precision,” says Haruni.

In the labour and employment sector, Wina Aesthetica, senior legal counsel at Honest Financial Technologies in Jakarta, worked with Ichsan Perwira Kurniagung, founding partner at FKNK Law Firm in Jakarta, over time-sensitive legal matters.

“As the lead partner on both matters, Ichsan provided clear oversight of his team and took ownership of the team’s involvement in the process from strategy through execution,” says Aesthetica. “Despite very tight timelines, he and his team were consistently proactive, co-ordinated and responsive, enabling both matters to be concluded efficiently and without residual issues.

“I recommend him as a top lawyer who combines strong technical competence with a practical, client-focused approach.”

The post The A-List: Indonesia’s top lawyers appeared first on ���߲�����.

Paul Chan, Hong Kong’s financial secretary, said in a press release: “The issuance of infrastructure bonds by the HKSAR government raises capital for key infrastructure projects, including the Northern Metropolis, thereby facilitating early project completion for the good of the economy and people’s livelihood. Also, government green bonds support green and low-carbon transformation projects, as well as consolidate Hong Kong’s development as a green and sustainable finance hub.”

The offering comprised five tranches, priced on 7 May and listed on the HKEX and the London Stock Exchange on 14 May. The tranches included: a HKD3 billion 30‑year infrastructure bond with a yield of 3.95%; a RMB6 billion 20‑year infrastructure bond with a 2.6% return; a RMB6 billion 30‑year 2.7% infrastructure bond; a USD500 million five‑year 4.052% infrastructure bond; and a EUR750 million eight‑year green bond with a return of 3.119%.

Among them, the “issuance of RMB bonds will further enrich offshore RMB product offerings, improve the offshore RMB yield curve and promote RMB internationalisation”, Paul Chan said.

Clifford Chance advised the Hong Kong government, with partner Mark Chan leading the transaction team and included counsel Torrance Shi.

The five tranches were issued under the Hong Kong government’s Green Bond Framework and Infrastructure Bond Framework. The proceeds will be credited to the Capital Works Reserve Fund and used to finance or refinance eligible green and infrastructure projects.

The post Clifford Chance assists Hong Kong on HKD27.6bn bond issuance appeared first on ���߲�����.

Cheung brings more than 30 years of practice experience. He served as a partner at Deacons from 2000 to 2024 before transitioning to a consultant role in January 2025. He has extensive experience advising on complex and high-value construction and engineering matters, with work spanning litigations, arbitrations, mediations and general advisory matters across Hong Kong, Macau and the Chinese mainland. He has acted for developers, contractors and subcontractors, representing various stakeholders in the construction sector.

On Chinese mainland matters, Cheung has participated in CIETAC arbitrations in Shenzhen, Shanghai and Beijing. He has also served as an arbitrator and mediator in construction and commercial disputes, and has significant experience in handling cross‑border disputes.

Cheung combines professional expertise in both construction and law. He began his career training as a quantity surveyor before entering the legal profession, qualifying as a solicitor in Hong Kong in 1994, and in England and Wales in 1995. He is currently a fellow of both the Hong Kong Institute of Surveyors and the Royal Institution of Chartered Surveyors.

At Ince, he will jointly lead the firm’s construction practice with managing partner Ian Lo.

Cheung has been recognised multiple times in China Business Law Journal’s A-list of top lawyers.

The Ince Group entered administration in April 2023, while Ince Hong Kong has operated independently since 2018.

The post Ince adds seasoned construction expert in Hong Kong appeared first on ���߲�����.

The firm assisted on the international aspects of the proposed investment, with the team comprising private equity partner Tom Lin, senior associate David Ho and associates Denzyl Ang and Wenkai Lyu.

Partners Matthew Truman, global co-head of leveraged finance, and Charlotte Leung, together with associate Ken Li, were also part of the finance team advising on the transaction.

CVC’s proposed investment follows Singapore-based Pacific Universal Investments’ acquisition of a 51% stake in MAPI for IDR11.8 trillion (USD659 million) in May 2026. The transaction triggered a mandatory tender offer for the remaining shares held by minority shareholders, at an offer price of IDR1,550 per share in accordance with regulations.

CVC and Pacific Universal Investments, which have a relationship stretching back more than a decade, will undertake the mandatory tender offer through two investment vehicles – Samudra (Investment) and Ocean Continuum. Both entities are indirectly owned 51% by Pacific Universal Investments and 49% by funds managed or advised by CVC.

Listed on the Indonesia Stock Exchange, MAPI is one of Indonesia’s largest retail groups, operating department store chains in Indonesia, including SOGO and SEIBU. The company also has operations across Southeast Asia.

The post Clifford Chance drives CVC’s proposed investment in MAPI appeared first on ���߲�����.

The new office in the Chinese capital comes more than a decade after the SIAC established its first presence in the jurisdiction with the launch of its Shanghai office in January 2016.

SIAC CEO Gloria Lim said it was necessary to open another office in China as Chinese parties had been among the top users of the SIAC’s arbitration services.

“China has for many years been one of SIAC’s most important user bases and Chinese parties consistently rank among the top foreign users of SIAC arbitration. We therefore felt it was important for SIAC to have a stronger and more direct presence in China, particularly in Beijing, which is an important centre for policy, commerce, legal development and international engagement,” she told Asia Business Law Journal.

“This office is not simply about physical expansion. It is about deepening engagement with our users and stakeholders in China — including enterprises, practitioners, arbitral institutions, academics and government agencies — and supporting greater dialogue, collaboration, and training in the field of international dispute resolution.”

Lim added that the timing of the expansion aligns with growing demand from Chinese clients.

“As to why now, we believe this is a timely moment because cross-border commerce involving Chinese parties continues to grow in scale and sophistication. At the same time, businesses are increasingly looking for neutral, efficient and internationally trusted dispute resolution mechanisms,” she said.

The SIAC now operates six overseas offices — in Seoul, Mumbai, Gujarat, New York, Shanghai and Beijing. However, Lim remained tight-lipped about the possibility of future expansion in China and other Asia-Pacific jurisdictions.

“Our focus is not simply on increasing the number of offices, but on ensuring that any presence meaningfully supports our users and strengthens our engagement with the local legal and business communities,” she said.

“SIAC has always been responsive to the evolving needs of international commerce and dispute resolution. As cross-border trade and investment continue to grow across the Asia-Pacific and beyond, we will continue to assess opportunities to enhance our connectivity and support for users where appropriate. Any future expansion will therefore be guided by the needs of our users, the development of international commerce, and our commitment to maintaining the high standards of neutrality, professionalism, and efficiency that users expect from SIAC.”

The post SIAC expands presence in China with launch of Beijing office appeared first on ���߲�����.

Dulac joins from King & Spalding, where she spent more than 15 years, including 11 years as a partner.

She specialises in commercial arbitration and investment treaty arbitration across the Asia-Pacific region, with expertise in energy sector disputes. She also has extensive experience in African energy disputes, acting for both Asia-Pacific and European clients.

“Since 2020, our Singapore office has grown more than fivefold, driven by a team of lawyers who share a passion for complex international and cross-border disputes. Elodie is a perfect example of the type of lawyer we seek to attract: an exceptional practitioner with a truly international outlook and deep experience handling sophisticated cross-border matters,” SeungMin Lee, managing partner of Peter & Kim’s Singapore office, told Asia Business Law Journal.

Lee added that the firm plans to continue expanding its Singapore team, given the jurisdiction’s status as a major dispute resolution hub.

“Looking ahead, we remain ambitious about our Singapore presence. We see Singapore not only as the leading dispute resolution hub in Southeast Asia, but also as a strategic gateway connecting Asia, Europe and the Middle East. We will therefore continue to actively seek exceptional talent – whether Singapore-trained lawyers or international practitioners from around the world – who share our commitment to international arbitration and cross-border disputes,” she said.

“Our goal is not simply to grow in size, but to build the most international disputes team in the region, bringing together talented lawyers from different jurisdictions, cultures and legal traditions under one roof.”

The post Peter & Kim adds Singapore partner from King & Spalding appeared first on ���߲�����.

Kim’s comments came during the law firm’s session at the the IHCF annual spring academy at the Josun Palace Seoul Gangnam hotel on 30 May 2026. Around 110 IHCF members attended several sessions covering topics including risk allocation, joint ventures, international arbitration, carve-out M&As and recent developments involving the Korea Fair Trade Commission.

A key highlight of the event was ��Kim’s presentation, titled Board of directors and shareholders’ meeting operations under the amended Korean Commercial Act.

The session examined how in-house legal teams should respond when conflicts of interest arise between controlling and minority shareholders within a company, since South Korea’s recently amended Commercial Act expanded directors’ fiduciary duties to include shareholders.

“Most minority shareholders investing in Korean listed companies are primarily focused on buying shares at low prices and profiting from short-term gains … ��As a result, they tend to be highly sensitive to events that may cause the stock price to decline in the short term,” said Kim.

However, Kim added that from a company’s perspective, management cannot remain fixated solely on short-term share price performance. Instead, leadership must adopt a long-term vision, even when it requires decisions that may appear detrimental to the stock price or corporate earnings in the immediate future.

“This may not be driven by any deliberate intent to undermine the interests of minority shareholders, but it could still present challenges from the perspective of directors’ fiduciary duties to shareholders. How to address such issues will become increasingly important for in-house counsel going forward,” said Kim.

Sponsors of the spring academy included Thomson Reuters Korea, LexisNexis and Intellectual Data, an eDiscovery services provider in South Korea. Several law firm booths, including Holman Fenwick Willan, DLA Piper and White & Case, drew attention from the attending in-house counsel.

The post Korean in-house counsel face compliance challenges: IHCF event appeared first on ���߲�����.

Yet rapid technological iteration is often accompanied by a lag in industry norms and legal regulation.

From the dispute sparked by OpenAI over Scarlett Johansson’s voice to Hollywood strikes prompted by Sora, a series of incidents has exposed legal blind spots and practical pain points as old rules give way to new ones.

While handling recent commercial projects in areas including artist management as AI enters legal practice, the authors have found that market participants are facing increasingly complex infringement disputes.

The boundaries of the rights involved remain unclear, while traditional licensing contracts are ill-equipped to address the new issues raised by the technology.

For entertainment companies seeking financing or preparing for an IPO, intellectual property and data compliance flaws tied to AI-generated content have already become central risk points in regulatory and investment-bank due diligence.

Against this backdrop, this article – the first in a series – explores core legal issues at stake and moves beyond a single-focus infringement analysis to examine the challenges AI poses to commercial exploitation of personality identifiers, assessment of originality in AI-generated output, and compliance in model training.

Digitisation of personality identifiers and limits of commercial exploitation.��Under traditional entertainment law, portrait rights and voice rights have generally been defined as personality rights closely bound up with the individual.

In the age of AIGC, however, an artist’s voice, face and even bodily characteristics can be broken down by technical means into “data assets” for machine learning, giving them substantial commercial value.

In judicial practice, Beijing Internet Court – in what was described as the country’s first case involving AI-generated voice infringement – made clear that a person’s voice, as a form of personality identifier, is personal and exclusive in nature; and that using AI to synthesise another person’s voice without authorisation constitutes infringement.

Today, an artist’s voice and likeness are no longer merely personality identifiers; they are core commercial assets. Where a third party uses deepfake technology without permission to create a highly recognisable “digital clone” for commercial purposes, that conduct may not only infringe voice and portrait rights protected under the Civil Code, but may also amount to a “confusing act” under the Anti-Unfair Competition Law.

In substance, it involves the improper appropriation of the artist’s traffic and commercial opportunities.

How to commercially price, clear and license the “AI training rights” for voices and likenesses, alongside the “usage rights” for generated output, has become an urgent challenge for the industry.

Authorship and originality in AI-assisted creation.��As AI tools become deeply embedded in film, television and music production, disputes over the legal characterisation of AIGC – namely, whether it qualifies as work protected by copyright law, along with ambiguity surrounding ownership of rights – have become a central trigger for multiple infringement disputes.

Current domestic judicial practice, as seen for example in the first copyright case over AI-generated text-to-image works, has established a preliminary standard centred on “original expression”. Where a human, in the process of generating content with AI, has engaged in complex prompt design, parameter adjustment and aesthetic selection demonstrating substantial intellectual input, the resulting output may be capable of clearing the threshold for copyright protection.

By contrast, where a creator merely inputs simple instructions into an AI system, the output is unlikely to satisfy the originality requirement because of the absence of deep human intellectual contribution. Instead, it will be treated as material in the public domain.

That means AI-generated content produced with significant investment by film and television companies may nevertheless fail to attract exclusive rights, creating a material commercial risk.

In addition, the China Audio-Video Copyright Association issued new rules in January 2026, making clear that audio-visual programmes generated by AI will not be registered unless and until the law provides otherwise.

Whether in judicial practice or in the protection of works, this poses a challenge for identifying subsequent creative works.

Copyright risk and liability allocation at the model-training stage.��Beyond copyright disputes surrounding generated output itself, another hidden danger for film, television and music producers lies in the legality of underlying training data used by AI tools.

Aftershocks of the Hollywood strikes underline deep concerns of creators that AI companies may scrape copyrighted material without authorisation for transformative training.

Copyright infringement suits brought by��The New York Times, prominent authors and music publishers against leading AI companies underscore the point.

In the Ultraman case, Guangzhou Internet Court held that the defendant AI company infringed the claimant’s rights of reproduction and adaptation in the Ultraman works, making it an early precedent on front-end liability for generative AI platforms.

If an AI tool used by an enterprise has been trained on content scraped without lawful authorisation, any script or score it generates may be found substantially similar to the original work.

For content producers, this represents a serious commercial hazard. Once a finished production containing such material is released to the public, the producer may not only face infringement suits and substantial damages claims from the original rights holder, but may even be forced to withdraw the project because defects in title undermine its core intellectual property rights, destroying its ability to generate commercial returns.

Takeaway

AI is reshaping the content production model of the film, television and music industries, but while doing so it is also generating complex and multi-layered rights conflicts and compliance challenges, while exposing limits of the current legal framework in practical application.

For entertainment companies, accurately identifying and clarifying these core legal issues is not only essential to prevent infringement disputes and avoid takedowns, but it is also a necessary precondition for ensuring the smooth progress of financing and listing plans.

On the basis of these infringement risks, the next article in this series will focus on specific compliance priorities and practical guidance for entertainment companies applying AIGC.

Jiang Shen is a��partner��and Xu Wen is an associate at��Jingtian��& Gongcheng

The post Infringement risks of generative AI in entertainment industry (Part 1) appeared first on ���߲�����.

Fee disclosure

Audit fees are no longer treated simply as a commercial matter between management or the board and the auditor. Under the new FAQ, where an AGM circular asks shareholders to approve the appointment or reappointment of an auditor and to authorise the fixing of its remuneration, the circular should disclose the estimated audit fee agreed between the company and the auditor. The fee may be presented either as a specified amount or as a range, but the circular should also explain the basis of determination and the assumptions as discussed between the issuer and the auditor (for example, complexity and business plan of the listed issuer, the expected audit scope, audit timetable and auditors’ resources required). Unless those assumptions or the underlying basis change materially, the final fee should not, in principle, differ materially from the estimate disclosed in the circular.

That requirement will change the more generic disclosure practice seen in the past. Many issuers previously did little more than state in the circular that shareholders were being asked to authorise the board to fix the auditor’s remuneration. The new FAQ brings fee expectations into the shareholder materials at the outset, allowing investors to judge, on a more informed basis, whether the appointment or reappointment is reasonable.

It also means that a later attempt to replace the auditor on the ground of a “disagreement over audit fees” will face closer scrutiny. If an estimated fee was agreed before the AGM, an issuer that later says no agreement can be reached must explain whether the gap arose from changes in audit scope, circumstances, timetable, or another key assumption.

Resignation or removal

The most significant part of the FAQ, however, is its clear warning that where an issuer asks an auditor to resign, or takes action to cause the auditor’s resignation, such request or action may amount to a removal of the auditor by the listed issuer, which requires shareholders’ approval under the listing rules.

In its March 2026 review of the HKEX’s performance in regulating listing matters, Hong Kong’s Securities and Futures Commission (SFC) made a similar point, noting that requiring an auditor to resign may in practice sidestep the listing rules mechanism under which an auditor’s removal must be approved by shareholders.

The new FAQ responds directly to that concern. It gives a concrete example – pressuring the existing auditor to materially reduce the previously agreed fee – that may raise the same issue.

Future analysis of auditor changes will turn on substance, not labels. Even if the documents call the event a “resignation” or a “change”, regulators are likely to examine: whether the incumbent had already been appointed at the AGM; whether the issuer sought quotes from other firms; whether the auditor was asked to stop work or resign; whether a lower rival bid was used to force a fee cut; and whether unresolved audit issues, accounting disputes or scope disagreements remained.

If the issuer in substance caused the auditor to leave mid-term, appointing a replacement by board decision alone may not satisfy the procedural requirements.

Regulatory shift

This also shows how regulatory attention has shifted away from whether the market was notified promptly, and towards why the auditor was changed, who drove the change, and whether audit quality may have been affected. In recent years, the Accounting and Financial Reporting Council has repeatedly warned that auditor resignations close to year-end, aggressive fee cuts, delayed payment of audit fees, and boilerplate references to “audit fee disagreements” can all damage audit quality and weaken confidence in the market.

The key questions now include whether there are unresolved audit matters, whether the incoming auditor has the industry experience, staffing and time needed to complete the audit, and whether the audit committee has genuinely investigated the reasons for the outgoing auditor’s departure and independently assessed the incoming firm’s capability and the reasonableness of its fee.

For listed companies, the starting point is to distinguish between routine rotation, non-reappointment, resignation during a term, and cases that may in substance amount to removal. If the incumbent auditor has already been appointed by shareholders and the company is considering a mid-term change by seeking quotations from other audit firms, pressing for fee reductions, or asking the auditor to cease acting, it should assess, before the board makes any decision, whether shareholder approval is required and whether a circular needs to be prepared.

The audit committee should not simply sign off on the final announcement. It should engage early, review the outgoing auditor’s resignation letter, and speak to the auditor without management present to test the stated reasons and whether any audit matters remain unresolved.

When choosing a replacement auditor, the company should keep a written record covering the incoming firm’s independence confirmation, listed-company and sector experience, engagement team, audit plan, timetable, quality control arrangements, professional clearance and fee basis.

If the incoming auditor’s quote is materially lower than the incumbent’s, the audit committee should explain why it still supports the work required, rather than citing cost savings alone. Minutes of board and audit committee meetings should record the discussion, the questions asked, the materials reviewed, and the basis for the judgment reached.

Taken together, the FAQ shifts regulation of auditor changes toward substantive review. For issuers, The issue is no longer how the announcement is worded, but whether they can show the reasons were genuine, the process robust, shareholder rights respected and audit quality preserved.

Since the FAQ was issued, there have already been cases in which a company first announced only the auditor’s resignation and the appointment of a new auditor, but later disclosed that it had actively prompted the resignation and then sought shareholders’ approval at a general meeting both to remove the outgoing auditor and to appoint the replacement.

That suggests the FAQ is already affecting market practice. Under this stricter approach, listed companies, and especially audit committees and boards, will need to take a far more careful view of process, disclosure and audit quality when handling an auditor change.

Stella Yeung��and��Stephen Luo��are partners at��Jingtian��&��Gongcheng��

The post Tighter scrutiny of auditor changes under HKEX’s new FAQ appeared first on ���߲�����.