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Tung's role at Alibaba unlikely to be problem

The appointment of former chief executive Tung Chee-hwa to e-commerce giant Alibaba's board has raised eyebrows but might not breach Beijing's rules on people in senior roles in public office joining firms, analysts said.

As a vice-chairman of the Chinese People's Political Consultative Conference, the country's top political advisory body, Tung ranks as a state leader. 

Beijing issued a circular in October that forbids sitting officials from holding any concurrent post at listed companies, unless they get approval from superior authorities. 

Even then, such officials are not permitted to receive pay, bonuses, shares and other "extra profits". 

Zhang Xiaosen, vice-chairman of the company law committee of the China Bar Association, said Tung's case was complicated because he was a Hong Kong resident.

Ren Jianming, a professor of governance at Beihang University in Beijing, said: "Technically the state leaders are not allowed to take any roles in companies, but the case of Tung could be exceptional due to his Hong Kong identity." 

While serving as a CPPCC vice-chairman, the late Ma Man-kei, of Macau, was chairman of the Macao Tai Wah Hong Investment Company.

Another CPPCC vice-chairman, the former Macau chief executive Edmund Ho Hau-wah, is now the honorary chairman of Tai Fung Bank in Macau. 

A source close to Tung Chee-hwa said he had accepted Alibaba Group's invitation to be an independent director after careful and thorough consideration.

In a statement, Tung said: "I agree with the mission of the group that it would help small enterprises develop their potential and business. I also agree with the group's mission of conducting business with a view to achieving sustainable development, not only short-term benefit."

Tung said he could not comment further as the company was filing its plan for its initial public offering of shares in the United States.

Neither Alibaba Group nor the CPPCC responded when reached for comment.

Tung left his family shipping business before running to be Hong Kong's first chief executive in 1997. He became a CPPCC vice-chairman in 2005.

Xinhua reported last week that that more than 200 listed companies had had independent directors resign since October's directive, including ex-government officials, university professors and administrators.