Francesco Sisci responds to George Koo
I don’t know what China’s leadership wants to do, and think that some amnesty is necessary. However, there is the possibility of different amnesties which would achieve different goals.
Whatever kind of amnesty is chosen, this has to go hand in hand with a set of new guidelines and rules for companies.
Here, (the issues and choices) may become quite technical. Do you want the amnesty to whitewash whatever the past crimes or will you set a limit? Example: Will drug trafficking will be excluded? How do you apply for the amnesty? Is it free and automatic? Or do you want to apply a fine to whoever applies for it? What will the amount of the fine be? What do you do with capital abroad? To bring back trillions of RMB could wreak havoc on the world economy and increase inflation in China. So do you allow this money to stay abroad? Do offenders have to declare it? Do they pay fines? What fines? And so on …
All of this impacts the future sets of rules that have to be developed to prohibit the greatest plagues of the stock market: Insider trading, lack of transparency in the management and accounts etc.