Embarrassment for government officials, China party hacks may be behind
the move
The Hong Kong government is
proposing to take a giant step backward in the fight against corruption.
Changes in the Companies Ordinance would reduce corporate transparency down to
the sort of level usually associated with offshore island havens of crooks and
tax evaders.
The proposed changes are given
the cover of the need to protect privacy. The government document reads:
"A feature of the new CO (Companies Ordinance) is to enhance protection of
the privacy of personal information in documents for registration ... a regime
that strikes a balance between protecting and the need for public access to
certain personal information".
This so-called personal
information is not what would normally be regarded as private but simple basic
data such as residential addresses and identity numbers. The privacy claim
appears a thinly disguised attempt to keep the lid on information. The
administration has clearly been embarrassed by revelations about its own
bureaucrats being involved in questionable property transactions to the point
that it now wants to make it more difficult for the public to have access to
information about the identity of directors of companies.
But greater pressure may have
been coming from China because of the success of journalists following paper
trails which identify the riches of the families of senior Communist Party
leaders who have become billionaires through the activities of state-owned,
party-controlled companies such as by acquiring shares at knockdown prices
before Initial Public Offerings.
The Hurun Report, which annually
ranks the wealth of China's wealthy, reported that 70 party officials
collectively possessed net worth of US$89.8 billion in 2011, a gain of US$11.5
billion over 2010. That doesn't count the scores of other individuals whose net
worth climbed as spectacularly because of their close proximity to power.
The greed of party officials
acting for their families is not themselves but who publicly make
anti-corruption vows has been exposed by foreign media such as the New York
Times and Bloomberg through access to corporate documents in relatively open
jurisdictions which hitherto have included Hong Kong.
In future, those wanting access
to "withheld information" about directors and other individuals
mentioned in the registration documents would have to apply to the Registrar of
Companies and provide reasons for his request. The Registrar alone would decide
on such applications.
To make matters worse, even
existing records could now be hidden from sight. Anyone wanting to have such
information withheld could apply to the Registrar.
Thus if this legislation is
enacted, expect a rush of applications not only from those hiding ill-gotten
wealth but the owners and directors of private companies which own or control
listed companies. The scope for cover-up will be vastly extended with only the
government itself having access to real identities and unlikely to care what is
covered up so long as it does not directly impact the government itself.
Many see this proposal as
evidence of the gradual erosion of the rule of law as the needs of the party
and its operatives take precedence over public interests which clearly include
information about company directors. It will also make tax avoidance easier and
be especially welcomed by those Chinese citizens with US passports nervous of
the long arm of the US tax authorities.
The proposal is also a step back
at a time when the Hong Kong government has been urged by one of its own
agencies to take better care of its records and documents and provide the
public access supposedly promised. The government has, presumably to protect
its own doings from subsequent exposure, not only refused to consider an
Archives Law which would ensure the proper retention of and access to documents
but has been regularly dumping large quantities of its own records.
While the new administration of
CY Leung publicly proclaims its commitment to transparency and ethical conduct,
its actual policies appear headed in the opposite direction. This is grist to
the mill of those who always believed that Leung was always a party operative
who would always put its interests and diktats ahead of Hong Kong's needs and expectations.
Business & Investment Opportunities
Saigon Business Corporation Pte Ltd (SBC) is incorporated in Singapore since 1994. As Your Business Companion, we propose a range of services in Strategy, Investment and Management, focusing Health care and Life Science with expertise in ASEAN 's area. We are currently changing the platform of www.yourvietnamexpert.com, if any request, please, contact directly Dr Christian SIODMAK, business strategist, owner and CEO of SBC at christian.siodmak@gmail.com. Many thanks.
No comments:
Post a Comment