business‎ > ‎

Hong Kong's plans to protect corporate data spark backlash

posted 23 Jan 2013, 07:58 by Mpelembe Admin   [ updated 23 Jan 2013, 07:59 ]

 Reuters Business Report -  Hong Kong - gateway between East and West; and a financial hub where Chinese and Western firms sit side-by-side on the Exchange's big board.

The city is also a place where Western business comes to learn how Chinese companies work.

The city's Registry lists over a million companies and operates under the British legal system.

But the Administration has proposed deleting ID numbers and addresses of directors listed in the Registry, a key source of information for investors and journalists.

While officials have said they're still reviewing the plan, it sparked a backlash and worries the city's reputation for transparency may be dented.

Corporate Governance Activist David Webb.

CORPORATE GOVERNANCE ACTIVIST, DAVID WEBB,

"Well, the government is getting more heavy-handed, the Hong Kong government, in intervening in various aspects of business. And in the process, they are undermining our reputation for free markets. And also, what built Hong Kong in the first place was the fact that we were a free market on the doorstep of Communist China. Unfortunately, we seem to be heading towards convergence rather than differentiation of Hong Kong's unique characteristics."

(SOUNDBITE) (English) REUTERS REPORTER, TARA JOSEPH, SAYING:

"Why is the community in such an uproar over this situation?"

CORPORATE GOVERNANCE ACTIVIST, DAVID WEBB,

"Well, what the government has done is to reduce transparency on corporate directors inHong Kong by blanking out their residential addresses and part of their ID numbers on corporate filings, and thereby making it much harder to identify who the directors of companies are and which companies a person is a director of. And that makes it very hard for researchers and journalists and so on to be sure about who they're dealing with when they're writing about individuals and researching, for example, the families of the Chinese leadership in Hong Kong and their assets here."

REUTERS REPORTER, TARA JOSEPH

"What does happen if this type of rules, legislation goes through? Does that really hurtHong Kong as a major financial center?"

CORPORATE GOVERNANCE ACTIVIST, DAVID WEBB,

"Yes, it undermines our transparency and reduces investor confidence and facilitates corruption particularly by Mainland officials doing business through their Hong Kongvehicles. Well, there is subsidiary legislation in the local council at the moment to put this into effect. And based on the amount of pressure that's now building on this, I would hope that they will reject that law and, thereby, force the government to go back and repeal the main provision that they've put in last year."



Comments