Hong Kong Drops New Law Restricting Access to Directors’ Details

March 29, 2013 Leave a comment

Hong Kong Drops New Law Restricting Access to Directors’ Details

Hong Kong’s government dropped legislation that would restrict public access to the personal details of company directors, following opposition from unions, small businesses and journalists.

The Financial Services and Treasury Bureau removed provisions obscuring company directors’ residential addresses and full identification numbers from an overhaul of the city’s companies ordinance, according to a legislative briefing document sent by e-mail from Shirley Wong, the department’s spokeswoman.

Opponents of the change said it would protect bosses from scrutiny and erode the city’s reputation by making it easier to launder money and cheat on taxes. Trade unions have used the database to track down runaway employers who owed wages, and small businesses use the information to conduct background checks on trading partners.

“In the 14 years in which I was the Registrar of Companies, I never received any complaints about these provisions or suggestions that they infringed directors’ privacy,” Gordon Jones, Hong Kong’s registrar of companies from 1993 to 2007, said in an e-mail. “I would hope, however, that these misconceived and bad legislative proposals are not only deferred but also repealed.”

Hong Kong, a part of China with its own legal system, makes company filings available online. There were 3.5 million company searches done in 2012 in the database of more than 1 million directors.

“This is good for Hong Kong, good for overseas investors, it’s good for everyone,” said Danny Lau, chairman of the Hong Kong Small and Medium Enterprises Association. “As long as you’re not doing anything illegal, there’s nothing you should fear.”

Eight Immortals

Bloomberg News last year relied on Hong Kong and Chinese identity card numbers found in filings to chart the business ties and assets of the families of Chinese President Xi Jinping, ousted Politburo member Bo Xilai, and the descendants of veteran revolutionaries, known as the Eight Immortals, who ran China after the death of Mao Zedong in 1976.

Six companies controlled by Li Ka-shing, Hong Kong’s richest man, backed restricting access to the information and asked that details contained in old records also be expunged when the government held public consultations in 2009 and 2010.

“The LegCo paper is rather a long-winded way of saying ‘we are backing down and shelving it,’” said David Webb, the founder of corporate-governance website Webb-site.com, who had publicly campaigned against the law change. “It is a victory for common sense.”

To contact the reporters on this story: Simon Lee in Hong Kong at slee936@bloomberg.net; Benjamin Haas in Hong Kong at bhaas7@bloomberg.net
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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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