Big Business Slams Hong Kong’s Move to Limit Company Registry
(Bloomberg) -- The main group representing multinational businesses in Hong Kong blasted the government’s hasty plan to limit information in the financial hub’s company registry, saying the move could hurt investments and trade.
In a letter to lawmakers distributed on Wednesday, The International Chamber of Commerce - Hong Kong urged the government to reconsider the proposal that would limit information available to the public to only provide partial identification numbers of company directors and remove their personal addresses.
ICC-HK Chairman JP Lee said in the letter that the group was “at a loss” over the eagerness to push through the measures and that they will have “adverse consequences” for Hong Kong’s business environment and its status “as an attractive city for investment and trade.”
The proposal was unveiled in late March and will be discussed at a hearing in Hong Kong’s Legislative Council on April 9. The government tried to push through a similar plan in 2013 but then had to backtrack amid strong opposition from investors, the press and the public.
The ICC-HK said the pace of the legislation has been so hurried that it hasn’t been able to prepare a proper response and instead enclosed a letter from 2013 outlining its misgivings.
It’s in the public interest to retain public access to names, addresses and ID numbers and the changes would “condone clandestine and doubtful activities at the expense of normal business dealings,” the ICC argued in 2013. “One may even ask if the government unwittingly instead encourages corruption, money laundering, and fraud.”
China is steadily tightening control over Hong Kong after pro-democracy protests shook the city in 2019. It last year imposed a broad national security law and last month approved an overhaul of the city’s elections to ensure that only those loyal to Beijing can take power.
Used by journalists, researchers, and shareholder advocacy groups, public registries have helped bring transparency and accountability to official and corporate dealings. But they can also result in disclosures highlighting the relationships between government officials in Beijing, their relatives and companies in which they have financial interests.
In a published response on its website, The Financial Services and Treasury Bureau emphasized the city’s commitment to transparency and anti-money laundering and counter-terrorist financing rules.
The proposal “has struck a reasonable balance between continuing to allow public access to the necessary personal information to ascertain the identity of directors and other major officers of companies, and protecting personal privacy.”
A report released last year by the International Consortium of Investigative Journalists based on leaked documents found that Hong Kong was among the biggest centers in Asia for dodgy money flows from 1999 to 2017.
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