Hong Kong moves to limit info on company directors
Hong Kong is proposing to restrict the amount of personal information available on company directors in the wake of investigative news reports that used the data to help expose fortunes linked to Chinese leaders.
Under the proposed changes, home addresses and ID card or passport numbers of directors would be obscured in filings starting from the first quarter of 2014. The details could also be removed from historical filings on request.
Currently, anyone can access these details online for a nominal fee. The new law would restrict access to certain groups including law enforcement, regulators and liquidators.
The proposals highlight fears that Hong Kong's position as a relatively transparent and open Asian business center is slipping. The city, a special administrative region of China, enjoys separate legal and financial systems and high degree of autonomy that are legacies of more than a century as a British colony. Detailed information on public and private companies and land transactions is widely available.
That's not the case in other Asian jurisdictions, especially in mainland China, where most company information is secret. Some details such as names of board members or senior executives are public. But other details, if available, can only be accessed by people such as lawyers who are authorized to see files at commercial bureaus. In Japan, personal information is protected by privacy policies and laws while in South Korea, publicly listed companies are required only to disclose basic information such as names, birthdates and work history of directors.
The provisions attracted little notice until this week, when they were outlined in a briefing paper submitted to the legislature's financial affairs panel. They have worried investors and the media as the changes could make it harder to document cases of corruption or malfeasance.
Hong Kong has become a popular place for mainland Chinese businesspeople and government officials looking to hide their wealth through shell companies.
In one high-profile case last year, a detailed report by Bloomberg on the wealth of relatives of China's new top leader, Xi Jinping, relied on identity card numbers mined from company filings. The New York Times also used such data for articles about the wealth of Premier Wen Jiabao's family.
The proposals "are negative for transparency," said David Webb, a well-known shareholder activist. "They make it harder for investors, researchers, journalists and members of the public to find connections between individuals and companies. That makes it harder to expose corruption."
The changes proposed by the Financial Services and Treasury Bureau and the Companies Registry are aimed at updating existing regulations and increasing privacy protection, according to a consultation document released in November.
There is still a chance that the provisions could be amended by lawmakers.
The Hong Kong Journalists Association said it strongly opposes the move, considering it "a serious limitation on investigative reporting" and "an infringement of the public interest." The group said in a statement that access to the information has helped uncover illegal activities by government officials, politicians and business people. The Foreign Correspondents Club of Hong Kong also objected, posting an open letter calling on the city's leader, Leung Chun-ying, to withdraw the proposals.
Webb said he wasn't so concerned about home addresses being obscured as he was with identity numbers. In many cases, names are the only piece of information that can be used to make a connection with other people or shell companies. And if research turns up people who have the exact same names, like John Smith or, in Hong Kong, the equally common Chan Wai-ming, the numbers are the only way to distinguish between them.
Joe McDonald in Beijing, Elaine Kurtenbach in Tokyo and Youkyung Lee in Seoul contributed to this report.
Financial affairs panel briefing: http://bit.ly/VOLuHq
Consultation document: http://bit.ly/U6EJ4t
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