• Tue
  • Jul 29, 2014
  • Updated: 10:58pm

Exco tightens regulations on disclosure of interests

PUBLISHED : Wednesday, 13 June, 2012, 12:00am
UPDATED : Wednesday, 13 June, 2012, 12:00am
 

The Executive Council yesterday endorsed tighter rules on the declaration of interests that include requiring members to disclose any interest in land or property held through a shelf company.

The revisions came almost two years after Executive Council member Lau Wong-fat was found to have failed to declare three property transactions that allegedly constituted a conflict of interest with his cabinet role.

'The government undertook to conduct a review of the declaration requirements in the light of an earlier incident in which an Exco member had misunderstood the rules concerned,' a government spokesman said yesterday.

The spokesman did not name the councillor but Chief Executive Donald Tsang Yam-kuen, defending Lau in 2010, said the rural strongman had misunderstood the declaration system and had made an oversight. Lau was later cleared of wrongdoing by the government, which said he 'did not infringe the declaration requirements deliberately'.

Under current rules, Exco members must declare the land and property they own or from which they receive a 'beneficial interest' in Hong Kong or outside.

Lau was found to have failed to disclose that he bought three houses in Yuen Long development Palm Springs through a company in which he has a 40 per cent stake.

The omission contravened an Exco rule that any change in a member's property ownership must be reported within 14 days.

Lau later blamed his staff for misunderstanding the mechanism for making declarations.

Tsang also promised at that time to look at potential ambiguities in the system and to 'clear things up and avoid any grey areas'.

In a document presented to the Legislative Council yesterday, the administration said it would add footnotes to the term 'beneficial interest' to clarify and refine the requirement.

Under the revised rules, Exco members who hold an interest in land or property through a shelf company - an inactive company acquired 'off the shelf' without the need to go through the formalities of registering a new one - must declare that interest regardless of the size of shareholding in the company.

Exco members must also declare the land or property interests held by a company if they control the company, own more than 33 per cent of the company's shares or are entitled to 33 per cent or more of its voting power.

The new rules also require any changes to interests in land and property outside Hong Kong be declared within 28 days.

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