Disney firm jumped the gun by a month

PUBLISHED : Tuesday, 08 February, 2000, 12:00am
UPDATED : Tuesday, 08 February, 2000, 12:00am

The Disney joint-venture company was set up more than a month before the deal on the project was struck, the South China Morning Post has discovered.

The revelation prompted calls for the Government to explain why it had jumped the gun before getting legislators' approval.

Companies Registry papers show Hongkong International Theme Parks, which will run the Disneyland, was established on September 24 when officials were still negotiating with Walt Disney.

The deal was struck by October 31 and announced two days later.

The company's majority ownership was concealed in initial records at the registry, which showed only LFDI Nominees and LFDI Secretaries as the subscribers and owners of two of the 10,000 shares of $1 each.

The company's initial capital was $10,000 divided into 10,000 shares of $1. By November 10, Tourism Commissioner Mike Rowse signed as a director of Hongkong International Theme Parks, injecting an additional capital of $9.99 million. The capital was increased to $9.7 billion in December. The Government holds shares worth $3.24 billion while Disney holds $2.45 billion.

The remaining $4 billion subordinated shares represent the cost of forming the 126 hectares of the park.

A government spokesman said the early registration of the company was needed as preparation.

But Democrat legislator Andrew Cheng Kar-foo said there should be a more detailed explanation.

'It seems the Government has jumped the gun and failed to respect the rules. Legco had not endorsed the funding at that stage.

'How could the Government just assume the project would go ahead? It's a matter of principle.' Legislator Cyd Ho Sau-lan of The Frontier said: 'From a business point of view, the early set-up of the company is a prudent move. But I don't think the Government should do that before getting Legco's approval.' The joint-venture company will have 11 directors - five officials, four Walt Disney representatives and two independent members.

Officials are deciding on the directors' list, the date for the first board meetings and whether the directors should receive payment.

Only Mr Rowse, Financial Secretary Donald Tsang Yam-kuen and Secretary for the Treasury Denise Yue Chung-yee are listed as directors in the document the Government filed with the registry in November.