Legislators fear court review may hamper minibond inquiry
Some lawmakers have expressed worries that bankers summonsed to appear before a Legislative Council inquiry into the Lehman Brothers minibond debacle may refuse to do so following a constitutional challenge of the legislature's investigative powers.
People familiar with the situation said banks involved were keenly following the judicial review of Legco's special legal powers, but it would be premature to say if they would resort to the same legal tactics.
The chairman of the Legco subcommittee investigating the Lehman debacle, Raymond Ho Chung-tai, was confident that the hearings would not be affected.
The subcommittee is currently exercising the legislature's special legal powers to summon witnesses and demand documents. The Court of First Instance on Tuesday granted leave for a judicial review of those powers.
The review was sought by the chairman and executive director of New World China Land, who had been summonsed to appear yesterday before a Legco inquiry into ex-housing chief Leung Chin-man's employment with the developer.
Following the developer's judicial review, some lawmakers on the subcommittee expressed concern that bankers called to testify in the minibond inquiry could refuse to appear, citing the developer's court case.
Ip Wai-ming, a lawmaker from the Federation of Trade Unions, said: 'I think it is possible that some bankers may refuse to testify. For example, they may cite their ongoing negotiation with investors as a reason not to appear.
'Of course the summons we issued are still valid and they can't simply refuse to appear. But if Legco unfortunately loses in the judicial review, it will harm the authority of the legislature and bankers may file similar lawsuits.'
The Democratic Party's Kam Nai-wai expressed similar worries. It was possible that bankers may decline to appear at the inquiry if there was no court ruling by the time they were summonsed, he said.
But Dr Ho said he was confident that ongoing hearings would not be affected and he had no worries over a possible similar legal challenge from bankers. Bankers could be expected to be summonsed by the end of this year or early next year at the earliest, he added.
Sources familiar with the situation said banks involved in the Lehman Brothers minibond debacle were keenly following the New World China Land judicial review. Although it was still too early to say whether bank executives would use the same tactic if summonsed by Legco, this could not be ruled out, the sources said.
In their application to the court, New World chairman Henry Cheng Kar-shun and executive director Stewart Leung Chi-kin argued that the 'powers and functions' of Legco articulated in Article 73 of the Basic Law referred to the full council, and that such powers could not be delegated to a committee.
The article consists of ten clauses, with number 10 stipulating the Legco's power to summon individuals to testify.
A member of the Basic Law Drafting Committee, who declined to be named, said no such doubt was raised in the process of drafting the article concerned.
Citing clause No 8 of Article 73, the drafter said the New World pair's argument was not sound. It reads that the Legco shall 'receive and handle complaints from Hong Kong residents'.
'If they [Mr Cheng and Mr Leung] were right, then should legislators only receive complaints from citizens when the full council met? ... once you look at sub-article (8) you can quickly spot the problem,' the drafter said.