Talking shop

PUBLISHED : Saturday, 14 November, 2009, 12:00am
UPDATED : Saturday, 14 November, 2009, 12:00am

In 2004, when I challenged the Housing Authority's proposal to sell off its assets at cut-rate prices, I was prompted by a sense of justice to protect the wider public interest. The fact that Hong Kong did not (and still does not) allow class-action litigation was another reason that impelled me to support the legal action lodged by public tenant Lo Siu-lan to seek a judicial review in a bid to pull the plug on the authority's privatisation plan.

Although both the High Court and the Court of Final Appeal ruled in favour of the government, High Court judge Mr Justice Michael Hartmann pointed out in his ruling that public housing tenants were entitled to defend their rights by seeking redress in court, and society should respect these rights.

Even though the Court of Appeal had also ascertained the legality of the listing of The Link Reit - a unit trust used to acquire Housing Authority assets - it stressed that, while the authority had the power to dispose of its properties, it must also secure the provision of housing and ancillary amenities.

To support its case, the Housing Authority pledged at the time that, if The Link Management disrupted the provision of any facilities, it would bear all responsibility to restore them.

So, we might have lost the battle, but not the war. We had secured a clear legal definition that, while the authority had the power to dispose of its properties, its action must not contravene its duties to secure the provision of housing and ancillary amenities for its tenants. Unfortunately, biased media coverage swung public opinion in support of the IPO exercise.

Most of my apprehensions about the privatisation have since turned out to be true. The Link Reit has made many changes to its facilities to maximise profit, affecting the provision of certain amenities. My fear that the plan would create many social problems has materialised. And staunch supporters of the IPO have now shamelessly switched sides to attack The Link Reit.

I certainly do not condone their behaviour but, thank God, good things do come out of bad situations; increased public pressure has forced The Link to become more accountable and not to neglect its social responsibility.

Over the last four years, The Link has undergone many structural changes. It is no longer controlled by powerful strategic investors, most of whom had sold off their shares in the aftermath of the global financial crisis. Due to intense public scrutiny, even the remaining strategic investors are aware they would not be able to sell off the assets in bundles for a quick profit.

The Link is now controlled by some 23,000 minority shareholders, which means it will not solely look after commercial interests at the expense of those of public-housing tenants.

Nevertheless, it is still a market-driven company with salaries and bonuses for senior management explicitly linked to profits. It's understandable that The Link has to look after its commercial interests. But maybe it should link its corporate image to its public support to create a social-conscience index for the company.

The option of a total buy-back by the government to 'nationalise' the assets is out of the question because not only would it be too costly, it would also contradict the administration's non-interference economic policy. The government would have to subsidise tenants after the takeover as well.

Many of The Link's commercial tenants are small retailers or corner shops that are an essential part of the local community. In most cases, the financial rewards are often abysmal but many remain because of their emotional link with the community.

A proper solution would be for The Link to buy these tenants out with reasonable compensation so they could retire. As for those who still want to work, it could consider employing them or encourage other tenants to hire them to work at the malls so they could remain active in the community.

It would not be inappropriate to say that the relationship between The Link and its tenants is as close as lips and teeth, as the Chinese saying goes. Therefore, it is not difficult to comprehend why the teeth would get cold if the lips were gone.

Albert Cheng King-hon is a political commentator