The ducks are not talking to the chickens, says Steve Vickers
The row over the Hong Kong government's changes to the Companies Ordinance and the non-disclosure of directors' Hong Kong identity card numbers rumbles on. The move was condemned by panelists at yesterday's lunchtime discussion at the Foreign Correspondents Club entitled, "Will Corporate Transparency Survive in Hong Kong."
The basic issue - as we have mentioned here - before is that the ID number is specific to a unique person, unlike a name. It is not secret information, and is therefore not a privacy issue, which the government is citing as the reason for changing the ordinance.
"The ducks are not talking to the chickens," quipped panellist Steve Vickers, a veteran of corporate investigations. He pointed to the irony of new compliance requirements from regulatory organisations such as the Securities and Futures Commission, and the Hong Kong Monetary Authority, while another branch of government was seeking to make it harder to get access to the data.
"It's a dumb law," he said. "The new regulations will make life easier for money-launderers and for people involved in malfeasance."
He noted that since April last year there had also been a crackdown on the collection of basic corporate information by authorities on the mainland.
"The combined effect of what is going on in the mainland combined with the implications of the changes in Hong Kong are very dangerous," he warned. "It comes at a very bad time for Hong Kong, when we need more transparency not less."
Another panellist, corporate governance activist David Webb suggested that the privacy ordinance should be amended to state that names and ID numbers should not be regarded as private information.
With the approach of the Lunar New Year, stock brokers are rolling out their tips for the year. This is a trend that was started many years ago by CLSA and its Feng Shui Index.
Its competitors have seen there is some mileage in this approach. Credit Suisse yesterday unveiled its report "How to spend your lai see", which focuses on how to spend "small money" on stocks with undemanding valuations but with good growth prospects, which typically are small-cap stocks.
Last year's picks went well, with the portfolio making returns of 73 per cent compared with the Hang Seng Index's 26 per cent.
The signs for the Year of the Snake are conflicting. The January factor is signalling a positive year for stocks. The HSI rose on the first day of trading this year and this traditionally means the index will end the year in positive territory. It has a success rate of 83 per cent, but the last three snake years in 1977, 1989, 2001 were all down 7.2 per cent, 10.9 per cent and 32.5 per cent respectively. To cut to the chase, this year's tips are: Anta Sports Production, Skyworth Digital, Lonking, West China Cement, Chow Sang Sang, Kingboard Chemical, Varitronix International, and Champion REIT.
Food for thought
We've been reflecting on the kerfuffle over milk powder. There are a number of aspects to this story but one in particular is striking. This has all come about because of the crisis of public confidence on the mainland over food safety. This is a country, as we all know, that has achieved remarkable things in all walks of life. It has produced world-beating athletes and launched an aircraft carrier. It has sent people into space and returned them safely to earth. Yet one of the paradoxes of mainland development is the inability to safeguard the quality of the food supply, which is why mainlanders are keen on milk powder and other food items in Hong Kong.
Also, people on the mainland these days are somewhat leery of canteens and greasy spoon restaurants on account of their use of so-called gutter oil. This is pumped from sewers and grease traps outside restaurants, or pressed from trash. It's supposed to be used for biodiesel - not human consumption. Caixin magazine reported last week on a court case of a man whose trial has exposed a huge distribution network over four provinces involving a network of resellers of supposed cooking oil. This operation produced 60 tonnes of gutter oil a day at its peak, which was being used in the food industry prosecutors say.