image

Asian Infrastructure Investment Bank

No vote on HK$6 billion funding for Hong Kong’s AIIB share purchase amid dispute over benefits

Pan-democrats question investment returns and translation error in paper

PUBLISHED : Friday, 05 May, 2017, 11:17pm
UPDATED : Friday, 05 May, 2017, 11:28pm

With doubts over investment returns and disagreement on benefits, Hong Kong lawmakers did not vote on the HK$6 billion funding for the city’s subscription to shares in the Beijing-led Asian Infrastructure Investment Bank despite a seven-hour debate.

Pan-democrats cast doubt on returns while the government insisted it was an important move to reinforce Hong Kong’s position as an international financial centre.

The “entrance fee” for Hong Kong to join the AIIB is HK$6 billion, comprising HK$1.2 billion for paid-in shares, with five annual instalments of HK$240 million for 7,651 shares out of one million, and HK$4.8 billion for callable shares.

Will China-led development banks get the coveted boost to shape a new financial world order?

In the third meeting of the Legislative Council’s Finance Committee to discuss the funding on Friday, pan-democrats also raised concerns on the political agenda behind the bank.

“Paying HK$6 billion only buys us 0.7 per cent of voting power,” Labour Party lawmaker Fernando Cheung Chiu-hung said.

Undersecretary for Financial Services and the Treasury James Lau said the benefits could not be measured in financial terms, but they included the chance to be part of planning, implementation and operation of infrastructural projects under the “one country, two systems” principle.

Pan-democrats and committee chairman Chan Kin-por also disputed a translation mistake in the paper. The debate will continue next Friday.

The AIIB was launched two years ago, with Hong Kong’s membership into the group announced last month.