Disclosure should be simpler
THE appointment of a Securities and Futures Commission inspector to find out who holds the public shares of Hongkew Holdings appears cumbersome.
Under the Securities (Disclosure of Interest) Ordinance controlling company shareholders can ask public shareholders to identify themselves.
But in some nominee and trustee arrangements it is difficult for intermediaries to identify the final beneficiary of shares.
In many cases clients do not want to be revealed and inadequately fill out the disclosure form.
Once a form has been sent back, the requirements of the ordinance have been fulfilled, even if the shareholder has not answered the question.
There is no other recourse for the company in such cases and so an inspector has to be called in to freeze such shares and eventually, via the High Court, force their sale.
While there are problems associated with allowing controlling shareholders to go directly to the High Court, it is probably worth-while finding a way to make it easier for them to find out who holds their public shares.