bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

sponsorType

urlAlias

moreOnThisArticles

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

Disclosure-rule immunity makes some more equal than others, says critic

The government is claiming immunity to Hong Kong's new securities law, including the  issue of disclosure of shareholder interests.

In a written response to Webb-site.com editor David Webb, the government stated it would only make voluntary disclosure of its notifiable shareholdings of 5 per cent or more under the Securities and Futures Ordinance (SFO).

Mr Webb had quizzed the government on its  holding in MTR Corp and whether it felt bound by the SFO and its disclosure provisions, e-mailing Secretary for Financial Services and the Treasury Frederick Ma Si-hang last week.

On Friday, Martin Glass, a deputy secretary at the bureau wrote back. The entity set up to manage the government's equity portfolio, Exchange Fund Investment Ltd (EFIL), 'has obtained the approval of the financial secretary and HKMA to disclose on a voluntary basis any of its shareholdings which exceed the threshold stipulated in the SFO', he replied.

This also applies to  Financial Secretary Inc (FSI), which owns 76.14 per cent of the MTR. EFIL manages the equities remaining from its 1998 intervention in the stock market.

Mr Webb said the exemption flew in the face of the SFO. 'All investors should be treated equally. If they are in the market, they should be treated the same.'

His greatest concern was the potential for rigged votes in relation to the MTR and KCR Corp merger. 'The government could push it through by voting undisclosed shareholdings,' he said.

Mr Webb accused the government of abusing the Interpretation and General Clauses Ordinance, which says no law shall be binding on the state unless expressly provided.

The government said: 'The conclusion that the SFO does not bind the government is consistent with the principles of common law, which is that an act of parliament is presumed not to bind the Crown in the absence of express provision or necessary implications.'

It reiterated that EFIL, FSI and the HKMA would disclose, on a voluntary basis, any of the Exchange Fund's shareholdings which exceeded the 5 per cent threshold.

The issue was one of hot debate after the government's 1998 market intervention. David Stannard, a managing partner at  Norton Rose, in October that year made a  submission to the Legislative Council on behalf of the Law Society.



Government shuns securities law