THE jailing of businessman Ch'ng Poh on a conviction of defrauding his own company of $127 million is a positive sign that the courts are taking white-collar crime very seriously.
Shattering though it will be for the individual and his family, the sentence handed down by the High Court yesterday will send a powerful signal to Hong Kong's increasingly sophisticated business community that fraud and abuse will not be tolerated. That message cannot be trumpeted too loudly. For the sake of the territory's reputation as a financial and business centre it is vital that both domestic and foreign investors learn to value Hong Kong as a well-regulated and honest business environment. The financial scandals of the 1980s left the territory with a reputation for sharp practice it is only now living down.
With corruption and abuse considered widespread north of the border, Hong Kong's courts have a crucial role to play in helping prevent a similarly free and easy attitude developing in the local business culture.
That the courts have begun to treat white-collar crime harshly will not be lost on others suspected of business abuses. Nevertheless, the number and size of the incidents coming to light in recent years suggest a great deal more could be done to tighten the regulatory framework and subject companies to closer scrutiny than has been the case up to now.
Legislator Chim Pui-chung's argument that the regulation has been overdone and will drive foreign investors away does not bear scrutiny. No serious foreign player will want to put money in a market which tolerates fast-buck deals by a few individuals at the expense of other shareholders.
The regulators have made only a small beginning in keeping the markets honest. Stronger codes and consistent policing are still needed if Hong Kong's success is to continue well into the next century.
