Explainer | Hong Kong firm’s cannabis promise to Cameroon casts spotlight on corporate laws

Questions over funds raised by Trade Park Corporation, registered in Wan Chai, highlight concerns about city’s light-touch regulatory environment

The Panama Papers scandal in 2016 showed Hong Kong was a hotspot for shell companies, which are legal but can be used to hide ill-gotten gains

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Hong Kong skyline and commercial buildings along the Wan Chai waterfront. Photo: Nora Tam

Published: 10:00am, 5 Dec 2019Updated: 12:54pm, 5 Dec 2019

Trade Park Corporation, a firm registered in Hong Kong, appears to have raised hundreds of thousands of dollars for a project in Cameroon.

But leaked documents reveal questions remain over its promises to several African countries, including creating a “world-class export zone” for the cultivation and export of medicinal cannabis in Cameroon.

The company, a subsidiary of London-based company services firm Formations House, promised to create 15,000 jobs and attract US$300 million of foreign direct investment for the remote rural commune of Meyomessala.

Its proposed “agripark” has not materialised, according to a joint investigation the Post undertook with NBC News and the Organisation Crime and Corruption Reporting Project,.

While based in Britain, the key figures behind Trade Park Corporation used one of Hong Kong’s company registration agents to incorporate the firm in the territory. It had no physical presence in the city, and was registered to a virtual office address in Wan Chai.

Its nominal presence in Hong Kong, which is famed for its ease of doing business, has brought renewed scrutiny to standards of due diligence in the international finance hub.

Hong Kong is among the most popular locations to establish offshore companies. Photo: AP

What’s the attraction of Hong Kong for foreign firms?

Hong Kong has long boasted a reputation as one of the easiest places in which to do business due to a mix of low taxes, light regulation and a trusted, British-inherited legal system. This year, the Heritage Foundation, a Washington-based think tank, named Hong Kong the world’s freest economy for the 25th consecutive time.