Bernard Chan says he would be happy to disclose further information about his offshore companies if that is what the public wants
GARY CHEUNG AND STUART LAU
UPDATED : Thursday, 21 April, 2016, 10:12pm
Bernard Chan has stakes in 19 companies based in offshore tax havens. Photo: SCMP Pictures
A prominent member of Chief Executive Leung Chun-ying’s cabinet has agreed on the need for more transparency in interest declarations after he and other senior officials and politicians were found to have stakes in companies based in offshore tax havens.
Bernard Chan, the Executive Council member named in the Panama Papers leaks and a director of more than 40 overseas companies, said on Thursday: “If the general public require members disclose business nature for all companies [in which they have stakes] I believe all of us would be happy to do so.”
But lawmaker Regina Ip Lau Suk-yee, another cabinet member, disagreed with former civil service minister Joseph Wong Wing-ping’s suggestion that the government should ban executive councillors and ministers from holding stakes in offshore companies.
Exco members are required to declare their paid directorships in both Hong Kong and overseas companies and to state the nature of business their companies are involved in. But if they hold other kinds of stakes, they are not required to make similar clarifications.
Chan did not declare the nature of business of the 19 companies in which he holds a stake.
In the case of Secretary for Commerce and Economic Development Greg So Kam-leung, for instance, he declared to the Exco secretariat that he had a stake in Lancy Development, but he did not have to state the nature of its business.
Chan, who insisted that he had made all the necessary disclosures about his offshore stakes as required, said offshore operations, though “secretive in public perception”, were “very common for the investment and financial sectors”.
“If [the public] believe that Exco members should not hold any stakes or directorships in overseas companies at all ... I would of course be unsuitable for a continued role in Exco,” said Chan, a member of the Thai-Chinese family that founded Bangkok Bank.
Ip, who chairs the pro-establishment New People’s Party, said it was quite common for many in Hong Kong, not just officials or the rich and famous, to hold assets in tax havens.
“In determining conflict of interest, the key question is not whether the asset is held by a person or a company, whether locally incorporated or overseas, but whether there could be a conflict of interest arising from the nature of the asset,” she said.
“The focus on place of incorporation [of companies] is a red herring.”
Exco convenor Lam Woon-kwong told the Post he was open-minded on whether the interest declaration should explicitly include interests of executive councillors’ spouses as well.
The Panama Papers – named after their country of origin where a law firm held the documents in secrecy before they were leaked – show that at least two companies, Perth Pacific and Belton Enterprises, were set up in the British Virgin Islands and the Bahamas in the 1990s through two offshore agents run by the family of development minister Paul Chan Mo-po, namely Excellent Assets and Fidelity Management.
Ip said there was a long-standing worry that if the rules were too tight, people with ability and diverse pecuniary interests in their family would be deterred from serving the public.
http://m.scmp.com/news/hong-kong/article/1937617/hong-kong-cabinet-heavyweight-caught-panama-papers-row-agrees-need
