Hong Kong is proposing
some changes to the Companies Ordinance. Webb-site.com editor David Webb will be presenting a
submission to the Legislative Council Bills Committee today,
and you can read his submission online. We also look back at the glacial
pace of reform since 1973. |
Companies Bill 2002
15th October 2002
The Hong Kong Government has proposed
some piecemeal amendments to the Companies Ordinance, which are currently being considered
by a Bills
Committee of the Legislative Council.
The origins of these proposals date back to the 2-Mar-94 budget speech in which the
then Financial Secretary Sir Hamish Macleod said:
"We have tried in the past to respond to
developments in the corporate world through piecemeal amendment of the Companies
Ordinance. I believe we have reached a stage when a thorough review has become
essential. We now need an ordinance for the 21st century. I have therefore asked
the Secretary for Financial Services to take this forward."
In response, a consultancy report (popularly known as the Pascutto Report)
was commissioned by the
Government on 23-Nov-94 and delivered to then Financial Secretary Donald Tsang on
27-Mar-97 (full
report or executive
summary). This was followed by a public
consultation on the consultancy report which was launched on
1-May-97 and concluded some time in mid-98. Then in early 1999 the
Standing Committee on Company Law Reform (SCCLR), which was formed back
in 1984, began a further study on the Pascutto Report and the results of the
public consultation. This resulted in an report
on the Pascutto Report being published in Feb-00. In that document, they
wrote:
"It goes without saying that this third step will be succeeded by many
more before the legislative process has been completed"
But they said it anyway, and they weren't kidding. Now, 8.5 years, two
sovereigns and two
Financial Secretaries after the budget speech, another of those "piecemeal
amendments" is being proposed to the Companies Ordinance - something that
Sir Hamish Macleod intended to avoid.
At Webb-site.com, we think of laws as the "software" of
society. We need a system of major releases as well as occasional and prompt "software
patches" to fix bugs (or loopholes) and add minor new features as we go along. The last
major release of Company software in Hong Kong was 1984, in response to a report
issued in 1973, when man last walked on the Moon, colour TV was still a novelty,
and the first personal computers looked like this.
If Microsoft (which wasn't founded until 1974) had proceeded at the speed of
HK Company Law, we'd be living with DOS and waiting for Windows. With this
glacial pace of reform comes the Companies Bill 2002, implementing 17 of the
recommendations from the SCCLR's report of 2000. The other recommendations will
be "implemented in phases".
Never mind, progress is better than nothing, so download our submission
and read it for yourself. Other submissions and the agenda for today's Bills
Committee can be found here.
© Webb-site.com, 2002
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