Opinion | Hong Kong must retain open access to company data

The government's attempt to shield the identity of company directors under the guise of protecting privacy is not merely an invitation to fraud and corruption; it reveals a basic misunderstanding of the purpose of a company.

Quite why the privacy commissioner supports this denial of information is not clear. Is it because he has been leaned on by officials and mainland interests or because, as a lifetime bureaucrat, he has little concept of what distinguishes a company from an individual? In that connection, one must also ask why so many positions of this sort are handed out to lifetime civil servants rather than to respected individuals from the private sector, academia or the judiciary.

Let us get one thing absolutely straight, Mr Commissioner. All limited liability companies are businesses, whether or not they are engaged in trade, manufacturing, services, or simply exist to hold assets. Nor are they just businesses. They are ones accorded special privileges unavailable to private individuals. First, they almost all have limited liability, unlike either a person or a partnership. If they fail and are liquidated, their shareholders' liability is limited to their subscribed capital.

Secondly, in the case of Hong Kong and many other jurisdictions, they enjoy tax advantages over individuals. Thus, a company that is simply a vehicle for owning, for example, a building or just one apartment can be sold to another company without payment of the stamp duty on property transactions that applies to people. Other advantages also accrue, unavailable to salaried individuals.

In return for these privileges, it is essential that the directors and management of these entities be subject to a minimum level of scrutiny, at the very least their real identity and a real place where they can be located. This has no connection with personal issues such as their sex lives, private e-mails or eating habits. It is part of a bargain with the community at large whereby limited liability exists to encourage entrepreneurship, business formation, and risk-taking both by the shareholders and those who lend to them or trade with them.

That the changes in the Companies Ordinance to limit access to this information have got this far is a major indictment not just of the government and the privacy commission but of the politician-lawyers in the Legislative Council. Where were the many barristers and solicitor legislators from the Democratic and Civic parties? Too busy with meaningless gestures of protest than addressing real threats to freedom of information?

Nor is it sufficient for the government to be shifting its ground, reportedly to allow select people - possibly including journalists, in addition to official entities such as the Securities and Futures Commission and Monetary Authority - access to real identities. Important though access is for these groups, it is far from sufficient. Leaving government officials in control over access is also dangerous. Government agencies are seldom prone to ask questions.