Not the right time to invoke LegCo special powers
LegCo voted last week to approve the motion to invoke special powers to investigate the minibonds matter. Even before the debate began, Members returned by direct election overwhelmingly favoured the motion. Support among Members returned by functional constituencies was less clear. It was a controversial issue and some Members were weighing the pros and cons till the end.
My position on the minibonds matter has been clear and firm all along. There were clearly cases of misselling by the financial institutions, and there were loopholes/weaknesses in the current regulatory regime and process. I believe that the banks, the regulatory authorities and the investors all have their share of the responsibilities in this financial mishap. A review of the regulatory regime should be made to find out where the system failed and to close the loopholes. I am also greatly disappointed by the tardy response and the slow progress in the settlement of the grievances of those retired and underprivileged persons who had been misled into investing in such risky derivative products. I have been a critic of the banks all along.
However, I do not support invoking LegCo’s special powers & privileges to investigate into the matter at this time. I believe the better approach is to set up a committee of highly credible independent experts to investigate into this matter and submit its report to the government and LegCo for consideration. Invoking LegCo’s special powers to investigate should only be the last resort.
My vote was abstention. Why did I vote ‘abstain’ instead of ‘No’ the motion? Let me explain. Under the prevailing LegCo rules governing the decision on motions, an abstention vote has a strong effect of disapproving a motion, though of a lesser degree than outright objection. Let us look at the following simplified illustration.
Suppose at a meeting with 29 members present, 14 votes ‘Yes’, 12 ‘No’ and 3 ‘abstain’. Although the number of ‘Yes’ exceeds the number of ‘No’, the motion cannot be carried because it needs 15 votes (i.e. over 50% of those present) for the motion to carry. Abstention in effect works against the carriage of a motion.
Stemming from several major concerns, I have strong reservations about supporting the motion:
1. Given the large number of parties involved and the complexity of the issues and legal technicality, the investigation process is expected to take a long time, thus diminishing the timeliness and usefulness of the outcome in helping the victims;
2. Invoking special powers of the LegCo at this time may force the banks to resort to a legalistic approach to all the cases and hold up the handling of disputes pending the outcome of the investigation. This may jeopardize the interest of investors whose priority is to salvage as much money as early as possible;
3. In the investigation process, sensitive and confidential business information may be revealed. This will adversely affect the business operating environment of Hong Kong and undermine Hong Kong’s reputation as a world-class financial center. Although some advocates of this motion argued that confidentiality would be strictly observed by members of the LegCo Committee while dealing with highly sensitive information, there are, sadly, precedents where sensitive and confidential information leaked nonetheless; and
4. The bigger challenge that Hong Kong now faces is the sudden downturn of the economy and rising unemployment. Hong Kong’s economy is bleeding badly and needs emergency care. Precious time and energy should not be diverted to the post-mortem investigation of the minibonds matter at this stage, or else all the people of Hong Kong may have to pay a very dear price for this.
If you would like to read the full text of the floor speech I gave, please follow this link:
My floor speech was in Chinese. If you would like to read the English translation, please let me know by sending an email to firstname.lastname@example.org. My staff will arrange to have the transcript forwarded to you as soon as it becomes available.
As always, I shall be pleased to hear your views on this highly controversial, and somewhat divisive, issue.
Paul M P Chan
Telephone No. : (852) 2165-7887
E-mail address : email@example.com
Personal web site : http://www.paulmpchan.org/
對我嚟講,“support” 就投“Yes”! “do not support” 就要投“No”!
把口話自己其實“do not support”, 但走去投“棄權”,仲要長篇大論去解釋投“棄權”票嘅好處,簡直係會計界嘅笑話!