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Following is a question by the Hon Margaret Ng and a reply by the Secretary for Economic Development and Labour, Mr Stephen Ip, in the Legislative Council today (December 14):
Question:
In late 1999, the Government and The Walt Disney Company set up a joint venture company - the Hong Kong International Theme Parks Limited ("HKITP") to build and operate the Hong Kong Disneyland. In its paper submitted to the Finance Committee of this Council for its meeting on 26th November 1999, the Administration stated that two non-executive independent directors mutually agreed by both shareholders would be appointed to the Board of Directors of HKITP. It has been reported that such appointments have yet to be made. Concerning the governance of HKITP, will the Government inform this Council:
(a) of the reasons for its failure to-date to appoint the independent directors and not regularly keeping this Council informed of the progress in this respect;
(b) of the action it has taken, since the establishment of HKITP, in regard to appointing the independent directors; and
(c) whether, in accordance with the principles of transparency in and accountability for public finance, it will publish all the directors' reports and audited financial statements of HKITP since its establishment; if it will, of the timing for that; if not, the reasons for that?
Reply:
Madam President,
In 1999, the Government and The Walt Disney Company (TWDC) formed a joint venture company, the Hongkong International Theme Park Ltd (HKITP), to develop and operate the Hong Kong Disneyland.
While the Hong Kong Disneyland Management Limited is responsible for the day-to-day operation of the theme park, the Board of HKITP exercises a supervisory role. The Board of HKITP currently has nine members. Five of them are appointed by the Government. They are the Financial Secretary, Secretary for Economic Development and Labour, Secretary for Financial Services and the Treasury, Secretary for the Environment, Transport and Works and Commissioner for Tourism. The other four members are appointed by TWDC. The Government and TWDC may, if they so agree, appoint up to two independent non-executive directors to the Board.
Upon the establishment of HKITP, the Government and TWDC have discussed the question of the appointment of independent non-executive directors. We consider that the primary objective during the construction stage of the theme park is to ensure the timely completion of the works within budget. Other than monitoring the project through the Board, we also set up a Steering Committee on the Implementation of Hong Kong Disneyland under the chairmanship of the Financial Secretary, which meets monthly to monitor the progress and expenditure of the Government's infrastructure works, construction of the theme park and other complementary arrangements. Under the Steering Committee, a works progress committee was set up to monitor the progress of the construction of the theme park and the Government's infrastructure works and deal with works-related matters. The Disneyland Readiness Committee set up in May 2004 coordinated interfaces of the work of various stakeholders in preparation for the opening of the theme park and monitor works progress. In view of the focus of the construction stage, both parties agreed in 2000 that it was not the appropriate time for the appointment of independent non-executive directors. The Board of Directors decided in 2000 that the appointment of independent non-executive directors should be made at a later stage. The Government briefed the Economic Services Panel of this Council in October 2000 of this decision.
Under the supervision of the Board and the Steering Committee, the Hong Kong Disneyland was completed on time and within budget.
Now that the Hong Kong Disneyland has entered the operation stage, there is a wider spectrum of matters for the Board to supervise. In line with our original plan, the Government considers it opportune now to consider the appointment of independent non-executive directors. The Government is in the process of discussing with TWDC the appointment of independent non-executive directors to the Board.
HKITP is a private company, there is no requirement under the Companies Ordinance for a private company to publish its directors' reports and audited financial accounts. Although TWDC invests jointly with the Government in HKITP, the Government has to respect the company's interests and its operation under commercial principles will not be compromised due to the disclosure of commercially sensitive information. As an international financial and business centre, we have to respect the right of a private company to protect its commercially sensitive information. The directors' reports and audited financial accounts of HKITP contain commercially sensitive information regarding the operation of the Hong Kong Disneyland. In accordance with its way of commercial operation, TWDC would not disclose individual accounts of its theme parks. But being a listed company, TWDC will disclose information on the performance of its theme parks in its annual report.
Thank you.
Ends/Wednesday, December 14, 2005
Issued at HKT 13:11
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