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LCQ14: System of declaration of interests applicable to PAOs and Members of ExCo
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     Following is a question by the Hon Emily Lau and a written reply by the Chief Secretary for Administration, Mrs Carrie Lam, in the Legislative Council today (May 7):

Question:

     It has been reported that the spouses and relatives of some politically appointed officials (PAOs) hold assets through overseas companies. For example, the wife of the Director of the Chief Executive's Office has invested in equities and bonds through a British Virgin Island (BVI) company, whilst another BVI company which has a close relationship with the family members of the wife of the Secretary for Development has made joint investments with a Taiwanese businessman in the real estate market in the United States. Regarding the prevention of conflicts of interests of PAOs and Members of the Executive Council (ExCo), will the Executive Authorities inform this Council:

(1) whether they will amend the system of declaration of interests by ExCo Members and the Code for Officials under the Political Appointment System (the Code) to require PAOs to declare, to the best of their knowledge, information on the assets and liabilities of their immediate family members; if so, of the details; if not, the reasons for that;

(2) when they will implement the recommendations made in the Report of the Independent Review Committee for the Prevention and Handling of Potential Conflicts of Interests, so as to formulate a mechanism for imposing sanctions on PAOs who are proved to have breached the requirements on the prevention of conflicts of interests stipulated in the Code;

(3) whether the discussions by ExCo on the necessity of its Members withdrawing from ExCo meetings due to conflicts of interests during the consideration of individual items and the decisions so made by the Chief Executive will be recorded in the relevant minutes of meetings; if they will not be recorded, whether such an arrangement will be made; if such an arrangement will be made, when it will be implemented; if not, of the reasons for that; and

(4) whether they will release regularly the statistics on the withdrawals from ExCo meetings by ExCo Members due to conflicts of interests and upload them onto the relevant web pages for public monitoring; if so, when such an arrangement will be implemented; if not, of the reasons for that?

Reply:

President:

(1) The system of declaration of interests applicable to the Politically Appointed Officials (PAOs) and Members of the Executive Council (ExCo) is rigorous and effective. The Government has no plan at present to amend the current declaration system.

     The current declaration system requires PAOs of all ranks to declare their investment, shareholding, direct or indirect interest in any company; their directorships, proprietorships or partnerships in any company; and, if any, the specific details concerning their participation in any private company's affairs. They are also required to declare any investment and interest held by themselves or in the name of their spouses, children or other persons, agents or companies, but are actually acquired on their account or in which they have a beneficial interest. The names and occupations of the spouses of PAOs of all ranks are mandatory items to declare.

     Each ExCo Member is required to declare his/her personal interests including the following: (a) remunerated directorships in any public or private company; (b) remunerated employments, offices, trades, profession, and so on; (c) if the interests in the above two items include provision to clients of personal services which arise out of or relate in any manner to Members' position as ExCo Members, the names of clients; (d) land and property owned by Members in or outside Hong Kong, including those which are held in the names of Members' spouses, children or other persons or companies but are actually owned by Members; or those which are not owned by Members but in which Members have a beneficial interest; (e) names of companies or bodies in which Members have, either themselves or with or on behalf of their spouses or children, a beneficial interest in shareholdings of a nominal value greater than 1 per cent of the issued share capital; and (f) membership of boards, committees or other organisations. In addition, ExCo Members should declare to the Chief Executive on a confidential basis and in greater detail their financial interests, including shareholdings (irrespective of the amount) in companies as well as futures and options contracts, held by themselves or jointly with their spouses, children or other close relatives. Apart from the above declarations, it is the personal responsibility of ExCo Members to examine whether they have an interest in any item discussed by the ExCo and declare it before the ExCo discussion.

(2) The HKSAR Government has revised the Code for Officials under the Political Appointment System (the Code) in accordance with the recommendation by the Independent Review Committee for the Prevention and Handling of Potential Conflicts of Interests. The Code states that in the event of any allegation of breach of duty or the provisions set out in the Code by PAOs, the Chief Executive would decide, after due process, whether the alleged breach is established and, if so, the applicable sanctions, including warning, public reprimand, suspension or dismissal, or in the case of Principal Officials, recommendation to the Central People's Government for their suspension or dismissal.

(3) According to the existing arrangement, the ExCo Secretariat keeps minutes of every ExCo meeting, which record, among other things, Members' withdrawals from discussions.

(4) According to the existing arrangement, we have been releasing on an annual basis the statistics on withdrawal of Members from discussions at ExCo meetings due to conflict of interest on the ExCo website.

Ends/Wednesday, May 7, 2014
Issued at HKT 11:42

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