A financial centre for two empires : Hong Kong's corporate, securities and tax laws in its transition from Britain to China / David C. Donald ; with contributions from Jefferson P. VanderWolk and Wang Jiangyu.
2014
KNQ9328 .D66 2014 (Map It)
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Title
A financial centre for two empires : Hong Kong's corporate, securities and tax laws in its transition from Britain to China / David C. Donald ; with contributions from Jefferson P. VanderWolk and Wang Jiangyu.
Published
Cambridge, United Kingdom ; New York : Cambridge University Press, 2014.
Call Number
KNQ9328 .D66 2014
Former Call Number
Ch.HK 610 D71 2014
ISBN
9781107004801 (hardback)
1107004802 (hardback)
1107004802 (hardback)
Description
xiii, 279 pages : illustrations ; 24 cm.
System Control No.
(OCoLC)870285821
Summary
"This is a case study of legal transplant, economic development, cultural adaptation and political integration. Hong Kong's journey from British entrept to China's international financial centre is one of the most interesting legal stories of our time. But Hong Kong's future is even more interesting: will this region with British-origin institutions survive full integration into China and become its permanent international financial centre? Does Hong Kong have the legal infrastructure to compete effectively with Shanghai and Singapore, and even New York and London? A Financial Centre for Two Empires presents Hong Kong's story, examines its corporate economy and securities market, assesses its corporate, securities and tax laws for doctrinal soundness and appropriate remedies, and evaluates the quality of their enforcement empirically. It closes with a view of Hong Kong from the perspective of developments in Beijing and Shanghai, including an examination of the important political dimension"-- Provided by publisher.
Bibliography, etc. Note
Includes bibliographical references (pages 258-268) and index.
Record Appears in
Table of Contents
List of figures
ix
List of tables
x
Preface
xi
1.
History's marks on Hong Kong law: from British colony, to Chinese SAR
1
A.
Hong Kong's historically driven component culture
1
1.
The endowments of an international financial centre
1
2.
Accidental haven with unintended consequences
4
B.
Forming Hong Kong's `caretaker' government model
9
1.
Cutting in the middlemen
9
2.
Institutions of intermediation
15
3.
Cultivating community leaders
19
C.
Building the Hong Kong legal system
22
1.
Laying the foundation
22
2.
A `colonization kit' of ordinances for the good order
25
3.
Linking Hong Kong to the English Common Law
27
D.
Hong Kong as an exemplary jurisdiction in China
34
1.
A new role for an old port
34
2.
From caretaker society to civil society?
36
3.
Laissez-faire policies are essentially fading path dependence
44
4.
Hong Kong must begin to make common law
49
2.
Hong Kong's economic structure: the corporate control context
54
A.
Two salient economic characteristics
54
1.
The dominance of substantial shareholders
54
2.
A stock market dominated by companies formed under foreign law
57
3.
Data and methodology
59
B.
Hong Kong's corporate groups
62
1.
The financial services sector
62
a.
The Bank of East Asia
62
b.
The Bank of China Group
64
c.
HSBC Holdings
66
d.
Standard Chartered
68
2.
The property development sector
69
a.
Cheung Kong Holdings
71
b.
New World Group
73
c.
The Hang Lung Group
77
d.
Henderson Land
79
e.
Sun Hung Kai
83
3.
The commerce and industry sector
85
a.
Jardine Matheson
86
b.
China Mobile Limited
88
c.
Hutchison Whampoa Limited
88
d.
Swire Pacific
91
e.
China Resources
93
f.
CITIC Pacific
95
4.
Governance relevant information summarized for the dominant corporate groups
97
C.
An exchange dominated by other countries' companies
101
3.
Hong Kong corporate and securities laws in response to the Region's role as China's international financial centre
104
A.
Evaluating Hong Kong law on the basis of local risks
104
B.
Law transplanted (only) as the need arose
111
1.
Slowly evolving company law
111
2.
Crisis-driven securities regulation
117
C.
How good are the Hong Kong company and securities laws?
123
1.
Does company law protect against majority shareholder abuse?
123
a.
Public defence of minority shareholders
127
b.
Applying the unfair prejudice action to listed companies
131
2.
Does company law address the specific risks of corporate groups?
133
3.
Does company law protect both unsophisticated and sophisticated creditors?
140
4.
Does company law sufficiently serve private companies?
147
5.
Do company and securities laws sufficiently limit risks from foreign listed companies?
152
a.
Recognized and acceptable jurisdictions
153
b.
Required provisions in articles
154
c.
Outreach provisions of the Companies Ordinance
155
6.
Do securities laws and regulations prevent market abuse?
157
a.
Rules against insider dealing
159
b.
Rules against price manipulation
162
c.
Rules on short sales
163
d.
Requirements for investment banks sponsoring public offerings
164
D.
Reducing the risks of algorithmic trading through taxation
165
E.
Do Hong Kong company and securities laws measure up?
168
4.
The role of Hong Kong's tax policies
171
A.
Historical background
171
B.
Hong Kong's tax system today
173
C.
Hong Kong tax seen on a global scale
176
1.
Exchange of information
176
2.
Hong Kong as a `tax haven'?
178
D.
Taxation and the financial centre
183
1.
Stamp duty on stock transfers
183
2.
Exemption of offshore investment funds from profits tax
185
E.
Taxation and the rule of law in Hong Kong
186
5.
Enforcement of corporate and securities law in Hong Kong
188
A.
The institutional framework
188
1.
Introduction
188
2.
The courts
189
3.
The Securities and Futures Commission (SFC)
191
4.
Hong Kong Exchanges and Clearing Limited (HKEx)
193
B.
Private enforcement through litigation
196
1.
Unfair prejudice actions
196
2.
Shareholder derivative actions
201
3.
Securities fraud actions
205
C.
Public enforcement
206
1.
The range of the Sfc's activity
206
2.
Supervising licensed corporations
211
3.
Policing the market against misconduct
213
4.
Direct government action: a tale of two bailouts
216
D.
Contractual sanctions by the HKEx
220
1.
The enforcement record
220
2.
Quality versus volume
221
6.
China's impact on Hong Kong's position as an international financial centre: the legal and policy dimensions
223
A.
Introduction: integration, competition and erosion
223
B.
Cepa's direct benefits for Hong Kong's financial sector
225
C.
Listing Chinese companies in Hong Kong: the regulatory and legal challenges
228
1.
The China factor, especially SOE listings, in Hong Kong's stock market
228
2.
The legal framework for corporatized SOEs: the law on paper
230
3.
Legal-political governance of SOEs
234
a.
From traditional to corporatized SOEs
234
b.
SASAC as the de facto state shareholder
236
c.
Direct political control of SOEs by the party
238
4.
Political and policy considerations behind the listing of SOEs in Hong Kong
240
a.
The good policy pursuance: financial and political reasons for listing SOEs in Hong Kong
240
b.
Bonding Chinese SOEs to Hong Kong's better regulatory regime
242
c.
Political control of SOE listings by the PRC
246
5.
SOE listing: challenges for Hong Kong's regulatory and legal environment
249
a.
SOE operations: business judgement or political judgement?
249
b.
Challenges on cross-border enforcement of securities fraud between Hong Kong and mainland China
251
D.
The potential rise of Shanghai as a financial centre
254
E.
Concluding remarks
256
References
258
Index
269