Controversial changes to Hong Kong’s company law which will allow directors to obscure their identities will come into force from August, despite criticism that the eased regulations could encourage fraud in Asia’s leading financial centre.
Home addresses and partial personal identification numbers of directors and secretaries will be designated “masked” in corporate records, meaning only select groups — including public officers, lawyers and accountants — will be allowed to access such information.
Amendments to the Companies Ordinance will be gazetted on Friday and tabled in the legislature next Wednesday. The first phase of the changes will be rolled out on August 23, according to a document submitted by officials from the Financial Services and Treasury Bureau to the legislature on Wednesday.
The new arrangements will be enforced in three phases:
- Phase 1, August 23, 2021: Companies will no longer have to show the usual residential addresses of directors and their full identification numbers to the public.
- Phase 2, October 24, 2022: Private information contained in all documents filed for registration from this date onwards and those registered on the Index of Directors will be protected from public inspection.
- Phase 3, December 27, 2023: Companies can apply to have private information in all documents filed before the commencement of phase 2 to be shielded from the public.
“There has been rising community concern over whether personal information contained in public registers are adequately protected, especially in the light of increased reported cases of doxxing and personal data misuse,” the document claimed. However, Hong Kong’s privacy watchdog was not able to say if any of the doxxing complaints it had received were related to company records.
Accessible to seven groups
As “protected information,” the personal data of the companies’ directors and secretaries will only be accessible by seven categories. They include members of the company, public officers or public bodies, a person or organisation appointed or empowered by the law, practising solicitors, certified accountants, authorised institutions under the Banking Ordinance and designated institutions regulated under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance.
Reporters and news organisations who traditionally rely on these records for newsgathering and investigations will lose access to the data.
The Hong Kong Journalists Association slammed the government’s decision in March, saying the move was another blow to Hong Kong’s press freedom.
Activist investor David Webb, who runs a free database of publicly available information of companies in Hong Kong and the United Kingdom, questioned the government’s decision back in March and said the proposed changes “will facilitate corruption, fraud and other crimes.”
“I don’t think the public needs to know where a director sleeps at night – that is a matter of personal security,” Webb told HKFP at the time. “But they do need to know exactly who the director is, and only a full, unique ID number can achieve that.”
The registry will ban the use of post boxes as correspondence address and people searching for the records could file complaints if addresses were found to be invalid, the document said. The residential addresses may be made available to the public after the registry is able to confirm that the correspondence address is invalid.
The treasury bureau described the move as an attempt to strike a balance between transparency and the protection of privacy.