20 January 2020

BVI investment by HK officials’ spouses fuels debate, paper says

Spouses of two senior Hong Kong officials — Director of the Chief Executive’s Office Edward Yau Tang-wah and Secretary for Development Paul Chan Mo-po — are believed to have made some overseas investments through companies registered in the British Virgin Islands (BVI), which provide highly private financial services, Ming Pao Daily News reported Monday.

Citing joint research by the paper and the International Consortium of Investigative Journalists, the report said that Yau’s wife had held about 4.6 percent stake in a BVI company, Crown Investment International Ltd., which was founded in 2006 and specializes in stock, bond and foreign exchange investment. Contacted by the paper, Yau said his wife had sold the stake in early 2012, when he was chief of the Environment Bureau, and that she had never been involved in the firm’s daily operation.

Meanwhile, the paper also found that another BVI company Fidelity Management Ltd., which was closely related to the family on the side of Chan’s wife, owned a Hong Kong-registered firm named Pacific Sun Development Ltd. (PSHK) jointly with Guo Hsiao-ling, the daughter of Foxconn Technology Group (02038.HK) chairman Terry Gou. PSHK was found to have bought a land plot in Malibu, California in 2008 but is said to have later sold it for a loss. Chan said on Saturday that none of his family members has ever invested in land in the United States in any form, denying the allegation.

As Hong Kong has so far not required government officials to declare spouses’ assets, some legislators are calling for new rules. Pointing out that investment activities by spouses can easily lead to conflict of interest, the critics say officials should declare the assets held under the names of their spouse as is the practice in the United States and Japan. Investments in tax havens such as BVI should particularly be laid out in the open.

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