Former Hong Kong chief executive Tung Chee-hwa should resign as an independent director of Alibaba Group, a Beijing law firm said Tuesday, claiming Tung’s role in Alibaba could conflict with his vice chairmanship of the Chinese People’s Political Consultative Conference (CPPCC).
Tung’s spokepserson declined to comment as Alibaba is preparing for an initial public offering in the United States. Alibaba also said no comment.
Li Libin, a partner at Beijing-based Guo Lian PRC Lawyers, said in a statement obtained by EJ Insight that Tung should not be part of a company if he has a government role.
Li said a resignation would avoid potential conflicts of interest between the government and the commercial sector.
He said former CPPCC vice chairman Rong Yiren set a precedent by stepping away from commercial appointments after taking up an official role.
Li said that unlike late mogul Henry Fok, who kept up his private commercial interests while CPPCC vice chairman, businesspeople should turn their companies into trusts.
He added that listing in the US brings the risk of class action lawsuits, which Tung, as an independent director, would have some responsibility for. Any legal action involving an officer of the government could reflect badly on the country and its political system.
Li also urged Alibaba to resolve its independent director issues before listing in the US.
After stepping down as chief executive in 2005, Tung said he would not work for any private operations, including his family business, Oriental Overseas International Ltd. (00316.HK).
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