25 March 2019
The pan-democrats’ protests at Link REIT's head office are likely just publicity stunts to woo grass-roots voters in the Legco election. Photo: HKEJ, Facebook
The pan-democrats’ protests at Link REIT's head office are likely just publicity stunts to woo grass-roots voters in the Legco election. Photo: HKEJ, Facebook

Fight Link REIT with competition law, not publicity stunts

It has been quite eventful recently at the head office of the Link Real Estate Investment Trust.

Protests led by pan-democratic parties against soaring rent and the “hegemony of real estate developers” at its front door have been occurring almost daily.

As George Kwok-lung Hongchoy, Link REIT’s chief executive, said earlier, it has become almost a routine for politicians to stage protests in front of his office whenever there are elections coming up.

The fact that the pan-democrats always go after Link REIT only indicates their complete ignorance.

It is a public company, and under the law, only the Security and Futures Commission has the power to oversee its business practices.

As long as Link REIT hasn’t committed any crime, such as cooking the books, what it does is perfectly legal — including raising the rent for tenants in its shopping malls or evicting those who can’t afford to stay — no matter how unpopular or unjust such an act might be, because that is exactly how a market economy works.

Protests and empty slogans won’t change anything.

In fact, it is absolutely meaningless to hold big businesses to a high moral standard, because in any capitalist society, businesses are born to pursue profits — perhaps with the exception of social enterprises.

It is the universal rule of the capitalist game, under which companies only need to make sure they carry out their businesses legally, not morally.

Only naïve leftist idealists would believe in the notion that holding big businesses to a high moral standard can make our world a better place.

I bet all the politicians who have staged protests at Link REIT’s head office are well aware that their actions won’t make any difference at all.

The reason they keep doing that is they need this kind of publicity stunt to please their supporters.

As I said, since under capitalism, businesses are subject only to legal regulation, not moral criticism, instead of just shouting empty slogans at its head office, the only way to bring a giant company like Link REIT into line or put it in its place is to bring its business operations under close scrutiny to see if it has violated any law.

If there are signs that it has, then we should immediately raise the red flag and report it to the authorities.

As a matter of fact, I have identified some smoking-gun evidence that may indicate that Link REIT could have violated the Competition Law, which came into effect a little more than a year ago.

It really boggles the mind as to why the pan-democrats, with so many legal experts and prominent barristers on their side, have failed to notice that.

Is it because they have been so busy with their token protests lately to bother to do their homework?

For example, Link REIT recently outsourced the management and maintenance of the public wet market at Cheung Fat Street, Tsing Yi, to a subcontractor and is planning to introduce a vertically integrated business model to vegetable and seafood vending, despite the fierce opposition of the existing tenants.

Based on my observations, there are signs that such a change may involve malpractices such as predetermined sales volume, price fixing, price maintenance and customer allocation, all of which constitute anticompetitive practices under the law.

Another example is that when the Link REIT sells its properties by tender, the process often lacks transparency and oversight, giving rise to possible malpractices such as bid-rigging, predatory pricing or price squeezes.

In fact, given that there is so much potential for breaches of the Competition Law in the various business operations of Link REIT, all the pan-democrats need do is await the slightest slip on its part, then jump in and nail it to the wall.

So why continue to waste time on those meaningless protests?

One explanation may be that the pan-democrats themselves could also have noticed such potential malpractices but just don’t have the guts to take on big business.

All they intended to do was pull off some nice publicity stunts to please the grass-roots voters in the upcoming Legislative Council election.

If that is true, then they are just as hypocritical as lawmakers representing the Federation of Trade Unions, who on one hand vow to protect labor rights but on the other eagerly toe the government’s pro-business line when it comes to casting their votes on labor rights bills in Legco.

This article appeared in the Hong Kong Economic Journal on May 10.

Translation by Alan Lee

[Chinese version 中文版]

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HKEJ columnist

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