Fraud and other financial crimes involving financial intermediaries have been on the rise in the past few years.
To make things worse, I found recently that some intermediaries were posing as certified accounting firms to deceive members of the public.
Clients were being encouraged to borrow huge sums of money so that the intermediaries can rake in fee income.
According to government figures, the police received 235 reports of suspected foul play involving financial intermediaries from August to October 2015 alone. Among those, 61 cases are already under criminal investigation by the authorities.
There is no doubt that curbing the rise of financial crimes by intermediaries is a pressing issue facing our law enforcement officials.
Authorities must adopt a two-pronged approach in tackling the issue.
One, the police should step up efforts at cracking down on crimes involving financial intermediaries, Second, authorities must educate the public to help them differentiate between the genuine certified accounting firms and the fake ones.
In 2013, I proposed several amendments to the existing Professional Accountants Ordinance to bar unaccredited firms from using misleading titles such as “certified public accountants”, “CPA” and the term “accountant” in their registered company names, business cards, or any promotional materials.
However, despite the amendments, violation of the law has remained rampant, especially among financial intermediaries and private loan companies.
The accounting sector is deeply concerned about the operation of dubious entities in Hong Kong.
P.C Fung, a seasoned and highly respected accountant in Hong Kong, suggested recently that the government should consider introducing further legislation under which all certified accounting firms in Hong Kong must show their registration number issued by the Hong Kong Institute of Certified Public Accountants under their company names.
I think it is a very good and feasible idea, and deserves thorough consideration by the authorities.
To stem the tide of illegal business practices by financial intermediaries, I intend to table a private member’s bill next month in the Legislative Council.
In the bill I will recommend that the government outlaw any general description or statement shown in the advertisements and promotional materials of private loan firms or financial intermediaries that might mislead people into believing that they are certified accounting firms.
The move is aimed at protecting the interests of consumers and safeguarding the reputation of the accounting profession.
This article appeared in the Hong Kong Economic Journal on May 25.
Translation by Alan Lee
[Chinese version 中文版]
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