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Eric Li Ka-cheung and the Accountancy Constituency in Legco 1995-1997

A Personal Message.....

Dear Friends, Colleagues and fellow Professionals,

This report aims at providing you with a quick overview of my activities in the Legislative Council during the past two years. Together, we have witnessed this eventful and historical period, marked by the establishment of the first fully elected Council in the history of Hong Kong and by the Handover celebrations. Despite prevailing uncertainties, pressures and prophets of doom, Hong Kong rose to the great challenge of ensuring a smooth transition. As an elected Member of the Legislature, I was honoured to participate in this process and to contribute to its success.

Despite the exhilaration of the journey, the frustrations, rewards and satisfactions, I never lost sight of my responsibilities as your Representative in the Legislature. I have remained totally dedicated to the interests of our profession and to the well-being of our community. By bringing to my work the enthusiasm, common sense and expertise that we share as accountants, I have ensured that our views are taken into account and that the contribution of our profession to Hong Kong, past, present and future is recognized. This report highlights some of our achievements.

While carrying out my duties, I have often asked for your advice and have kept you informed of important events and happenings. To this end, I have opened various channels of communication including a regular bilingual Newsletter, full texts of all Policy Address and Budget Speeches, a Legco Report column in The Hong Kong Accountant and quarterly reports to the HKSA Council which I have distributed electronically through the Internet. I hope you have found this useful.

As Hong Kong begins its new and exciting journey under the SAR Administration, the need for our voice to be heard will be more important than ever. It is crucial that we continue working together, with other society interests, for the continued prosperity and success of an autonomous Hong Kong.

I remain faithfully yours,

Eric Li Ka-cheung

 

General Review

In line with the policies of our profession, the primary focus of my work and interventions during the past two years has been the continuing prosperity, economic development and well-being of Hong Kong. I have stressed the need to provide the infrastructure, and the education and training necessary, to support this development. I have also helped define the scope and the limits of our responsibilities towards the less privileged members of a modern and caring community. Overall, I have tried, during these two years, to voice the concerns of our profession clearly and strongly, to explain how we view the challenges faced by Hong Kong and the role we intend to play as individuals and as professionals. I have also, at home as well as abroad, taken every opportunity to explain Hong Kong and to tell all audiences of our collective will and capacity to meet these new challenges effectively.

Working for a Smooth Transition

"We have a deeply rooted desire to live as free men, to decide our own fate and to set our own political agenda. This agenda will reflect the true aspirations and vision shared by the People of Hong Kong. To respect Hong Kong today, is to let us conduct our own affairs and fend for ourselves."

Speech on the Valedictory Motion - 27.6.97

Despite Hong Kong's economic successes, the two years leading up to the Handover were marred by tremendous political uncertainty and continuing differences between the British and the Chinese Administrations. As a member of both the Preparatory and the Selection Committee I can now testify not only to the tensions and pressures of that period, but also to the amount of work that was necessary to ensure a smooth transition and the setting up of the SAR. I believe that what we have achieved so far is a sound basis for what will be accomplished by the first HKSAR Legislature in 1998.

Main Activities in the Political Sector
  • Legislative Councillor
  • Hong Kong Affairs Advisor
  • Member of the HKSAR Preparatory Committee
  • Member of the Selection Committee
  • Hon. Treasurer of the Association for the Celebration of the Reunification of Hong Kong with China

Speaking for the Accountancy Profession

"The Financial Secretary has also very positively responded to our suggestion to clearly map out in macro terms his strategy on the promotion of the services industry, and in particular my call on him to use the Trade Development Council as the vehicle to market the enormous benefits of our tax regime and the increasing significance of the service sector to our economy."

View from Legco Report, Hong Kong Accountant, March/April 1996

I am proud to report that, working closely with the HKSA, we have had considerable success in many areas of interest to our profession. A 'Summary Highlights' is provided on page 12. Further information can be obtained from my detailed quarterly reports, submitted to the HKSA Council, which you will find on my web site.

One of our major thrusts in this period has been to safeguard the confidentiality of tax records. Further to the recommendations and suggestions I made on behalf of the profession, several Bills, in the areas of Prevention of Bribery, Inland Revenue, Securities and Futures as well as Mutual Legal Assistance were either extensively amended or withdrawn.

Working with the HKSA, I was also able to keep at bay, changes to our Rules on the Incorporation of Accounting Firms e.g. raising the level of compulsory liability insurance proposed by Legislators; the Bills Committee on Subsidiary Legislation was eventually persuaded to accept the HKSA's original package completely intact.

I have also successfully persuaded the Government to withhold the controversial Securities and Futures Commission (Amendment No.3) Bill 1996 which could raise public expectations and possibly generate the mistaken perception that auditors of listed companies have a statutory responsibility to detect and report suspected fraud and management irregularities.

In my capacity as your Legco representative, I have also spoken extensively, both locally and overseas, for the Accounting Profession : the selection team of IFAC for the World Congress of Accountant 2002 , on the topic of Hong Kong's post-1997 political stability, as HKSA's keynote speaker at the CAPA conference in Beijing and to senior politicians and top officials of other countries most notably from China, Britain and the European Union.

Main Activities in the Professional Sector
  • Council Member, Hong Kong Society of Accountants
  • Chairman, Steering Committee on Professional Accreditation (HKSA)
  • Hon. President (Life), Hong Kong Accounting Professionals General Union
  • Chairman, Hong Kong Chinese University - Advisory Board on Accounting Studies
  • Chairman, Hong Kong Polytechnic University - Steering Committee for Area of Excellence in Accountancy
  • Hon. Vice-President, the University of Hong Kong - Business Association Advisory Board (HKUSU)
  • Advisor, Hong Kong Baptist University - Association of Commercial & Industrial Studies
  • Advisor, Hong Kong Inter-Tertiary Accountancy Association

Monitoring Hong Kong's Economic Policies and Public Finance

"Effective ways to strengthen the monitoring of public bodies and trading funds must be found. At present, public bodies are still not fully aware of the need for internal monitoring. It is a matter of urgency, therefore, that sound corporate governance be introduced to ensure that these bodies become fully accountable to the public."

Watch Your Public Assets - Legco Report Column, Hong Kong Accountant, July/August 1996

In my March 1996 response to the Budget Speech, I underlined the need for solid and sustained investments to help strengthen Hong Kong's economic foundations. I asked the Government to actively undertake a long term infrastructure investments programme, to foster close co-operation with the business community and to vigorously defend Hong Kong's long term interests overseas.

I also supported initiatives to streamline the tax system, with a view to enhancing business competitiveness, and to lighten, by various concessions, the tax burden of middle class tax-payers. I have initiated many meetings between top Government officials and the Tax, as well as other Committees of the HKSA; we have now become a regular and highly regarded "target" of Government consultations.

I have always made it clear that the accounting profession has an important role to play in the scrutiny of public finance. This was brought sharply into focus by my involvement in the Special Transport Panel. The questions I asked and the subsequent publicity these questions generated raised public awareness and dissatisfaction with poor controls over costs, tendering procedures, as well as the overall lack of transparency in the handling of the West Rail Project. As a result, a Sub-committee was formed and drastic measures were taken by the KCRC to significantly reduce the scale and the costs of the project.

I was also, during this period, elected Chairman of the Public Accounts Committee (PAC). The influential PAC has the important task of overseeing the Director of Audit Reports on Government accounts and value-for-money studies. During the period of my chairmanship, the PAC has significantly raised its public profile and output. At the same time, PAC also gained in stature as a highly professional and hard working Committee capable of delivering well balanced and soundly based conclusions. Our bi-annual reports have enjoyed a level of support that crosses all political party lines at the Legislative Council; it has also gained the respect and co-operation of the Administration.

Main Activities in the Public Finances Business Sector
  • Chairman, Public Accounts Committee of Legco
  • Deputy Chairman, Financial Affairs Panel of Legco
  • Appointed Member, Hong Kong Monetary Authority's Deposit-taking Companies Advisory Committee
  • Appointed Member, Inland Revenue Department User's Committee
  • Appointed Member, The Advisory Committee on Corruption, ICAC
  • Executive Committee Member, Business and Professional Federation of Hong Kong
  • Hon. Advisor, Hong Kong Junior Chamber of Commerce

Promoting Education and the Welfare of the Community

"Another important area for long term investment....must be to improve the skills of our workforce .... The Government should start by investing in our basic educational system and make it first class at ground level."

Response to the 1996 Budget Speech - 27.3.96

The future of our Community relies, to a great extent, on our capacity to provide our youth with the education and skills necessary to cope not only with their professional but also with their personal development.

I am very concerned by the results of a recent survey, which found that 40% of Hong Kong youths considered that money is more important than moral values. I urge the entire community to take serious note of these results. It is our responsibility to uphold the ethics of our young people. Let us not forget that they will determine the values of our future society. I have invited major employers, school heads, senior social workers and the young people themselves to explore programme ideas and to raise awareness of the importance of business ethics. As the Representative of a leading professional body in Hong Kong, I have also made the following appeal to my colleagues: 'Let the support of honesty, integrity, fairness and justice start with us.' (Uphold Your Ethics-Legco Rep Column, The Hong Kong Accountant, Jan/Feb 1996)

I also serve as Chairperson of the Hong Kong Council of Social Service. Most of you know that I have always underlined the need for strong involvement in our Community. I feel that it is my duty, as a responsible citizen, to uphold the principles of law, equality and humanity. I strongly believe in the importance of helping those in need and in helping them to help themselves. During the past two years, considering our budget surpluses, I have strongly advocated moderate increases in public expenditures to help tackle the problems of aggravating structural poverty among the needy. We are responsible problem solvers. We simply cannot remain silent and accept the fact that in affluent Hong Kong, as much as 11% of our population is still destitute.

Main Services in Education and the Community
  • Chairman - Commission on Youth
  • Chairperson - Hong Kong Council of Social Service
  • Chairman - Social Welfare Advisory Committee
  • Vice-Chairman - Independent Police Complaints Council
  • Organising Committee Chairman - ICAC Conference on Work Ethics of Young People
  • Council Member, Hong Kong Polytechnic University
  • Hon. President - Hong Kong Sports Association for the Mentally Handicapped
  • Hon. President - Hong Kong PHAB Association
  • Hon. President - Hong Kong Kindergarten Association
  • Hong Kong Director - International Bureau of Children's Rights
  • Promotor & Director - Hong Kong Gifted Education Foundation

A Vote of Thanks

In conclusion, I would like to thank you, my many accountant friends, for your time, friendship and assistance; you have provided me with the advice and knowledge necessary to broaden the scope of my work and interventions in the Council. Without your help and your continuing support, our many achievements would not have been possible.

Special thanks also go to my advisors who have provided so much help and support in the 1995 elections and over the past two years.

List of advisors

Allan Aw Took Loke
Albert Au Siu Cheung
Alfred Shum Yuk Man
Aloysius Tse Hau Yin
Andrew Ma Chiu Cheung
Angel Yan Yeun Yee
Anthony Wu Ting Yuk
Antonio Chan
Brian Chan Wah Kei
Chan Koon Hung
Chan Sai Hoi
Charles Chan Wai Dune
Chris Hall
Daniel Chiu Yue Ming
Davids Gairns
David Li Ka Fai
David Li Kwok Po
Dudley Harding
Edward Lau Ho Man
Fan Sai Yee
Fanny Lai Ip Po Ping
Francis Lau Mo Kaye
Frederick Kung Chun Fai
Ivan Lau Ho Kit
Jeremy Barr
Jimmy Pun Kwok Wing
John Lee Luen Wai
John Li Kwok Heem
Johathan Leung Kwok Hung
Joseph Cheung Kwok Leung
Josephine Leung York Yee
Keith lam Pui Chaun
Kennedy Liu Tat Yin
Kenneth Lam Yiu Kin
Lee Man Ban
Lui Tim Leung
Marvin Cheung Kin Tung
Michael Chan Kee Huen
Nicholas Baldwin
Norman Yuen Kee Tong
Patrick Paul
Patrick Wong Lung Tak
Paul Chan Mo Po
Paul Phenix
Phileas Fok kwan Wing
Philip Wu Tze Cheung
Ricky Chong Peng Oon
Ricky Wong Wai Pui
Roger Best
Roger Moss
Stephen Lau Sing Hung
Tai Hay Yuen Tom
Chan Kee Sun
William Chan Wai Hei
Wilson Fung Ying Wai
Wong Kai Man

Eric's Biography in Legco : 1995 -1996

Bills Committee

Prevention of Bribery (Miscellaneous Provisions) (No. 2) Bill 1995
Medical Registration (Amendment) (No. 2) Bill 1995
Rehabilitation of Offenders (Amendment) Bill 1995
Inland Revenue (Amendment) (No. 3) Bill 1995
Inland Revenue (Amendment) (No. 4) Bill 1995
Evidence (Amendment) Bill 1996 - Chairman
Bankruptcy (Amendment) Bill 1996
Road Traffic (Amendment) (No. 3) Bill 1995
Eastern Harbour Crossing Road Tunnel (Passage Tax) Bill
Companies (Amendment) Bill 1996

Legco Committees

Finance Committee
Public Accounts Committee - Chairman
Public Works Sub-committee

Sub-committees

Sub-committee on matters relating to the Formation of Parliamentary Friendship Groups
Sub-committee to study the Leveraged Exchange Trading (Calls) Rules
Sub-committee on Legislation for the Mentally Handicapped
Sub-committee on Western Corridor Railway - Member Attending

Panels

Financial Affairs Panel - Deputy Chairman
Administration of Justice and Legal Services Panel
Welfare Services Panel

Eric's Biography in Legco : 1996-1997

Bills Committees

Independent Police Complaints Council Bill
Social Workers Registration Bill
Child Care Centres (Amendment) Bill 1996
Travel Agents (Travel Industry Compensation Fund (Amount of Ex Gratia Payments and Financial Penalty) Rules) (Amendment) Bill 1996
Justices of the Peace Bill
Companies (Amendment) Bill 1996
Bankruptcy (Amendment) Bill 1996
Evidence (Amendment) Bill 1996
Medical Registration (Transitional Provisions) Bill 1996
Mutual Legal Assistance in Criminal Matters Bill
Smoking (Public Health) (Amendment) Bill 1997
Sailors Home and Mission to Seamen Incorporation (Transfer of Undertaking) Bill
Securities and Futures Commission (Amendment) (No. 3) Bill 1996

Legco Committees

Finance Committee
Public Accounts Committee - Chairman
Public Works sub-committee

Sub-committees

Sub-committee on matters relating to the Formation of Parliamentary Friendship Groups
Sub-committee on Western Corridor Railway - Member Attending

Panels

Financial Affairs Panel
Administration of Justice and Legal Services Panel
Welfare Services Panel

Activities Summary : 1995-1997

During the two years I have endeavoured to act conscientiously, attending meetings with dedication and ensuring that the professional voice of Accountants was heard persistently and clearly in the Government.

FORMAL SITTINGS

Year Number of Meetings Present Absent* Percentage
1995-96 40 39 1 97%
1996-97 48 44 4 91%

Note*: Due to attending Preparatory Committee Meetings and HKSA/CICPA Conference in Beijing.

LEGCO QUESTIONS RAISED

Year Oral Questions Written Questions Total
1995-96 3 14 17
1996-97 1 10 11
Total 4 24 28


MEMBERSHIP OF COMMITTEES, WORKING GROUPS AND PANELS

   1995-96 1996-97
Bills Committees 10 13
Legco Committees 3 3
Sub-commitees 4 3
Panels 3 3
Total 20 21

Summary Highlights : 1995 - 1997

1. Prevention of Bribery (Miscellaneous Provisions) (No. 2) Bill 1995
  I voiced concerns with regard to the lack of protection in the confidentiality of tax records. All recommended Committee Stage Amendments to address this concern were subsequently agreed with HKSA before passage of the Bill in July 1996.
2. Inland Revenue (Amendment) (No. 3) Bill 1995
  HKSA concerns with regard to provisions enabling the exchange of confidential taxpayer records in prospective bilateral tax relief arrangements were quickly resolved with the Administration agreeing to Committee Stage Amendments. The Amendments have been designed to severely restrict future disclosures by the Administration of such information to overseas authorities.
3. Inland Revenue (Amendment) (No. 4) Bill 1995
  HKSA strongly opposed this Bill, providing a case for using tax penalties for traffic control purposes, and I have lobbied hard to have it withdrawn. The Administration withheld this bill under persuasion.
4. Securities and Futures Commission (Amendment) (No. 3) Bill 1996
  HKSA strongly opposed this Bill which might raise public expectation and possibly a mistaken perception that auditors of listed companies have a statutory responsibility to detect and report suspected fraud and management irregularities to the Securities and Futures Commission. I have lobbied hard to have the Bill shelved. The Legco House Committee was persuaded not to study the Bill and the Administration has now withheld this Bill under persuasion.
5. Mutual Legal Assistance in Criminal Matters Bill
  This bill intends to supersede the defunct Evidence (Amendment) Bill 1996 which I had successfully blocked earlier. The Bill reintroduces provisions for the exchange of tax information. After strong protests and intense lobbying, extensive amendments providing professional privileges to auditors and tax representatives as well as new provisions to uphold the integrity of the original secrecy provision under the Inland Revenue Ordinance were adopted. HKSA has indicated its satisfaction to this pragmatic approach.
6. Professional Accountants Ordinance
  Some Legco members of the Bills Committee on Subsidiary Legislation planned to introduce fundamental changes e.g. raising the level of compulsory professional liability insurance, to the proposed HKSA package of rules on Incorporation of Accounting Firms. I lobbied hard and explained clearly the underlying principles of our package. All proposed changes were subsequently withdrawn leaving the enactment of the HKSA package completely intact.
7. Special Transport Panel
  My involvement on this panel, the questions I asked and the publicity the attracted, raised public awareness with regard to poor controls over costs, tendering procedures and lack of transparency in the handling of the high-cost West Rail Project. A sub-committee was subsequently formed to follow up on issues raised and this led to major cost reductions.
8. Public Accounts Committee
  The Public Account Committee (PAC) holds the important task of overseeing the reports of the Director of Audit on Government accounts and value-for-money studies. A major move was the motion debate I sponsored, as Chairman of the Committee, on the "Access to Exco Papers': the debate significantly raised public awareness of the accountability of the Administration to the PAC under the existing constitutional arrangements. The motion received overwhelming support from all major political parties and independent legislators alike and the debate attracted numerous positive press comments which contributed to the enhancement of the public image of the PAC and Legco.
9. General
  Several other bills were passed with the blessing of the HKSA including the Orthodox Metropolitanate of Hong Kong and South East Asia Bill that I sponsored as a Private Members Bill at the request of the Church. This was passed in the record time of two weeks.


Eric Li Ka-cheung
10/F, Sun Hung Kai Centre, 30 Harbour Road, Hong Kong
Phone: 2827 8663, Fax: 2827 5086, E-mail: erickcli@ppn.com.hk

 

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