Lawmakers yesterday criticised the government for taking too long in its plan to reform the Companies Ordinance and urged quicker action to bring Hong Kong into line with other markets.
Secretary for Financial Services and the Treasury Frederick Ma Si-hang told legislators on a financial affairs panel that it would need at least five years to rewrite the ordinance, which was last reviewed in 1984.
The changes to legislation essentially derived from the UK Companies Act first enacted in 1865 are expected to cost the government about $100 million.
The timetable includes two years for preparing a White Bill to be released for six months' consultation in May 2007. The bill will then be introduced for Legco debate in October 2008, with a scrutiny period lasting at least 18 months.
'The rewrite of the Companies Ordinance would be able to update the law and to save money for companies as it would amend the provisions to allow the firms to use electronic file submitting and to improve provision related to corporate governance,' Mr Ma said.
The legislators supported the reform, which they said was urgent to allow local company law to match overseas counterparts. Some countries such as Britain, Australia, New Zealand and Singapore had started the updating process years ago.
Frontier legislator Emily Lau Wing-hing doubted the government could finish the rewrite by 2010 as planned. 'The law is so complicated that it may take several years of debate. It may end up we may only have a new company law by 2012 or 2015,' she said.
Legislator Ronny Tong Ka-wah, a barrister, also said some provisions of current Companies Ordinance were outdated.
'Sometimes we need to refer to the section of Companies Ordinance dated in 1948,' he said.
Proposed changes include reforming capital maintenance provisions and modernising the statutory language, and would enable wider use of electronic communications.