Defying Alibaba was to HK credit in maintaining the rule of law
Updated: 2013-10-17 07:06
By Hong Liang(HK Edition)
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In a rare show of guts, the Hong Kong government has told mainland e-commerce giant Alibaba to get lost if it can't cope with Hong Kong's listing rules.
Both the Securities and Exchanges Commission and Hong Kong Exchanges & Clearing Ltd have made it clear that Hong Kong will not entertain the idea of bending its rules for Alibaba, or any other company, for that matter. The government has made similar comments on more than one occasion.
In an obvious attempt to embarrass Hong Kong, Alibaba CEO Jonathan Lu picked international news agency Reuters to air his displeasure, blaming the Hong Kong authorities for their lack of knowledge about Internet enterprises and declared that his company will be seeking a listing elsewhere, probably the United States. To this, all we can say is good for him and his company.
Hong Kong stands to gain much more by spurning Alibaba than the prospective income and questionable publicity it might have derived from caving in. By steadfastly refusing to compromise, Hong Kong has reaffirmed its unwavering commitment to upholding the rule of law, which is the single most important advantage that propelled the city to the rank of global financial center.
Outsiders may, from time to time have doubts, about the governance of Hong Kong. That's not surprising as the Hong Kong government is never too popular and its legislature is sometimes seen to be utterly dysfunctional. But the public trust in Hong Kong's judiciary in dispensing justice fairly and equitably is seldom questioned.
There were rare occasions when the enforcement arm of the law was seen to be unduly influenced by politics. The perceived collusion between government and big businesses, especially the large property developers, is always suspected by critics to have the effect of perverting justice.
But the high respect people have for the impartial courts of Hong Kong has remained undiminished. Neither the government nor powerful businesses are seen to enjoy any special privileges in the courtroom. And Hong Kong courts are never too afraid to hear cases against powerful interests in business and politics.
Alibaba's management obviously finds the Hong Kong regulatory environment based on the rule of law is too much of a constraint on its actions. It's therefore well-advised to take its listing elsewhere.
Losing Alibaba under such circumstances is not going to have any significant long-lasting impact on Hong Kong's status as an international financial center. Instead, it will further enhance Hong Kong's reputation as a well-regulated level playing field where transparency and consistency is assured.
Many Hong Kong politicians and business leaders have repeatedly stressed the importance of economic integration with the mainland. It's hard to know exactly what they meant by integration. But more and more people are beginning to realize that the pursuit of "integration" must not be carried out at the expense of the fundamental elements that make Hong Kong special.
If Alibaba, or any other company, wants to play, it must play according to the rules. That's what makes Hong Kong special.
The author is a veteran current affairs commentator.
(HK Edition 10/17/2013 page1)