The press release below is issued on behalf of the Governance Sub-Committee of the Exchange Fund Advisory Committee:
There have been public concerns, triggered by recent media reports, about whether there was any conflict of interest issue in the two property transactions by Mr James Lau, former Executive Director of the Hong Kong Monetary Authority (“HKMA”), shortly before the HKMA’s announcement of macro-prudential measures for property mortgage loans on 13 August 2010. The Governance Sub-Committee (“GSC”) of the Exchange Fund Advisory Committee decided to look into the case. A task force comprising three GSC members was set up to look into the case and report to the GSC. The task force has completed its review and reported its findings to the GSC accordingly. Having considered and discussed the findings, the GSC has published the subject report today (see Annex).
Professor Lawrence J. Lau, Chairman of the GSC said, “The GSC attaches great importance to the public concerns about the case. We see the need to look into the matter and give a proper account. I thank the members of the GSC for examining a large volume of documents within a short period of time and collecting detailed information from the Management of the HKMA and Mr James Lau. The GSC is of the view that the available evidence suggests Mr Lau did not participate in the formulation of the HKMA’s tightening measures and had no prior knowledge of the measures when deciding to purchase the two properties and, accordingly, there does not appear to be a conflict of interest issue in this case. However, Mr Lau had not declared the mortgage loans as required by the HKMA rules. The GSC considers that given the senior position held by Mr Lau in the HKMA and the Hong Kong Mortgage Corporation, he has not had the sensitivity and taken the care to understand and comply with the relevant declaration requirements for taking out mortgage loans.”
Professor Lau said, “I hope the publication of the report today can help dispel any doubt regarding the case. I would also thank the HKMA for its assistance in facilitating the GSC’s review work.”
The GSC of the Exchange Fund Advisory Committee comprises independent members from the community. Its main function is to monitor the HKMA’s performance, governance arrangements, resource deployment, and appointment of senior personnel.
Governance Sub-Committee of the Exchange Fund Advisory Committee
29 July 2016