Hong Kong's economy has shown some encouraging signs of improvement, but the ongoing Covid-19 pandemic has created inevitable repercussions on the city's employment market. Businesses large and small have engaged in cost reduction in some form or other as their revenue takes a hit.
At a Chamber webinar on 26 August, Michael Szeto, Partner at ONC Lawyers, discussed how companies can balance the rights and interests of both the employer and employees when they need to make tough decision, such as wage reductions and retrenchments. Key employment issues he touched on included whether employers can request employees to take no-pay leave, dismiss employees without reason, or reduce wages or change contractual terms.
Bankruptcies have been rising among businesses of all sizes amid the challenges of Covid-19. from January through to July 2020, there were 5,219 compulsory bankruptcy petitions and 247 compulsory winding-up petitions -- representing year-on-year increases of 13.7% and 5.1% respectively.
At a webinar on 19 April, Desmond Liaw and Ellie Cheung, respectively Partner and Associate at MinterEllison LLP, discussed how directors should go about navigating the challenges of an insolvent company, or one that is likely to become insolvent. In particular, they highlighted the duties and potential personal liabilities of directors, including the potential consequences related to misfeasance, breach of duty or trust in relation to the company, as well as fraudulent trading. They also shared some information about the components of the proposed Companies (Corporate Rescue Bill), which is expected to be presented by the Government to LegCo this year.
Regulatory authorities in Hong Kong typically conduct dawn raids to gather evidence on whether a business or individual has contravened laws such as the Prevention of Bribery Ordinance and the Competition Ordinance. Although such raids are not that common, when they do happen they can have serious and far-ranging implications on business, especially if handled haphazardly and poorly.
At a webinar on 22 February, representatives from Herbert Smith Freehills -- Adelaide Luke, Jeremy Birch and Howard Chan – discussed what happens during a typical raid and how those subjected to dawn raids can best respond. They also shared tips on how businesses can approach complex scenarios, such as resolving privilege disputes with investigators. They also suggested that companies can mitigate the damage of such unannounced visits by taking proactive steps to develop clear guidelines on dealing with dawn raids, forming a dawn raid response team and providing adequate training to staff.
Fraudsters have existed for centuries, and their methods and means for scamming people have evolved alongside changes in society. Digitalisation and post-Covid social distancing norms have especially provided fertile grounds for these scams.
At a webinar on 26 January, Pryderi Diebschlag, Senior Associate at MinterEllison LLP, discussed how businesses can protect themselves from falling prey to fraudulent emails and mitigate the risks in the unfortunate event that they become a victim. He introduced the remedial measures available through the Hong Kong courts, such as the Mareva Injunction and Proprietary Injunction. Diebschlag also shared tips on how to optimise the recovery of funds lost through fraudulent schemes, which include the issuance of a letter of no consent from the Joint Intelligence Financial Unit or the Police.
In 2019, Hong Kong became the first jurisdiction in the Asia Pacific region to pass an annual review conducted by the Financial Action Task Force (FATF) regarding the compliance and effectiveness of anti-money laundering and counter-terrorist financing (AML/CTF) regimes worldwide.
The Hong Kong Government recently launched a public consultation on its plans to introduce a new framework to govern the activities of virtual asset service providers and dealers in precious metals and stones. The aim of this framework is to align Hong Kong’s existing regime with the latest international requirements from the FATF, a global inter-governmental agency.
Eureka Cheung, Principal Assistant Secretary for Financial Services at the Financial Services and the Treasury Bureau; Clara Chiu, Director of Licensing and Head of Fintech Unit, Intermediaries at the Securities and Futures Commission; and Grace Tang, Group Head (Financial Investigation Group), Syndicate Crimes Investigation Bureau from the Customs and Excise Department, explained the details of the consultation exercise at a webinar on 8 January, and took questions from members about the proposed changes.