S.H. Goo

Can China Develop a Viable Cross-Border Securitization Market?

The past year has seen a dramatic pick-up on domestic securitizations in the People’s Republic of China (PRC). This article provides an overview of the two main government-sponsored securitization schemes in the PRC—one administered by the China Bank Regulatory Commission (CBRC), the other administered by the China Securities Regulatory Commission (CSRC). The article mainly focuses on the legal, regulatory, constitutional, and other issues that must be addressed before a viable public cross-border securitization market out of China can be developed. As with many financial initiatives in China, the CBRC and CSRC schemes are fairly new, and as such untested or inadequately tested in PRC courts. Moreover, the CBRC and CSRC regulations are administrative regulations and not statutory law. Concepts such as legal isolation, commingling, and bankruptcy remoteness as they apply to securitizations are new to this market and untested in its courts. From a legal point of view, the single best thing that could happen for a securitization market to develop in China, for both domestic and cross-border transactions, is for the National People’s Congress (NPC) to enact a securitization statute as other civil law jurisdictions in Asia, such as Korea, have done.

Corporate governance and its reform in Hong Kong: a study in comparative corporate governance

Purpose – The purpose of this paper was to determine to what extent Hong Kong’s experience proves (or disproves) theories from corporate governance in the areas of family ownership, concentration, self-dealing in Hong, executive compensation and other issues. This paper – written in the comparative corporate governance tradition – uses data from Hong Kong to discuss wider trends and issues in the corporate governance literature. Design/methodology/approach – The authors use the comparative corporate governance approach – exposing a range of corporate governance theories to the light of Hong Kong data. The authors purposely avoid over-theorising – leaving the data to speak for themselves for other researchers interested in such theorising. Findings – The authors find that Hong Kong presents corporate challenges that are unique among upper-income jurisdictions – in terms of potentially harmful (shareholder value diminishing) family relationships, shareholder concentration and self-dealing by insiders. The a...

The Value of the Corporate Governance Canon on Chinese Companies

China has yet to import the corporate governance ‘canon’ (generally accepted rules as promoting share-holder value as well as minority shareholder and other stakeholders’ rights) into its Code of C...

The issue of enforcement in Chinese corporate governance

Purpose – The purpose of this paper is to discuss two important aspects of enforcement of ethical standards: indirect enforcement, that is the Confucian approach, and common law enforcement. In the context of Confucianism, one must adopt the ethical teachings in a moderate or “middle” way. We should not be too attached to the liberal interpretation of the Confucian texts but must have the wisdom to apply the concepts case-by-case. The issue then is if there are no legal consequences or punishment, then how we can ensure that someone will continue to comply with the standards. Design/methodology/approach – The authors analyze the Confucian texts in relation to the enforcement of the ethical standards. The authors investigate the Entity Maximization and Sustainability Model by referring to the exit option, the voice option, the influence exerted on the board of directors, the sending of the Confucian representatives to sit on the board of directors, the oppression remedy and statutory derivative actions. Th...

Directors' Duties in the Context of Confucianism

Purpose – The purpose of this paper is to demonstrate how Confucianism can be applied in the areas that are now governed by company law in the common law system and how it can play a role in improving corporate governance. A gentleman in the context of Confucianism tends to be inclusive and broad-minded in embracing the interest of different stakeholders. In fact, he will balance the interests of shareholders and other stakeholders if there is any inherent conflict and try to achieve a win-win situation. Ultimately, he will run the company not just for profit-making but for social justice and commitment. Design/methodology/approach – The authors examine the leading cases in Hong Kong and the United Kingdom about the law of fiduciary duty and the duty of care and its relationship with Confucianism. In this respect, we review the teachings of the traditional Confucian texts and use Confucianism to fill in the gap where common law rules cannot reach. In addition, we adopt a comparative study approach in exam...