LC Paper No. CB(1) 1606/98-99(01)

Information Note for the LegCo Panel on Public Service Meeting on 29 June 1999

Review of Declaration System of Investments/Interests with reference to the case of Commissioner of Inland Revenue


The purpose of this Note is to inform Members on -

  1. the existing system for declaration of investments by civil servants; and

  2. the case concerning Mr WONG Ho-sang, Commissioner of Inland Revenue.
Existing Position

2. A comprehensive review of the declaration system was conducted last year. A revised system and a number of amendments to relevant Civil Service Regulations were introduced to rationalise the declaration arrangements and to clarify related rules after consultation including with the ICAC, the Department of Justice, the Departmental Management and the staff side of the Central Consultative Councils.

3. A number of briefing sessions were also organised to brief officers at the management position on the revised rules to ensure that there is good understanding on the rationale of the declaration system and the practical arrangements. In addition, a guidebook on good behaviour for civil servants was published to promote understanding of the high standards of conduct expected of them.

4. Under the existing system (details contained in a CSB Circular No. 8/98), there are two tiers of officers -

  1. Tier I : This consists of 26 key posts of government officials; and

  2. Tier II : This consists of 2,884 officers including all directorate posts (1,386) and non-directorate posts (1,498) designated by Bureau Secretaries or Heads of Departments, on the basis of a risk of exposure to conflict of interest situations.
5. The post of the Commissioner of Inland Revenue belongs to Tier II.

6. Both Tiers I and II officers are required to report all their investments in and outside Hong Kong. In Tier I cases, such report is made on an annual basis and they are further required to register their financial interests for public inspection.

7. In Tier II cases, declaration of investments on the following are required to be made on appointment and biennially -

  1. their investments in and outside Hong Kong;

  2. occupation of their spouses; and

  3. any single investment transaction equivalent to or exceeding HK$200,000, or 3 months' salary, whichever is the less, within seven days of the transaction between the biennial declarations.
8. All designated officers are reminded that they should consider carefully, before acquiring any private investment or other interest, whether this could lead to a real or an apparent conflict with their official duties. The word "investment" means any investment, shareholding, or direct or indirect interest in any company or undertaking, and any interest in land or building (including self-occupied property) in or outside Hong Kong.

9. Some important features of the declaration system are -

  1. The onus of reporting any conflict of interests situations rests with individual officers. Designated officers are required to report any possible conflict of interest to their supervisors. If in doubt, they should consult their supervisors/Departmental Management/Civil Service Bureau.

  2. CSB encourages Bureaux and Departments to draw up supplementary declaration requirements specific to their operation needs. So far, 23 departments have issued such additional guidelines covering a total of some 46,000 posts.

  3. Bureau Secretaries and Heads of Departments have authority to require an officer to divest any or some of his investments, refrain from acquiring or disposing of the investments or place the investments in a blind trust. So far, some 11 such management actions were carried out.
Mr. WONG Ho Sang

10. There have been recent reports about Mr. WONG Ho-sang, the Commissioner of Inland Revenue (CIR) and his investment. CSB has looked into their records and interviewed Mr WONG.

11. According to available records, it does not appear that Mr WONG Ho-sang, CIR, had declared his investment in J. Enterprise Agency Ltd. despite the requirement under CSB Circular No. 8/98. Furthermore, according to available records, it does not appear that Mr WONG has made any report to Secretary for the Treasury, his current supervisor, about any potential conflict of interest arising from J. Enterprise Secretarial and Taxation Ltd., which is owned by his wife.

12. Although up to this moment, we have no reason to believe that any conflict of interest has in fact arisen or that the due collection of public moneys has been put at risk. In order to reassure the public, the Chief Executive has requested the Director of Audit to examine the files submitted or represented by J. Enterprise Secretarial and Taxation Ltd. to see whether any has been dealt with personally by Mr WONG since April 1996. The Chief Executive has requested the Director of Audit to satisfy himself that the relevant Ordinances and internal directions and instructions have been duly observed. The Director of Audit has agreed and undertakes to complete the examination within one month for submission of a report to the Chief Executive.

13. Mr WONG has agreed to take leave with effect from 24 June 1999. Mrs Agnes SIN LAW Yuk-lin, Deputy Commissioner of Inland Revenue, will act as Commissioner of Inland Revenue.

Other Initiatives

14. CSB has been working closely with Heads of Department and the ICAC to promote a Civil Service Integrity Programme. The Programme commenced in December 1998 and is targeted at three levels -

  1. Central - CSB is reviewing, updating and consolidating central guidelines on conflict of interest to ensure their adequacy and clarity.

  2. Departmental - to assist 20 departments in drawing up supplementary guidelines on avoidance of conflict of interest situations specific to departmental operations.

  3. Service wide - to raise awareness of the standard of integrity expected of a civil servant, training courses are organised. Since April this year, 104 training sessions for civil servants had been held.
Way Forward

15. The examination of Director of Audit is underway and it is not appropriate to speculate on the outcome as this may prejudice the deliberation of further actions on the case.

16 As regards the system on the declaration of investment of civil servants, a thorough review has been completed resulting in the revised rules promulgated in September 1998. The rules set out clear requirements on the scope of report, possible management action upon receipt of reports which may cause conflict of interest with the officers' official duties, and the sanction of disciplinary action when officers fail to comply with the declaration requirements. The Administration is vigilant to uphold the standard of integrity of the civil service. It continues to monitor the implementation of its rules on conduct and timely updating will be made where necessary and appropriate to ensure they remain effective.

Civil Service Bureau
28 June 1999