Gov’t’s efficiency in doubt as Commercial Code revision comes late

Friday, April 3, 2009
Issue 660, Page 3
Word count: 420
Published in: Macau Daily Times

By Poyi (Natalie) Leung

The government proposes to revise the Commercial Code in order to boost business operations flexibility, enhance corporate governance and also allow the application of modern information technologies amid the socio-economic growth in Macau.

Chief of the Legal Reform Office Chu Lam Lam and several other government officials presented the bill to the Legislative Assembly yesterday.

It was passed in its first reading but some lawmakers questioned the government’s efficiency as the public consultation was carried out four years ago.

Among the proposed changes, the government suggests to exempt new companies from providing a lawyer statement if their setting up process is handled by a public notary.

Between shareholders’ general meetings the 15-day interval is proposed to cut down to seven days in a bid to increase “flexibility and efficiency.”

In addition, board of directors could be formed in even numbers.

The bill also proposes to allow electronic documents or electronic signatures to replace the use of hard copies, but both forms shall bear the same legal effects.

The current Commercial Code regulates that shareholders, administrative organs and board of supervisors meetings must be held in the company’s office or other venues in Macau.

However, in face of the establishment of cross-regional firms and advancement of information technologies, the government wishes to allow the above meetings to be held by video conferences or other kinds of long-distance data transmission methods.

Also, the bill proposes to give shareholders permission not only to access minutes of shareholders and administrative committees’ meetings, but also those of the board of supervisors.

Chu said the greater right of information to shareholders was to make companies’ management “more transparent and effective, as well as to protect minority shareholders’ rights and interests”.

Lawmaker Chui Sai Cheong inquired the government officials into why no consultation was conducted with the Chinese Chamber of Commerce or professionals from other business sectors such as accountants, bankers and lawyers who always had to work closely with the Commercial Code.

The legal reform chief responded that the first round of public consultation was held in 2005, followed by in 2007, and in which the Chinese Chamber of Commerce, judges, legal advisers, auditors, insurance practitioners, and bankers were invited to give opinions about the proposed revision.

However, Tsui Wai Kwan doubted whether the opinions made four years ago would still meet the ever-changing business and commercial environment in Macau.

Legislative Assembly president Susana Chou also criticised the government for having taken four years on a consultation and only in 2009 could the bill be presented.

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1 Comment »

  1. euandus Said:

    I argue that reforms are needed because execs have too much power over corp governance. Ironically, the reforms would bring corps closer to the public interest. Anyway, I’ve just posted on it. If you are interested, you might check out the following: http://skipworden.wordpress.com/2009/10/24/corporate-partisanship-eclipsing-the-public-interest/


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