Corporate governance through disclosure: Inspection of company records by shareholders in Hong Kong

Abstract

The Hong Kong court passed the first order allowing inspection of company records under section 152FA of the Companies Ordinance (Cap. 32) in August 2011. This has triggered shareholders‘ interest in inspecting company records to investigate mismanagement which they have suspicion. Although the legislation providing for such right of inspect was enacted in 2005, the Hong Kong courts have only discussed this statutory right on a few occasions. Nevertheless, a significant amount of court jurisprudence is available for its counterparts in Australia and the United States. This article aims to provide a comparative analysis of section 152FA with the corresponding law in Australia and the United States, in particular the requirements of ‗good faith‘ and ‗proper purpose‘ under section 152FA(3), and to discuss its potential impact on corporate governance in Hong Kong.