Global Business

When Accountants Go to War

In Hong Kong, the battle has been fierce between the legislature and the city's CPA organization.
Jennifer LeeDecember 27, 2006

Accountants make up one of the largest functional constituencies—professional representation in the legislature—in Hong Kong. At 26,000 members, though, it has, like the other constituencies, one representative. That Legislative Council (Legco) representative is elected, and the election that put the accountants’ current rep, Mandy Tam Heung-man, into the position in September 2004 was a hotly contested one, with a record nine candidates. In the end she beat Paul Chan Mo-po, president of the governing council of the Hong Kong Institute of Certified Public Accountants (HKICPA), by the slim margin of 37 votes.

That narrow victory set the stage for one of the most divisive relationships between legislator and constituency ever seen in Hong Kong’s short election history. And, since there is no provision in Hong Kong’s Basic Law stipulating the obligations a professional group has to its Legco representative or vice versa, the situation continued to worsen until Tam and the HKICPA exchanged open letters criticizing each other in the press, and the HKICPA announced that it would no longer send Tam’s newsletter to its members. The HKICPA is Tam’s only means of accessing her constituency, but for those who had already signed up to receive her information directly.

From the first, the two sides clashed over Tam’s newsletters with a debate over the cost of including them with the HKICPA’s own mailings. (The HKICPA had included the mailings of her predecessor, Eric Li.) But soon the debate turned to the newsletters’ content, which concerned the HKICPA as being too “political”. It began issuing a disclaimer that the statements made in Tam’s newsletter were not those of the accounting body.

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Tam has been an outspoken member of the legislature. When the government’s constitutional reform package was to be proposed in December 2005, Tam came out against it, saying that it did not offer a concrete enough plan for universal suffrage. Before the vote, her newsletter on the issue mysteriously missed being included in the HKICPA’s mailing (both sides have a different story as to how this happened). The HKICPA issued a two-question survey on the package, which showed that of 2,697 members, 53.9% were in favor of it. Tam voted against the package, arguing that the survey was not broad enough. She was lambasted for not representing her constituents.

The following August 2006 Tam conducted her own survey on the general sales tax (GST), sent to HKICPA members via her newsletter. While noting that the results were “interim”, she told a Legco meeting October 18 that 60% of accountant respondents were against the GST. But the meager response rate of just 1.2%, or 311 responses out of the 26,000, bared her to more criticism. The HKICPA’s long-time stance has been that GST is a good way to broaden Hong Kong’s tax base, an opinion that was largely ignored in favor of public sentiment when the government chose to drop the GST in early December.

For the HKICPA, the final straw came when Tam wrote in a column in the Hong Kong Economic Journal that the accounting group’s qualification program was too difficult, and that it was scaring off young graduates. In October, 21 council members out of 23 voted in favor of severing the institute’s relationship with Tam. It won’t send her newsletter to its members anymore, though it has put her contact information on its newsletters and website.

Tam isn’t letting it pass. She has sent letters to the Office of the Privacy Commission for Personal Data (protection of the HKICPA’s member list was the reason cited for refusing to send the newsletter); the Electoral Affairs Commission (which claimed the issue is out of its purview); and most recently raised the issue in Legco, which responded November 22 that professional bodies have the right to determine how their lists should be used.

Score one for the HKICPA, but this is undoubtedly not the end of the feud. Tam has nearly two years left of her four-year term. What will she do without the backing of or even access to her constituency? Or perhaps, more importantly, what will the accountants do without their voice in Legco?

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