Targeting Link

(Next Magazine, 2016/6/23, A002, Second Opinion, Bill Stacey)

Targeting Link

A powerful US political aspirant does not like reports about him in the Washington Post. He threatens its proprietor’s separately listed company, Amazon Inc., with antitrust action and official scrutiny. Many will think Donald Trump to be out of line, but it is worth being specific about just why he is wrong. In Hong Kong the trump card of government power is also used as a threat. In our case, under attack, for the time being anyway, is a listed company – Link – not a newspaper.

Our Chief Secretary Carrie Lam allegedly regards Link as one of “three mountains”, (the other two being the MTR and MPF), for the government to level off. It is reported that she would encourage the new Competition Commission to pay attention to the issues of public concern involving the company, or look to other legal options in contracts that the company has with the government. She reportedly promises to bring to bear the government’s resources to tackle the political inconvenience of high rents.

The motive for singling out Link is apparently political. Rental reversions and changes to some of its malls have been controversial, albeit with the loudest complaints often having a competitive and commercial interest behind them. It should be noted that Link is far from being the only landlord that has raised rents, and the occupancy rates of its malls, as well as sales in its stores, are rising, against the wider trend of decline. More political attention is no reason for the administration to single it out from among other landlords. We do not and should not have rent controls, which are a recipe for under investment and decay of properties.

If there are public policy issues from higher rents, they should be addressed by a three-pronged approach focusing on land supply, regulation, and use. Market players simply respond to demand, supply, and costs of providing retail space. They know that their tenants need to be profitable and shoppers should enjoy an appealing experience.A government that lays the blame of rising rents on companies that follow market trends is like the dictator in Venezuela blaming capitalists for higher prices. All that they achieve is less supply, longer queues, and burgeoning black markets.

By singling out Link, the government may encourage it to manage its properties differently, defer contracting out of some management, and delay rental increases. That might win the government some brownie points at the cost of shareholders and customers, just as Trump might silence some critics and gain temporary political advantage. However, in the process, both have trashed the rule of law for some short-term gain.

Such political games fatally undermine the separation of powers. The law cannot be a tool for officials to wield against targets chosen for electoral advantage, but must be applied universally and equitably. Administrative officials should administrate. Elected or appointed policymakers should make policy. Their job is not to decide which legal cases should be pursued. If they believe a law should change, they should propose a new law and legislate accordingly. Prosecutors, police, and the judiciary have specific roles that policymakers should not impinge on.Equality under the law is an essential principle upholding our liberties. Similar actions by similar Individuals and companies should be treated equally by law, rather than one company being singled out for attention to be made an example of. Due process rights are thrown out the window when the highest office holders in the land instruct officials, in Link’s case, the supposedly independent Competition Commission, on whom their targets should be.

I have seen in Carrie Lam the best of the traditions of our civil service. I sincerely hope that the reports of her recent words behind closed doors are a misrepresentation.

Bill Stacey

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