The Unmotivated HK Taxman

Hong Kong has a number of individuals and entities listed in these documents

Since the Panama Papers have revealed a number of individuals and entities from Hong Kong -- 26,000 of them or 7 percent of the total 366,000 overseas shell companies, the Hong Kong government doesn't seem to be outraged.

Development minister Paul Chan is one of them...

Some of them are even in Leung Chun-ying's own administration -- development minister Paul Chan Mo-po, and Executive Council member Bernard Chan. Others include failed chief executive contender Henry Tang Yin-yen, several lawmakers like Michael Tien Puk-sun and Paul Tse Wai-chun, the Kwok brothers, Raymond, Thomas and Walter, who run Sun Hung Kai Properties, and action star Jackie Chan.

Only accountancy lawmaker Kenneth Leung is sounding the alarm, saying the revelations are shocking and has urged the tax authorities to follow up.

But probably even more outrageous is the laid-back attitude of the Inland Revenue Department. The commissioner Wong Kuen-fai said the department would follow up, but said that not all off-shore firms are involved in tax evasion.

Would it not hurt to just check?

... so is Executive Council member Bernard Chan...

In the past five years, reports of evasion and avoidance have increased 25 percent to 1,900 cases, but the number of probes by the Inland Revenue Department fell from 1,920 to 1,800.

There are also fewer investigators working on cases, from 257 in 2001-2002 to 240 in 2014-2015, but strangely the budget for the department has jumped in the same period from HK$168.6 million to HK$213 million.

With the revelations of Hong Kong having so many off-shore companies set up by Mossack Fonseca, one would think the authorities would like to clean house and also try to get more taxes the city is entitled to.

Will Inland Revenue investigate possible cases of tax evasion?

But no, the Inland Revenue Department doesn't seem to care much, if at all... why investigate their bosses and powerful tycoons?

If one wants to find a sign of Hong Kong declining, that's one of them. Why even bother having rule of law at all if people with the means aren't enforcing them?

Generating Shock News

Li Xiaolin suddenly resigned from a nuclear power company yesterday

When I lived in Beijing, the government under then President Hu Jintao and Premier Wen Jiabao tried to merge various state enterprises together to make them more efficient.

However, the biggest problem was at the top, where the leaders of each company would refuse to budge, ie step down, and so each continued ruling their own companies like fiefdoms.

That led to further stagnation, overproduction, and stock prices sinking.

But there is some light at the end of the tunnel, starting with Li Xiaolin, daughter of former Premier Li Peng.

On December 30, a deal was struck between China Power New Energy Development and State Nuclear Power Technology Company involving the payment of shares and cash for the latter's assets.

Li in Roberto Cavalli coat worth 35K yuan

The restructuring was engineered by the State Assets Supervision and Administration Commission.

Up until yesterday she was chairwoman of China Power International Development, a sister company of China Power New Energy Development.

Li, 54, was also vice-president of China Power Investment Corporation, working there for 12 years. But in July, CPI merged with State Nuclear Power Technology to become State Power Investment Group, and there was no announcement of her having any role in the new entity.

The news shocked those in the industry who assumed Li would lead State Power Investment Group because of her background.

However she was recently transferred to China Datang Corporation, a large state-owned enterprise focused on power generation.

But even more interesting -- because she had to resign from China Power New Energy Development, shares of the company jumped 19.35 percent on the Hong Kong stock exchange to HK$0.74. It was previously at HK$0.60.

The resignation also paves the way for the new boss, Wang Binghua to finally make some changes, such as set up a back-door listing in order to publicly trade the country's nuclear power assets.

No longer the "power queen", Li will have to be content in a somewhat respectable job, but with much less influence than before.

Perhaps this might have something to do with a report that came out last January by the International Consortium of Investigative Journalists. The group found Li was director of two companies, Tianwo Holdings and Tianwo Development that were set up in the British Virgin Islands, a well-known tax haven.

The report contended that Li and many other close relatives of current and former leaders had funneled so much illicit capital that it had a severe impact on China's economy and contributed to the widening wealth gap and corruption.

And how did Chinese state media report on Li's sudden departure of China Power New Energy Development?

China Radio International said she resigned "due to her work schedule" with no further details...