Stringent check on prince could have ‘offended’ other investors, sources say
Natalie Wong, Kahon Chan Lilian Cheng
A stringent background check by the Hong Kong government on a Dubai prince launching a US$500 million family office in the city could have “potentially offended” other overseas investors and undermined the financial hub’s reputation for welcoming business opportunities, three senior officials involved in the matter have told the Post.
The officials yesterday stressed the government welcomed potential investment from Sheikh Ali Rashed Ali Saeed Al Maktoum and other Middle Eastern businesspeople, while also acknowledging the need for the administration to be “more sensitive and prudent” in avoiding any unnecessary controversies.
The Post earlier cited sources as saying the 28-year-old prince from the United Arab Emirates (UAE), who had been described by some media as “the nephew” of the Dubai ruler, was from a “distant branch” of the ruling sheikh’s family. The Post also exclusively reported the prince had an alter ego as a singer-songwriter known as Alira who had carved out a sizeable following in the Philippines.
“Due diligence needs to be proportionate. If the background checks were overly stringent, this could offend [Maktoum] and other potential investors,” one government insider told the Post.
“We need a better balancing act between maintaining the city’s image that ‘Hong Kong opens its door widely to all business opportunities’ and preventing anyone from exploiting controversies to tarnish the government’s reputation.”
Scrutinising the prince’s past was not required as he had no involvement in projects involving public funds at this point, the source added.
Maktoum’s ambitious US$500 million family office plan attracted considerable interest from the business sector, but some said they could find little public information about him or his investment track record.
Some residents took to social media to accuse the government of failing to sufficiently vet the Emirati’s family background and his financial history before inviting him to Hong Kong and escorting him to meet Chief Executive John Lee Ka-chiu last week.
The government insider said staff at the economic and trade office in Dubai had already carried out “basic background checks” on the royal identity of the Emirati by liaising with UAE officials before the prince came to Hong Kong.
“We couldn’t blame overseas colleagues for finding no clues about [the prince’s] showbiz history and his fan base in the Philippines,” he said.
The Chief Executive’s Office yesterday confirmed the sheikh was one of the 30 guests he met last Tuesday to exchange views on the strengths of setting up family offices in Hong Kong. Lee also hosted a dinner that night to welcome visiting participants of a summit.
The insider added the government normally only conducted basic checks of people using online searches so officials would have basic knowledge of the individuals they were meeting. But the process could be improved, the source conceded.
Maktoum’s family office announced on Wednesday last week that it was postponing the inauguration ceremony originally scheduled for March 28, citing “some urgent unexpected private matters” that required the sheikh’s attention. The event would instead take place in late May, while the office repeated the prince’s commitment to press ahead with the plan in three separate statements in the past week.
A second insider said the government still anticipated the Emirati’s return as “a potential investor” but did not promise whether officials would attend any future events hosted by the prince’s private office.
He acknowledged that the presence of high-ranking officials at such events could demonstrate official support of the family office sector, but authorities were also mindful of avoiding any “undesirable impression” that they favoured any particular business.
According to an invitation to the sheikh’s postponed inauguration ceremony obtained by the Post, government officials were supposed to speak before the office unveiled “cooperation partners and investment projects”. The invitation was extended to various parties by the Hong KongMiddle East Business Chamber.
Director General of Investment Promotion Alpha Lau Hai-suen had been invited to attend on behalf of the government, the Post learned. She heads InvestHK, the government department which co-organised the Wealth for Good in Hong Kong Summit the prince attended.
The third source said if any officials promised to attend the inauguration, the head of InvestHK would be the most appropriate as it would be unfair to other family offices to send one top official to only one particular ceremony but not the others.
We couldn’t blame overseas colleagues for finding no clues about [the prince’s] showbiz history HONG KONG GOVERNMENT SOURCE