Directors' Right of Inspection of Company Records
Statutory Right
Under section 374(1)(b) of the Companies Ordinance (Cap. 622), directors are entitled to inspect company accounting records at all times without charge.
It is an offence for a director of a company who has failed to take all reasonable steps to secure compliance with s 374 (1)(b), and is liable to a fine of HK$300,000.
Further, a director of a company who wilfully fails to take all reasonable steps to secure compliance with s 374 (1)(b) commits an offence, and is liable to a fine of HK$300,000 and 12 months’ imprisonment.
In addition to the statutory right, a director also has common law rights (i.e. under case law) of inspection of accounting records of the company.
Common Law Right
The common law right is wider than the right of inspection provided for under section 374(1)(b) of the Companies Ordinance as it is not restricted to accounting records.
In Tsai Shao Chung v Asia Television Ltd., the Court of Appeal held that the scope of inspection of director can include any documents belonging to the company, corporate materials, corporate records and accounts, corporate information and accounting and other records of the company which could reasonably regard as being likely to assist the director in carrying out his or her duties as a director.
For legal services and advice on corporate and commercial matters, please contact Chow & Cheung, Hong Kong Solicitors & Notary public [E-mail：cac@ccsn.hk / Tel: +852 2856 3078].
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