The answer is NO, so exactly what laws were broken? It really is essentially USAB in a nutshell.
Well then Flaps, can you explain why that standing practice has come to a grinding halt then? I can't explain why it is the way it is, except for maybe that each country is trying to protect their residents. I agree with your argument, but there is the way the world should be and the way that it is.
Using your example, Cathay could base itself in Manila, and claim that we are all just simply "internally based" (to borrow your term) in HKG. Then they would not need an employment visa, as well as not having to pay expatriate benefits. They could just roster you to start and end trips in HKG.
I'm sure the HK authorities would not allow that. It is viewed as trying to circumvent immigration and tax laws, and governments don't appreciate it. Sometimes, they look the other way - as in when the jobs offer such poor pay that legal workers won't accept them. But it is illegal.
For crying out loud I am starting to spend more time in India then Hong Kong with these wonderful Airbus rosters . Do I now have to apply for an Indian employment VISA???
While funny, clearly you see the difference in that you are not based in India. If your trips were starting and ending in India I can guarantee you that the DGCA would certainly want to talk to you and Cathay. Not only would you need a work visa but you would need to get your license validated there and converted (which I guess is just a matter of paying off the right people these days.
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So clearly, two different scenarios. I agree with you in principle, but I don't write the laws.
