situations. The procedure is based on recommendations made by the Jenkins Committee in the UK in 1962 but recommendations have not yet been enacted as legislation
there.
these
25
Experience with the operation of the section 228A procedure has shown a need for amendments. Consultations with the Registrar General in his capacity as the Official Receiver, the Law Society of Hong Kong and the Hong Kong Society of Accountants have identified some problems with the new procedure eg (a) doubts over the circumstances under which it can be regarded to be "necessary" for the winding up to be commenced under section 228A, (b) the possibility of the appointment of "cowboy" liquidators by unscrupulous directors, (c)
(c) the absence of any requirement to present a notice of appointment of the provisional liquidator to the Registrar of Companies within a certain period,
certain period, and (d) the wide powers of the provisional liquidator.
26
The Standing Committee after careful consideration, recommends that section 228A be amended with а view to clarifying the procedures and the qualifications and powers of the provisional liquidators. Details of the specific recommendations are set out in pages 39 to 46 of the Report.
VIII Directors' duty regarding information to shareholders
27
The question of introducing legislation prohibiting a company from giving price-sensitive information to selected shareholders, which is
is not simultaneously available to the remaining shareholders, was considered at length in the Second Report of the Company Law Revision Committee (April 1973). Draft legislation implementing the recommendations in that Report had to be withdrawn in 1984 as a result of widespread opposition and was subsequently referred to the Standing Committee for consideration.
28
In late 1985, the Standing Committee was aware that a general obligation to supply price-sensitive information by listed companies would be contained in the Securities (Stock Exchange Listing) Rules to be made by the Securities Commission. These listing rules came into operation on 1 February 1986. The Standing Committee considers that these disclosure requirements were significant steps in the right direction, and that it would be
it would be sensible
sensible to make sure that they were effective before considering whether to go further. Consideration of this question will be resumed in due course.
CONFIDENTIAL