1.1
1.2
PART 11 INTRODUCTION
Nature and Purpose of the Code
is
to
provide guidelines for Hong Kong which wish to purchase
The object of the Code public companies in their own shares.
The Code is framed so far as possible in non-technical language and should not be interpreted as if it were a statute.
The provisions of the Code fall into two categories. First, there are General Principles of conduct to be observed in share repurchase transactions. These are a codification of good standards of commercial behaviour and are to have universal application. Second, the Code lays down A series of rules. Some are no more than examples of the application of the General Principles and will be interpreted in accordance with the General Principles. others are rules of procedure, designed to govern specific types of share repurchases. Accordingly, the Code, through the General Principles, may apply to a situation not specifically covered by a rule.
The Code is not concerned with the financial or advantages or disadvantages of a share program.
These are matters for the company
commercial
repurchase
and its shareholders.
The Code is to be read in conjunction with the Hong Kong Code on Takeovers and Mergers (the "Takeovers Code") and it is to be interpreted in the light of decisions and rulings that have been made by the Committee on Takeovers and Mergers (the "Takeovers Committee"). Without limiting the generality of the foregoing the disciplinary rules and procedures applicable to a breach of the Takeovers Code shall
apply to a breach of the Code mutatis mutandis.
Application of the Code
The Code applies to all public companies in Hong Kong. Private companies are exempt from these provisions. The Chairman will normally grant a vaiver from the requirements of the Code for companies with a primary listing outside Hong Kong provided shareholders in Hong Kong are adequately protected.
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