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Can you show any item in the balance sheet by which anybody reading the balance sheet for information could deduce the
fact that the bank premises were mortgaged to the Hongkong University for $150,000 ? (Ex. NIB 8 shown to witness) It says here "Specialty Debt".
That may mean any debt under seal ? "Specialty Debt" is the phrase your Registrar used in commection with mortgages.
It does not say on what premises the mortgage is secured? No.
There is nothing to show in the balance sheet that the bank's premises were in fact mortgaged? I say that the setting out of "Specialty Debt" separate from the rest to any person with a general knowledge of law or book-keeping
That would not convey that impression to the ordinary business man ? It is not meant to. I am following the
Government system.
Why not put in "Mortgage on the bank premises" ? Because it is not customary. The Government would not ask us to
distinguish specialty debts if that was not the appropriate term to use. That is my idea and the auditor had a different idea "Specialty Debt" is a term used by the Government.
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The auditor took it out of your balance sheet
and it was included in the item "Accounts Payable" ? That illustrates the difference between the Accounting mind and the legal
mind.
You don't suggest that the printed balance sheet discloses the fact that there is any mortgage on the bank premises? It does not to me.
Nor to me nor to anybody else? But I think my term is excellent.
You agree that a specialty debt might be any debt secured under a bond ? I agree, true, but the word "specialty debt" at once puts a person on his guard, that there is a debt over and above an ordinary debt.
The premises of your bank Hongkong Central, was purchased for $249000 ?
From a man called Tau Wai ? Yes.
Alias Yau Farin ? Yes, I think so.
25, Des Voeux Road,
Yes.
One of your directors ? Yes, I believe one of our directors.
Judge:- Was that a long leasehold ? O.R: Yes, I believe 999 years, My Lord.
You know Yau Farin purchased these premises originally from the liquidator of the Oriental Commercial Bank for $205,000.00? I did not at the time, but later.
You knew at the time this balance sheet was published ?
Did you ever ask Yau Farin if he made a profit of $35,000 from the company of which he was a director ?
It was difficult for me to do such a thing, I dislike the man.
Yes.
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