11
WEDNESDAY, JANUARY 27, 1984
+ IN ORDER TO GIVE SUFFICIENT TIME FOR ADJUSTMENT, A PERIOD OF SIX MONTHS' GRACE IS ALLOWED FOR COMPANIES TO CONFORM AFTER THE BILL COMES INTO OPERATION, MISS TAM SAID.
SHE WOULD BE MOVING AMENDMENT TO AVOID ANY CONFUSION OVER WHICH COMPANIES ARE TO BE REFERRED TO AND HOW AND WHEN THE DIRECTORS OF BODIES CORPORATE SHOULD VACATE THE IR OFFICES.
IN ORDER TO FURTHER PROTECT THE INTEREST OF THE SHAREHOLDERS, CLAUSE 112 ADDS NEW SECTION 155A TO 155D WHICH IMPOSE RESTRICTIONS AND OBLIGATIONS ON DIRECTORS IN THEIR MANAGEMENT FUNCTIONS VIS-A- VIS BOTH THE COMPANY AND THE SHAREHOLDERS.
+THIS IS AN IMPORTANT AMENDMENT BECAUSE THESE NEW PROVISIONS DEAL WITH THE DISPOSAL BY THE DIRECTORS OF A COMPANY'S FIXED ASSETS.
+THEY IMPOSE AN OBLIGATION ON THE DIRECTORS TO INDICATE THE PURPOSE OF THE COMPANY'S RESOLUTIONS REQUIRED FOR SUCH DISPOSAL OF FIXED ASSETS, AND TO DISCLOSE ANY RELATED INTERESTS OF THE DIRECTORS OF A MATERIAL NATURE AND, ALSO, TO KEEP ALL SHAREHOLDERS EQUALLY INFORMED, MISS TAM OBSERVED.
SHE NOTED THAT THE CLAUSE HAD THEREFORE ATTRACTED COPIOUS COMMENTS AND STRONG REPRESENTATIONS FROM PROFESSIONAL BODIES AND MOST OF THESE COMMENTS WERE MADE ON THE NEW SECTIONS 155A AND 155D.
NEW SECTION 155A PROVIDES THAT THE DIRECTORS OF A COMPANY SHOULD SEEK THE APPROVAL OF THE COMPANY AT A GENERAL MEETING FOR DISPOSAL OF THE COMPANY'S FIXED ASSETS IF THE VALUE TO BE DISPOSED OF OVER A PERIOD SHOULD EXCEED 33 PER CENT OF THE COMPANY'S FIXED ASSETS.
MISS TAM WOULD BE MOVING AMENDMENTS TO SUBSECTION 155A(1) (2), (3) AND (5) TO STIPULATE THAT THE REQUIREMENT BE APPLICABLE TO ALL LISTED COMPANIES AND THE IR SUBSIDIARIES AND TO COMPANIES WHICH ARE MEMBERS OF A GROUP OF COMPANIES WHICH INCLUDES A LISTED COMPANY.
SHE WOULD ALSO PROPOSE TO DELETE A PROVISO IN SUBSECTION 155A(5) WHICH EXONERATES A DIRECTOR WHO HAS FAILED TO COMPLY WITH SECTION 155(A)(1) FROM FINE AND/OR IMPRISONMENT, PROVIDED THAT THE TRANSACTION HE EXECUTED IS SUBSEQUENTLY APPROVED BY THE COMPANY IN A GENERAL MEETING.
IN ADDITION SHE WOULD MOVE TO DELETE NEW SECTION 155D WHICH DEALS WITH THE DIRECTORS' DUTY REGARDING INFORMATION TO SHAREHOLDERS.
MR POON SAID THAT THE PROPOSED CHANGES UNDER THE BILL WOULD CONTRIBUTE TO THE IMPROVEMENT OF ACCOUNT REPORTING AND AUDITING STANDARDS IN HONG KONG.
+THE NEW LEGISLATION WILL ALSO PLUG MAJOR LOOPHOLES, SUCH AS 'LOANS TO DIRECTORS' WHICH IS THE SUBJECT OF A LOT OF FOCUS AND CONCERN IN RECENT COMPANY FAILURES,+ HE SAID.
/HE WOULD