NC 4, 1985
FS'S STATEMENT ON O.T.B.
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THE FINANCIAL SECRETARY MADE THE FOLLOWING STATEMENT
TONIGHT:
+THE DIRECTORS OF OVERSEAS TRUST BANK LIMITED THIS AFTERNOON ADVISED THE COMMISSIONER OF BANKING THAT THE BANK WAS INSOLVENT AFTER CONSULTING ME AND THEREFORE UNABLE TO CARRY ON BUSINESS. THE COMMISSIONER IMMEDIATELY TOOK STEPS TO EXERCISE HIS POWERS OF CONTROL UNDER S.13(1) OF THE BANKING ORDINANCE AND HAS DIRECTED THE BANK AND ITS BOARD OF DIRECTORS TO DESIST FROM UNDERTAKING ANY BUSINESS WHATSOEVER IN ITS BRANCHES AND OFFICES IN HONG KONG OR ELSEWHERE OVERSEAS UNTIL FURTHER NOTICE. AS A RESULT THE BANK AND ITS BRANCHES WILL NOT BE OPEN FOR BANKING BUSINESS TOMORROW (FRIDAY) OR ON SATURDAY.
THE EXECUTIVE COUNCIL WILL BE MEETING TOMORROW AFTERNOON IN ORDER TO DISCUSS THE FUTURE OF THE BANK AND THE STEPS THAT WILL BE TAKEN TO PROTECT DEPOSITORS, PARTICULARLY SMALL DEPOSITORS. A FURTHER ANNOUNCEMENT WILL BE MADE TOMORROW EVENING.
THIS DEVELOPMENT FOLLOWED AN INTENSIVE AUDIT OF THE OVERSEAS TRUST BANK'S BOOKS BY TEAMS OF EXAMINERS FROM THE BANKING COMMISSION DURING THE PAST TWO MONTHS. AT THE COMMISSIONER'S REQUEST THE BOARD HAS BEEN ADVISED SINCE LAST MONDAY BY A MERCHANT BANKER. THERE HAVE BEEN PROLONGED CONSULTATIONS WITH EXECUTIVES AND DIRECTORS OF THE BANK.+
THE FINANCIAL SECRETARY SAID THAT HE BELIEVES THAT THE BANK'S PROBLEMS GO BEYOND IMPRUDENT MANAGEMENT OR MISFORTUNE AND THAT THERE ARE SERIOUS MATTERS WHICH WARRANT INVESTIGATION BY THE COMMERCIAL CRIMES BUREAU. THAT INVESTIGATION HAS ALREADY BEGUN.
THE GOVERNMENT REMAINS COMMITTED TO ITS POLICY OF SAFEGUARDING THE EXCHANGE RATE OF THE HK DOLLAR AND THE STABILITY AND REPUTATION OF THE BANKING SYSTEM.
COMPANIES SUSPENDED
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THE COMMISSIONER OF DEPOSIT-TAKING COMPANIES ANNOUNCED THAT HE HAS TODAY (THURSDAY) SUSPENDED THE REGISTRATION OF O.T. B. FINANCE LTD. AND EXPRESS FINANCE AND INVESTMENT LIMITED AS DEPOSIT-TAKING COMPANIES, ON THE GROUND THAT THE BUSINESS OF THE COMPANIES IS BEING CARRIED ON IN A MANNER DETRIMENTAL TO THE INTERESTS OF THE IR DEPOSITORS.
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