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FRID JUNE 7, 1985
+
REFERRING TO THE ACQUISITION OF THE HANG LUNG BANK AND NOW THE OVERSEAS TRUST BANK, MR TONG SAID WE COULD NOT POSSIBLY BAIL OUT ALL LAME DUCK BANKS AS THEY WENT LAME AND SURELY THE SYSTEM OF SAFEGUARDS MUST BE CHANGED.
HE ALSO ASKED: +WERE THERE ANY OTHER EARLY WARNING SIGNALS WHICH COULD HAVE BEEN MADE BUT WHICH WERE NOT MADE?+ WHAT WERE THE TELL-TALE SIGNS, IF ANY, REVEALED IN THE BANK'S FINANCIAL STATEMENTS PUBLISHED TO DATE?
+ IN SPITE OF THESE QUESTIONS THE PROPOSED ACTION MUST BE RIGHT FOR THE REASONS I HAVE GIVEN. HE SAID. +HOWEVER, THE COSTS WILL HAVE TO BE ACCOUNTED FOR LATER.+
SPECIAL LEGCO SITTING
***
ON THE ADVICE OF THE EXECUTIVE COUNCIL, AN OVERSEAS TRUST BANK (ACQUISITION) BILL 1985 WILL BE INTRODUCED INTO THE LEGISLATIVE COUNCIL FOR ALL THREE READINGS AT A SPECIAL SITTING THIS EVENING AT 6 O'CLOCK.
AFTER CONSIDERING ALTERNATIVE COURSES OF ACTION WHICH THE GOVERNMENT COULD TAKE TO OVERCOME PROBLEMS CAUSED BY THE INSOLVENCY OF THE OVERSEAS TRUST BANK, THE EXECUTIVE COUNCIL HAS RECOMMENDED THAT THE INTEREST OF DEPOSITORS AND CREDITORS SHOULD BE SAFEGUARDED AND THAT THERE SHOULD BE MINIMAL DISRUPTION TO THE NORMAL OPERATION OF BANKING BUSINESS IN HONG KONG.
THE BILL THEREFORE PROVIDES FOR THE ACQUISITION OF THE OVERSEAS TRUST BANK BY THE GOVERNMENT AND THE SUBSEQUENT CARRYING ON OF ITS BUSINESS.
ITS PROVISIONS ARE MODELLED ON THE HANG LUNG BANK (ACQUISITION) ORDINANCE AND ENABLE THE FINANCIAL SECRETARY TO GUARANTEE THE DEBTS OF THE BANK, CHARGING ALL OBLIGATIONS UNDER THE GUARANTEE TO THE EXCHANGE FUND.
IF THE LEGISLATIVE COUNCIL PASSES THE BILL, THE BANK WILL REOPEN ON MONDAY MORNING IN THE OWNERSHIP OF THE GOVERNMENT, ALL DEPOSITS WILL BE SAFEGUARDED.
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