SUNDAY, MARCH 9, 1986
2
THESE RECOMMENDATIONS NOW UNDER STUDY WITHIN THE GOVERNMENT ARE COVERED IN THE SECOND REPORT OF THE STANDING COMMITTEE PUBLISHED TODAY (SUNDAY).
THE CHAIRMAN OF THE COMMITTEE, MR JUSTICE CONS, EXPLAINED THAT, SINCE 1972 A PROSPECTUS ISSUED BY A HONG KONG REGISTERED COMPÁNY COULD NOT CONTAIN ANY PHOTOGRAPHS OR ILLUSTRATIONS.
THIS RULE WAS INTRODUCED IN THAT YEAR TO DEAL WITH CASES INVOLVING MISLEADING PHOTOGRAPHS AND ILLUSTRATIONS PUBLISHED IN COMPANIES' PROSPECTUSES ISSUED DURING THE STOCK MARKET BOOM IN 1971-72 AND EARLIER.
HAVING TAKEN INTO CONSIDERATION VIEWS OF THE LAW SOCIETY OF HONG KONG AND A NUMBER OF UNDERWRITING INSTITUTIONS, THE STANDING COMMITTEE HAS DECIDED THAT THE INCLUSION OF GRAPHS, PHOTOGRAPHS ETC IN PROSPECTUSES CAN SOMETIMES MAKE THEM MORE COMPREHENSIBLE, PARTICULARLY WHEN A COMPANY IS INVOLVED IN ADVANCED TECHNOLOGY.
+THE STANDING COMMITTEE THEREFORE RECOMMENDED THAT THE PROHIBITION OF PHOTOGRAPHS AND ILLUSTRATIONS BE REPEALED AS REQUESTED BUT THAT IT SHOULD BE MADE CLEAR THAT THE REGISTRAR OF COMPANIES WILL STILL HAVE POWER TO REFUSE TO REGISTER A PROSPECTUS IF IT CONTAINS PHOTOGRAPHS OR ILLUSTRATIONS WHICH ARE MISLEADING,+ MR JUSTICE CONS SAID.
WITH REGARD TO INSPECTORS APPOINTED BY THE FINANCIAL SECRETARY TO INVESTIGATE COMPANIES, UNDER THE PRESENT PROVISIONS IN THE COMPANIES ORDINANCE, ALL DIRECTORS AND OTHER OFFICERS AND AGENTS OF A COMPANY UNDER INVESTIGATION HAVE A DUTY TO PRODUCE THE COMPANY'S BOOKS AND DOCUMENTS TO THE INSPECTOR,
THE INSPECTOR ALSO HAS POWER TO EXAMINE ON OATH THE DIRECTORS, AGENTS AND EMPLOYEES OF THE COMPANY AND TO APPLY TO THE COURT FOR EXAMINATION ANY OTHER PERSON ON OATH WHERE HE THINKS THIS IS NECESSARY FOR THE PURPOSES OF THE INVESTIGATION.
+THE STANDING COMMITTEE RECEIVED REPRESENTATIONS TO THE EFFECT THAT THESE POWERS ARE INSUFFICIENT IN CASES WHERE THE BOOKS AND PAPERS OF A COMPANY ARE SCATTERED AMONG VARIOUS THIRD PARTIES WHO ARE NOT DIRECTORS, AGENTS OR EMPLOYEES OF A COMPANY AND SOME OF THESE REFUSE TO CO-OPERATE WITH THE INSPECTOR.
IN SUCH CASES, THE INSPECTOR HAS TO GO TO COURT FOR EXAMINATION OF THE THIRD PARTIES AND THIS CAN CAUSE DELAYS WHICH MAY BE SERIOUS IN URGENT CASES, + MR JUSTICE CONS SAID.
IN BRITAIN, THE SITUATION IS DIFFERENT WHERE AN INSPECTOR HAS POWER TO REQUIRE ANYONE WHOM HE CONSIDERS MAY POSSESS INFORMATION REGARDING THE COMPANY'S AFFAIRS TO PRODUCE ANY OF THE COMPANY'S BOOKS OR DOCUMENTS IN HIS POSSESSION AND TO EXAMINE ANYONE ON OATH WHOM HE CONSIDERS MAY POSSESS INFORMATION CONCERNING THE COMPANY'S AFFAIRS.
/AN INSPECTOR