11
WEDNESDAY, MAY 1, 1991
"WE AIM TO ENSURE THAT THEY REFLECT THE PROPER BALANCE BETWEEN THE NEED TO PROTECT LOCAL INVESTORS AND THE NEED TO ENCOURAGE FOREIGN ISSUERS TO LIST AND RAISE CAPITAL IN HONG KONG, HE NOTED.
MR MACLEOD SAID THE EXISTING PROVISIONS OF THE ORDINANCE PROVIDED THAT THE FINANCIAL SECRETARY AND THE HIGH COURT MIGHT ORDER THAT THE SHARES IN QUESTION BE SUBJECT TO CERTAIN RESTRICTIONS,
KNOWN COMMONLY
INTO AS A 'FREEZING ORDER', IF AN INVESTIGATION OWNERSHIP OF A COMPANY'S SHARES MET WITH OBSTRUCTION.
THE
THESE RESTRICTIONS OPERATED TOGETHER TO FREEZE THE TRANSFER, EXERCISE
ISSUES OF VOTING RIGHTS, PAYMENT OF DIVIDENDS AND BONUS RESPECT OF THE SHARES OF A DEFAULTING SHAREHOLDER, HE EXPLAINED.
IN
AT PRESENT, WITH THE EXCEPTION OF A RESTRICTION ON TRANSFERS IN AGAINST HONG KONG, THESE PROVISIONS COULD NOT BE ENFORCED IN PRACTICE FOREIGN COMPANIES.
THE ACTING FINANCIAL SECRETARY SAID TO RETAIN THEM FOR LOCAL COMPANIES ONLY WAS NEITHER DESIRABLE NOR NECESSARY.
"UNLESS PRACTICAL AND PRUDENTIAL CONSIDERATIONS DICTATE AND OTHERWISE, WE SHOULD AVOID A DISPARITY IN TREATMENT BETWEEN LOCAL FOREIGN COMPANIES.
"OUR AIM MUST BE TO PROVIDE A LEVEL PLAYING FIELD," HE ADDED.
"WE PROPOSE, THEREFORE, TO REPLACE THE PRESENT PROVISIONS BY RESTRICTION ON THE TRANSFER OF SHARES REGISTERED IN HONG KONG.
A
"WE BELIEVE THAT THIS SANCTION, WHICH WILL BE APPLICABLE TO ALL LISTED COMPANIES, SHOULD BE ADEQUATE AND EFFECTIVE IN THE GENERALITY OF CASES.
"BECAUSE OF THE REQUIREMENT IN THE STOCK EXCHANGE LISTING RULES THAT SHARES TRADED ON THE EXCHANGE BE MAINTAINED ON A REGISTER KEPT IN HONG KONG, IT WILL EFFECTIVELY PREVENT THE SHARES BEING TRADED IN HONG KONG.
"WE
ARE ALSO ASSURED THAT TRADING ELSEWHERE WILL BE MADE MORE IN DIFFICULT BECAUSE THE GREAT MAJORITY OF OVERSEAS COMPANIES LISTED
KONG HONG
HAVE THEIR PRIMARY, IF NOT THEIR SOLE, LISTING IN HONG KONG," MR MACLEOD NOTED.
PUBLICITY AND OTHER MEASURES WERE BEING WORKED OUT BY THE ON SECURITIES AND FUTURES COMMISSION TO ENSURE THAT THE RESTRICTION TRANSFERS WAS WORKABLE AND EFFECTIVE.
ΤΟ NEVERTHELESS,
STRENGTHEN THE SANCTION AND LIMIT THE OPPORTUNITIES FOR EVASION, TWO FURTHER MEASURES WERE PROPOSED.
"FIRST,
CANCELLATION
A FREEZING ORDER WILL INCLUDE NEW RESTRICTIONS ON OF SHARE CERTIFICATES AND REMOVAL OF SHARES
THE
FROM
HONG
KONG.
/"THESE ARE