36
WEDNESDAY, OCTOBER 27, 1993
DISQUALIFICATION OF INTELLECTUALLY IMPAIRED COMPANY DIRECTORS
CONSIDERATION HAS BEEN GIVEN TO WHETHER ADDITIONAL
PROVISIONS
MAY BE INSERTED INTO THE COMPANIES (AMENDMENT) (NO.3) BILL, CONCERNING THE DISQUALIFICATION OF COMPANY DIRECTORS.
THE BILL IS NOW BEING EXAMINED BY THE LEGISLATIVE COUNCIL AND ADVICE OF THE ATTORNEY GENERAL'S CHAMBERS HAS ALSO BEEN SOUGHT.
THIS WAS STATED BY THE SECRETARY FOR FINANCIAL SERVICES, MR M D CARTLAND, IN A WRITTEN REPLY TO A QUESTION BY DR THE HON HUANG CHEN-YA IN THE LEGCO TODAY (WEDNESDAY).
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'THERE WOULD BE DIFFICULTIES INHERENT IN FORMULATING GOOD WORKABLE STATUTORY PROVISIONS FOR THE DISQUALIFICATION OF DIRECTORS ON THE GROUNDS OF INTELLECTUAL IMPAIRMENT, MR CARTLAND SAID.
"
THE EXISTING PROVISIONS RELATING TO DISQUALIFICATION AND THE NEW PROVISIONS PROPOSED IN THE BILL PROVIDE FOR DISQUALIFICATION FROM HOLDING DIRECTORSHIPS OF ALL COMPANIES ON SPECIFIC GROUNDS SUCH AS MISCONDUCT AND INVOLVEMENT IN FRAUD.
INTRODUCING DISQUALIFICATION
IMPAIRMENT WOULD CHANGE THIS CONCEPT.
ON THE GROUNDS OF INTELLECTUAL
"OUTRIGHT DISQUALIFICATION IN THIS CASE MIGHT NOT BE APPROPRIATE AS THE PERSON AFFECTED MIGHT BE CAPABLE OF UNDERTAKING A DIRECTORSHIP OF A COMPANY WHICH CONDUCTS VERY SIMPLE AND STRAIGHTFORWARD BUSINESS, ALTHOUGH PROBABLY NOT A COMPANY WHICH ENGAGES IN DIVERSE AND COMPLEX BUSINESS.
"THIS IS COMPLICATED BY THE FACT THAT THERE IS NO OBJECTIVE COMMON MINIMUM STANDARD OF PERFORMANCE WHICH MUST BE ATTAINED BY DIRECTORS."
ALL
DIFFERENT STANDARDS MAY BE ACCEPTABLE FROM DIFFERENT DIRECTORS, DEPENDING ON THE INDIVIDUAL'S KNOWLEDGE AND EXPERIENCE, EXPLAINED.
HE
HE ADDED THAT THE ADMINISTRATION WAS NOT AWARE OF ANY COMPANIES-RELATED LEGISLATION IN OTHER COUNTRIES THAT ATTEMPTS TO DEAL SPECIFICALLY WITH THE ISSUE OF MENTAL INCAPACITY IN DIRECTORS.
ACCORDING TO MR CARTLAND, ONE POSSIBLE APPROACH WOULD BE TO
WHAT COULD BE DONE THROUGH THE MEDIUM OF COMPANIES' ARTICLES
OF ASSOCIATION.
THE STANDARD ARTICLES OF ASSOCIATION CONTAINED IN TABLE A IN PART 1 OF THE FIRST SCHEDULE OF THE COMPANIES ORDINANCE (CAP. 32) ALREADY PROVIDES, UNDER ARTICLE 90(D), THAT THE OFFICE OF A DIRECTOR SHALL BE VACATED IF THE DIRECTOR, INTER ALIA, "BECOMES OF UNSOUND MIND".
ALTHOUGH IT IS NOT A MANDATORY REQUIREMENT UPON COMPANIES ΤΟ ADOPT THE STANDARD SET OF ARTICLES, MANY HONG KONG COMPANIES DO EITHER ADOPT THESE IN THEIR ENTIRETY OR FOLLOW THEM VERY CLOSBLY.
/MR CARTLAND