CO129-461 - Governor Sir Stubbs - 1920 [5-7] — Page 292

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part of the business of the company. Cases such as this

suggest two observations. One is that where we have a reason-

able amount of control through our territorial jurisdiction in

Hongkong it seems to be unnecessarily drastic to demand the

personal control which would be given in China by the appoint-

ment of a British managing director. The other observation is

that a company in such a case may well have reasonable doubts

as to its status. It may be advised that it is not a China

company, but it has no means of testing the soundness of that advice except by inviting a prosecution in Shanghai, when it might be subjected to havy daily penalties.

8.

The objection that no means is provided by which

a company can obtain a judicial decision as to its status under the Order would be met in the case of Hongkong China companies if the British authorities in China would be prepared to agree

not to apply for any penalty in respect of any default made while the company is on the Hongkong register. The procedure then would be that if the Registrar of Companies at Shanghai were of opinion that a Hongkong China company had become a

China company under the new Order, he would set in motion the machinery for transferring the company to the Shanghai register, and the status of the company could then be ascertained judicially by an appeal to the Supreme Court under section 3(5)

of the Companies Ordinance, 1915.

9.

This consideration, however, would not apply to

companies which are already on the Shanghai register, and it

seems to be a grave objection to the Order-in-Council that no

means is provided by which China companies can obtain a

judicial decision as to their status in a matter which must

often be a difficult question of fact, though no doubt some

cases will be quite clear.

10.

Even in some of those apparently clear cases, such as the Wing On Company (Shanghai) Limited, the other observation remains true. Such a company may be a subsidiary company belonging to a bona fide Hongkong enterprise, and the