CO129-561-6 Companies Amendment Ordinance draft bill- correspondence 18-1-1937 - 6-7-1938 — Page 8

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Colonial Treasurer Incorporated (Sections 365 to 372).

• valuable additional safeguards.

This affs an

A

I do not feel competent to comment in

detail on this Ordinance, but I would venture some

general criticisms.

(1) The Governor's power under Section 353

(3) to cancel any licence under the Ordinance in

his absolute discretion and without cause stated seems

to me to give him very wide powers, though it follows

Section 3 of the Palestine draft Ordinance.

(2) Section 4 which provides for the separate

winding up in the Colony of a branch of a company which

has also carried on business elsewhere. Under it the

Court on the application of the local liquidator

may order that the local affairs of the company may

be wound up separately and that the local assets

shall be applied in the first instance to the payment

of local debts. This no doubt particularly refers

to Chinese institutions with branches in Hong Kong

such as the Wing On Company. The powers given are

no doubt most desirable but it may be that difficulty

will be caused by the determination of exactly what

constitutes a local asset.

(3) The provision in Section 355 (2) that

no action or proceedings shall be maintained against

any member of the Banking Advisory Committee in

respect of any advise given or any statement made by

him to the Governor in Council or the Examiner of

Banks may permit a rather large discretion if members

of the board of any one bank are appointed to sit on

the Committee and are consequently free to make

statements about other banks.

(4)

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No.451.

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(4) Section 362 provides that the

accounts of every company conducting savings

bank business shall be kept entirely in English.

I should have thought that this provision might

be difficult to enforce. It is, however,

largely a matter for the local Government, and

is them I presume that we need not comment further.

(5) Section 364 prescribes the maximum

deposit which may be made in a Savings Bank at

any one time and the maximum amount of deposits

This follows

name

which may stand to any one man.

the recommendation of the Departmental Committee

appointed by the Secretary of State. The

Committee recommended (see paragraph 32) that

such maximum limits should be prescribed, but

that in order to allow some elasticity they

should not be fixed by Ordinance but by rules

made and if necessary altered from time to time

by the Governor in Council. The present

Ordinance does not allow the Governor such

to alter the amoun

power, and I think some such provision for the

alteration of the limit might be inserted in the

Ordinance.

(6) Sections 365 to 7 require the

deposit by every company conducting savings

bank business with Colonal Treasurer Incorporated,

securities to the value of $50,000, and in

addition to the value of one half of the aggre-

gate amount of savings bank deposits for the

time being held by the Company. The Ordinance

provides that the securities should be valued

according to their market price. I do not know

how far it may be thought desirable to consider

the alternative of valuation by cost price or

market

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market price, whichever is the less, as I believe is

/

done in this country.

? at this stage all we need do is to send a the despatch

copy of the Ordinance and of Mr. Young's letter

(1 on 53671/35) to the Treasury, the Crown Agents and

the Board of Trade for any observations which they

may have to offer and to the Foreign Office for

information telling each.

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