CO129-587-7 Telephone Amendment Ordinance 1940 9-4-1940 - 16-4-1940 — Page 11

DRAFT NOTE,

11

HONG KONG TELEPHONE SERVICE,

Company's rishtë,

1.

Unde Ordinance No. 9 of 1925, as amended, the

Company have sole right to operate telephone system

in Hong ong for 50 years, subject to possible.

extension for another 25 years.

Company's obligations to nubl10.

2. The Company must operate and maintain an efficient

public telephone service. There is no provision

for governmental control over its affairs, but the

Company must be registered locally; its Memorandum

and articles of association are subject to government

approval; it cannot borrow money without government

sanction; its accounts must be audited by government

appointee; and subscription rates are prescribed

by law, but are subject to revision at request of

government or company. Government have option to

purchase the undertaking at end of 50 year franchise.

TO 1940 financial arrangements.

3. rior to the enactment of Ordinance No. 9 of 1940,

the financial interests of the government, the share-

holders and the telephone subsoribers were provided

for as follows:

(a)

(b)

Covernment. Received royalty of 4 per annum

for each line in use.

Shareholders. Minimum dividend of 8% per annum

prescribed. If net profits oxceeded 8%, but

did not exceed 12%, the whole excess was to

go to shareholders.

If net profits exceeded

12, but did not exceed 18%, half this excess

was to go to shareholders.

Maximum dividend

to Shareholders 15% per annum.

/(c)