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WEDNESDAY, NOVEMBER 27, 1974
No FURTHER POINTED OUT THAT THE COMPANIES LAW REVISION COMMITTEE'S REPORT, THE RECOMMENDATIONS OF WHICH THE BILL WAS DESIGNED TO GIVE EFFECT TO, WAS WRITTEN IN CIRCUMSTANCES VERY DIFFERENT FROM THOSE PREVAILING TODAY AND THERE WAS REFERENCE TO +PRESENT BOOK CONDITIONS+, +A GREAT DEAL OF OVERSEAS MONEY WHICH IS ALREADY HERE+ AND +ĹARGE NUMBERS OF SMALL INVESTORS+.
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+TODAY THERE ARE NO LONGER BOOM CONDITIONS, MUCH OVERSEAS MONEY HAS BEEN WITHDRAWN AND VIRTUALLY THE ONLY SMALL INVESTORS REMAINING ARE THOSE WHO HAVE BEEN LOCKED IN' TO A FALLING MARKET, + MR. LI SAID.
HE DID NOT BELIEVE THAT INVESTORS WOULD RETURN EITHER FROM OVERSEAS OR WITHIN THE COLONY UNTIL THEY COULD DO SO ON SOUND INVESTMENT ADVICE BASED ON FULL KNOWLEDGE OF THE RELEVANT FACTS= ONE SUCH FACT WAS THE OWNERSHIP CF SUBSTANTIAL HOLDINGS OF SHARES IN PUBLIC COMPANIES.
HE CONSIDERED THEREFORE THAT IT WAS OF THE GREATEST IMPORTANCE TO THE HONG KONG STOCK MARKETS AS A WHOLE, AND TO THE VERY PEOPLE WHOSE SECRECY WAS AT PRESENT PROTECTED, THAT THE BENEIFICIAL OWNERSHIP OF SUBSTANTIAL HOLDINGS' IN PUBLIC COMPANIES SHOULD BE DISCLOSED.
ON THE QUESTION OF THE PLACE WHERE BOOKS OF ACCOUNTS ARE KEPT, MR. LI SAID : +THE U.K. COMPANIES ACT 1948 DIRECTS THAT THE BOOKS OF ACCOUNT SHALL BE KEPT AT THE REGISTERED OFFICE OF THE COMPANY CR AT SUCH OTHER PLACE AS THE DIRECTORS THINK FIT.+
+IT THEN PROVIDES FOR APPROPRIATE RETURNS TO BE MADE IN CASES WHERE THE BOOKS OF ACCOUNT ARE KEPT AT PLACE OUTSIDE GREAT BRITAIN.+
THIS WAS REPEATED VIRTUALLY VERBATIM IN A SECTION OF THE NEW BILL.
HOWEVER, MR. LI SAID: THE POSITION IN HONG KONG IS COMPLETELY DİFFERENT FROM THAT OF THE UNITED KINGDOM, IN THAT HONG KONG OFFERS CONSIDERABLE ATTRACTIONS TO COMPANIES TO BECOME REGISTERED HERE EVEN THOUGH THEY ARE NOT GOING TO DO NUCH OR EVEN ANY BUSINESS IN THE COLONY.+
HE REJECTED THE ARGUMENT THAT +HONG KONG GAINS A BENEFIT FROM THIS IN THE SHAPE OF THE PROVISION OF EMPLOYMENT AND INFLOW OF FUNDS THAT RESULT+.
HE SUGGESTED THAT THE NEW LEGISLATION BE AMENDED AT A LATER STAGE TO DIRECT THAT THE BOOKS SHALL BE KEPT AT THE REGISTERED OFFICE OF THE COMPANY OR AT SUCH OTHER PLACE WITHIN THE COLONY OF HONG KONG AS THE DIRECTORS THINK FIT.+
MR. LI EMPHASISED : +THIS IS PARTICULARLY IMPORTANT IN VIEW OF THE RECENT EVENTS WHEN IT WAS FOUND NECESSARY TO INVESTIGATE INTO THE AFFAIRS OF CERTAIN PUBLIC COMPANIES.+
REPLYING TO THE POINTS RAISED BY MR. LI, THE FINANCIAL SECRETARY, THE HON. PHILIP HADDON-CAVE SAID THE GOVERNMENT WAS ALIVE TO THE NEED TO HAVE COMPANY LEGISLATION CONTINUALLY UPDATED TO REFLECT PREVAILING OPINION. UNDERTAKE THEREFORE TO HAVE THE VIEWS EXPRESSED BY THE COMPANIES LAW REVISION COMMITTEE RE-EXAMINED.+
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