XN000022-1975-08-18 — Page 4

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MONDAY, AUGUST 18, 1975

THE SPOKESMAN POINTED OUT THAT IN LONDON THERE IS A LITTLE LEGISLATION RELATING TO TAKEOVERS BUT MOST OF THE PRACTICAL GUIDANCE IS PROVIDED BY THE CITY CODE WHICH WAS FIRST PUBLISHED IN MARCH 1958 AND HAS BEEN REVISED SEVERAL TIMES.

IT IS MOSTLY CONCERNED WITH PROCEDURE AND THE CONDUCT OF THE PARTIES INVOLVED. IT IS NOT STATUTORY BUT IT REPRESENTS THE COLLECTIVE OPINION OF THOSE PROFESSIONALLY CONCERNED AND THE LONDON STOCK EXCHANGE REQUIRES QUOTED COMPANIES TO COMPLY WITH IT.

+BEING THUS BACKED BY THE AUTHORITY AND PRESTIGE OF THE CITY, IT CANNOT BE LIGHTLY DISREGARDED, AND IN PRACTICE IT HAS PROVED EFFECTIVE,+ HE SAID.

THE PRESENT CODE FOR HONG KONG INCORPORATES A LOT OF THE CITY CODE, BUT MOSTLY WITH SUBSTANTIAL AMENDMENTS TO SUIT LOCAL CONDITIONS. IT ALSO INCLUDES SOME OF THE U.K. STATUTORY PROVISIONS REGARDING THE INFORMATION TO BE PROVIDED AND WILL BE AMENDED OR EXTENDED FROM TIME TO TIME BY THE COMMITTEE IN THE LIGHT OF EXPERIENCE.

AS IN THE CITY CODE, THE EARLY SECTIONS (SECTIONS 11 TO 19) ARE CONCERNED WITH GENERAL PRINCIPLES WHICH ARE OF UNIVERSAL APPLICATION AND MAKE FOR GOOD COMMERCIAL BEHAVIOUR, WHILE THOSE FROM SECTION 20 ONWARDS ARE MORE DIRECTED TO SPECIFIC GUIDANCE IN PRACTICE.

IT IS NOT INTENDED THAT ALL TAKEOVER PROPOSALS SHOULD BE SUBMITTED TO THE COMMITTEE BEFORE THEY ARE MADE BUT IF THE SPONSORS ARE IN ANY DOUBT ABOUT THE INTERPRETATION OF ANY OF THE PROVISIONS, THE COMMITTEE IS READY TO GIVE ITS VIEWS.

IF THERE APPEARS TO HAVE BEEN A BREACH OF THE CODE, THOSE CONCERNED WILL BE INVITED TO PRESENT THEIR CASE. IF THE COMMITTEE DECIDES THAT THERE HAS BEEN A BREACH IT CAN MAKE A PUBLIC STATEMENT. AND IT CAN ALSO LODGE A COMPLAINT AGAINST THE OFFENDER WITH THE SECURITIES COMMISSION,

PRINTED COPIES OF THE CODE WILL BE AVAILABLE SHORTLY FROM THE GOVERNMENT PUBLICATIONS CENTRE, STAR FERRY CONCOURSE, HONG KONG.

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