XN000022-1983-10-27 — Page 19

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THURSDAY, OCTOIR 27, 1983

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CONSTANT CHECKS ON FINANCIAL SECTOR URGED

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THE HON PETER W.C. POON TODAY WELCOMED THE GOVERNMENT'S COMMITMENT TO MAINTAIN AND IMPROVE THE LEGAL AND INSTITUTIONAL FRAMEWORK OF THE FINANCIAL SECTOR.

HE SAID IN THE LEGISLATIVE COUNCIL THAT THE GROWTH OF THE FINANCIAL SECTOR, IN SCALE AND SOPHISTICATION, HAD BEEN PHENOMENAL,

+CONSEQUENTLY, CONSTANT ATTENTION AND SUPERVISION BY PROPER AUTHORITIES ARE REQUIRED.

+I AM PLEASED TO HEAR THAT THE LONG-AWAITED COMPANIES (AMENDMENT) BILL IS EXPECTED TO BECOME LAW WITHIN THIS SESSION,+ HE SAID.

THIS WAS VERY MUCH NEEDED TO BRING THE COMPANY LEGISLATION UP TO DATE AND SHOULD RESULT IN A CORRESPONDING IMPROVEMENT IN FINANCIAL REPORTING, HE ADDED.

MR POON POINTED OUT THAT THE EARLY ESTABLISHMENT OF THE STANDING COMMITTEE ON COMPANY LAW REFORM WOULD PROVIDE A PROPER BODY TO REVIEW AND SUGGEST AMENDMENTS TO MODERNISE THE COMPANY LAW FROM TIME TO TIME.

HE ALSO NOTED THAT THE RECENT PROBLEMS OF SOME BANKS AND DEPOSIT-TAKING COMPANIES HAD CAUSED MUCH PUBLIC CONCERN.

+THOUGH THE PRESENT PRUDENTIAL SUPERVISION SYSTEM IS BASICALLY SOUND, THERE ARE AREAS WHICH NEED FREQUENT REVIEW.

+ IN THE LIGHT OF PAST EXPERIENCE, THE AMENDMENTS RELATING TO RESTRICTIONS OF LOANS TO DIRECTORS AND DIRECTOR-CONTROLLED COMPANIES ARE URGENTLY REQUIRED,+ HE SAID.

MR POON AGREED THAT THERE WAS A NEED FOR SOME FORM OF REQUIREMENT FOR THE DISCLOSURE OF SHAREHOLDINGS AND DEALINGS BY LISTED COMPANIES IN THE INTERESTS OF THE PUBLIC.

HE SAID THAT MANY CHINESE BUSINESSMEN BY TRADITION AND OVERSEAS INVESTORS BY CIRCUMSTANCES DESIRED TO KEEP A LOW BUSINESS PROFILE AND WERE RELUCTANT TO DISCLOSE THE IR FINANCIAL AFFAIRS.

+HOWEVER, IF OUR STOCK MARKET IS TO BE PROPERLY REGULATED AND HAVE CREDIBILITY HERE AND OVERSEAS, SUCH RELEVANT INFORMATION SHOULD BE AVAILABLE TO THE PUBLIC.

+THE MANNER AND EXTENT OF DISCLOSURE, HOWEVER, SHOULD BE DETERMINED BY WHAT IS SUITABLE AND NECESSARY IN HONG KONG AND NEED NOT BE UNDULY STRINGENT AS IN SOME PART OF THE WORLD.

/+IT IS