XN000022-1984-01-25 — Page 9

WEDNESDAY, JANUARY 25, 1984

8

CLAUSE 240 REPLACES, INTER ALIA, SECTION 346 OF THE PRINCIPAL ORDINANCE WHICH SPECIFIES THAT DOCUMENTS DELIVERED TO THE REGISTRAR ARE TO CONFORM TO CERTAIN REQUIREMENTS.

IF SUCH REQUIREMENTS ARE NOT COMPLIED WITH, THE REGISTRAR WILL SERVE A NOTICE TO THE PERSON WHO SUBMITS THE DOCUMENTS STATING HOW THAT PERSON HAS NOT COMPLIED WITH THE REQUIREMENTS AND THAT PERSON WILL BE GIVEN A 14-DAY GRACE PERIOD TO COMPLY WITH THE REQUIREMENTS.

MR YEUNG WOULD BE MOVING A TECHNICAL AMENDMENT TO CLARIFY THAT THE GRACE PERIOD WOULD BEGIN FROM THE DATE OF RECEIPT OF THE NOTICE SERVED BY REGISTERED POST.

MR WONG PO-YAN, STRESSED THAT A DIRECTOR OF A COMPANY, IN DISCHARGING HIS DUTIES, MUST ACT HONESTLY IN THE EXERCISE OF HIS POWERS IN THE INTERESTS OF THE COMPANY AND IN ACCORDANCE WITH THE CODE OF COMMERCIAL MORALITY AND BUSINESS ETHICS VOLUNTARILY.

HE WOULD MOVE AMENDMENTS TO CLAUSE 114 RELATING TO THE RESIGNATION OF DIRECTOR OR SECRETARY OF A COMPANY AND THE PROHIBITION OF LOANS TO DIRECTORS.

CLAUSE 114 ADDS NEW SECTIONS 157A TO 157J.

NEW SECTIONS 157A TO 157F INTRODUCE NEW REQUIREMENTS RELATING TO APPOINTMENT, QUALIFICATIONS, REMOVAL AND RESIGNATION OF DIRECTORS, INCLUDING THE POWER OF THE COURT TO MAKE DISQUALIFICATION ORDERS AGAINST FRAUDULENT PERSONS OR DIRECTORS OF INSOLVENT COMPANIES.

HE WOULD BE MOVING AN AMENDMENT TO MAKE IT CLEAR THAT WHERE THE ARTICLES OF A COMPANY REQUIRE A DIRECTOR OR SECRETARY OF THE COMPANY TO GIVE NOTICE FOR RESIGNATION, THE NOTICE SHALL BE IN WRITING BY THE PERSON GIVING SUCH NOTICE.

TURNING TO THE PROHIBITION OF LOANS OF DIRECTORS, MR WONG SAID, THE NEW SECTIONS 157H, 157 AND 157J BREAK NEW GROUND IN RESPECT OF THE MAKING OF LOANS OR THE GIVING OF GUARANTEES BY COMPANIES TO DIRECTORS OR FOR THE BENEFIT OF DIRECTORS.

+UNDER NEW SECTION 157H, WHICH DOES NOT APPLY TO BANKS OR DEPOSIT-TAKING COMPANIES, THE GENERAL RULE IS THAT LOANS OR GUARANTEES BY A COMPANY TO THE DIRECTORS OF THE COMPANY OR OF ITS HOLDING COMPANY, OR TO A COMPANY CONTROLLED BY ANY ONE OR MORE OF ITS DIRECTORS, ARE PROHIBITED.+

THERE ARE FIVE EXCEPTIONS:

* LOANS ETC. AS BETWEEN COMPANIES IN THE SAME GROUP;

* LOANS ETC. BY PRIVATE COMPANIES (EXCEPT THOSE BELONGING

TO A GROUP OF COMPANIES OF WHICH A MEMBER IS A LISTED COMPANY) IF APPROVED IN GENERAL MEETING,

* LOANS ETC. TO DEFRAY LEGITIMATE EXPENSES INCURRED WHILE

ON COMPANY BUSINESS;

/* LOANS (NOT