XN000022-1984-08-09 — Page 6

THURSDAY, AUGUST 9, 1984

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+HOWEVER, THIS HAS OFTEN LED TO PROLONGED CORRESPONDENCE WITH COMPANIES SEEKING TO BUY TIME. THIS PROCEDURE INCREASINGLY HAS BECOME THE SUBJECT OF ABUSE BY MANY COMPANIES AND THE IR DIRECTORS.+

IN FUTURE, REMINDERS WILL NO LONGER BE PUBLISHED IN THE PRESS AND COMPANIES WILL NOT BE INDIVIDUALLY FOREWARNED OF THE IMPENDING TIME LIMIT FOR COMPLIANCE WITH REQUIREMENTS OF THE COMPANIES ORDINANCE.

+FAILURE TO COMPLY WITH THE PROVISIONS OF THE ORDINANCE COULD BE PARTICULARLY SERIOUS IN THE CASE OF PUBLIC LISTED COMPANIES WHERE OBVIOUSLY THERE MUST BE CONSIDERABLE PUBLIC INTEREST AND INVOLVEMENT, + SAID MR GLEESON. THERE ARE 527 PUBLIC COMPANIES LIMITED BY SHARE ON THE COMPANIES REGISTER OF WHICH 257 ARE LISTED ON THE STOCK EXCHANGES.

+COMPLIANCE WITH THE ORDINANCE IS A MATTER FOR THE COMPANIES THEMSELVES AND THE IR DIRECTORS AND OFFICERS - ALTHOUGH THEY CAN HAVE RECOURSE TO THE IR PROFESSIONAL ADVISERS.

+UNFORTUNATELY, THE STANDARD OF COMPANY DIRECTORSHIP AND COMPANY ADMINISTRATION IN MANY CASES IN HONG KONG IS NOT HIGH AND A ROBUST APPROACH TO ENFORCEMENT IS REQUIRED, SAID MR GLEESON.

+THIS IS PARTICULARLY THE CASE IN THE LIGHT OF SEVERAL RECENT COMPANY FAILURES A NUMBER OF WHICH WERE OF SUBSTANTIAL PUBLIC LISTED COMPANIES.+

UNDER THE COMPANIES ORDINANCE, FINES OF UP TO $500 A DAY CAN BE IMPOSED FOR CONTINUING DEFAULTS, FIXED FINES CAN RUN UP TO $10 000 AND FINES OF $25 PER COPY FOR EVERY INCORRECT COPY DOCUMENT ISSUED CAN BE IMPOSED. IN ADDITION, HYBRID PENALTIES CAN BRING FINES OF UP TO $10 000 AND SIX MONTHS' IMPRISONMENT.

+ IN FUTURE THE REGISTRY WILL NOT ENTER INTO CORRESPONDENCE WITH COMPANIES ON THE SUBJECT. THE EXISTING SYSTEM OF MONITORING PUBLIC COMPANIES LIMITED BY SHARES, WHETHER LISTED OR NOT, WILL CONTINUE, AND WHEN A BREACH OF THE COMPANIES ORDINANCE WITH RESPECT TO THE FILING OF RETURNS IS IDENTIFIED A PROSECUTION OF THE COMPANY AND ITS DIRECTORS WILL FOLLOW AS SOON AS POSSIBLE AND WITHOUT ANY PRIOR REFERENCE TO THE COMPANY, SAID MR GLEESON.

THE COMPANY AND ITS DIRECTORS COULD THEN MAKE THEIR CASE, SUCH AS IT MIGHT BE, TO THE COURT. MR GLEESON SAID THAT THIS WAS, IN ANY CASE, THE CORRECT PROCEDURE SINCE THE ORDINANCE DID NOT CONFER ANY SPECIAL DISCRETION ON THE REGISTRAR OF COMPANIES. THE PROPER FORUM FOR DETERMINING THE SERIOUSNESS OF THE OFFENCE AND THE DEGREE OF CULPABILITY INVOLVED WAS THE COURT.

/IN THE