XN000022-1984-10-10 — Page 19

WEDNESDAY, OCTOBER 10, 1934

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BILL TO MERGE TWO DEPOSIT-TAK ING COMPANIES

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AN UNOFFICIAL MEMBER'S BILL TO MERGE TWO LOCAL DEPOSIT-TAK ING COMPANIES WAS GIVEN ITS SECOND READING IN THE LEGISLATIVE COUNCIL TODAY.

THE HON JOHN SWAINE SAID THE BILL PROVIDED FOR THE VESTING IN STANDARD CHARTERED ASIA LIMITED OF THE UNDERTAKING OF MAIBL BERMUDA (FAR EAST) LIMITED.

BOTH COMPANIES WERE REGISTERED AS DEPOSIT-TAKING COMPANIES IN HONG KONG ENGAGED IN THE WHOLESALE LENDING BUSINESS, AND BOTH WERE SUBSIDIARIES OF THE STANDARD CHARTERED BANK GROUP.

+ THE IR PROPOSED MERGER IS WITH A VIEW TO GROUP RATIONALISATION, MR SWAINE SAID.

HE SAID UNDER NORMAL COMMERCIAL PRACTICE THE PROPOSED MERGER WOULD HAVE BEEN ACHIEVED BY AN EXCHANGE OF SHARES.

BUT THIS METHOD WAS NOT AVAILABLE BECAUSE OF THE RESTRICTION CONTAINED IN THE DEPOS IT-TAK ING COMPANIES' ORDINANCE WHICH PREVENTS A DEPOSIT-TAKING COMPANY FROM INVESTING MORE THAN 25 PER CENT OF ITS CAPITAL AND RESERVES IN THE SHARES OF ANOTHER COMPANY.

IMPLEMENTATION OF THE PROPOSED MERGER BY MEANS OF A PRIVATE MEMBER'S BILL HAD THE SUPPORT OF THE COMMISSIONER OF BANKING AND THE SECRETARY FOR MONETARY AFFAIRS, AND THE BILL ITSELF HAD BEEN CLEARED WITH THE LAW DRAFTSMAN'S OFFICE, MR SWAINE SAID.

HE SAID UNDER THE TERMS OF THE BILL, MAIBL BERMUDA (FAR EAST) LIMITED WOULD CEASE TO BE A DEPOSIT-TAKING COMPANY, ALTHOUGH IT WOULD RETAIN ITS LEGAL EXISTENCE WITH A SMALL NOMINAL CAPITAL AND BECOME A SUBSIDIARY OF STANDARD CHARTERED ASIA LIMITED.

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