XN000022-1987-02-18 — Page 17

WEDNESDAY, FEBRUARY 18, 1987

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HE SAID THE GROUP FELT THAT THOUGH IN THE LONGER TERM THE PROPOSED TIME LIMIT OF SIX MONTHS MIGHT BE DESIRABLE, IT WAS NOT PRACTICAL AT PRESENT TO IMPOSE IT ON PRIVATE COMPANIES AND COMPANIES LIMITED BY GUARANTEE.

THE ADMINISTRATION AGREED TO THAT AND THE RELEVANT AMENDMENT WAS MOVED BY MR POON DURING THE COMMITTEE STAGE OF THE BILL.

MR POON SAID THE AD HOC GROUP HAD ALSO CONSIDERED WHETHER A NEW SECTION WHICH EMPOWERED AN INSPECTOR TO OBTAIN DOCUMENTS AND INFORMATION WITHOUT THE NECESSITY OF OBTAINING A COURT ORDER WOULD CREATE ANY ABUSE OF POWER OR INCREASE INSPECTION COSTS.

HE NOTED THAT THE ADMINISTRATION HAD CONFIRMED THAT THERE WOULD BE A CENTRAL INVESTIGATION UNIT WITHIN THE MONETARY AFFAIRS BRANCH WITH APPROPRIATE TERM OF REFERENCE, EFFECTIVE GUIDELINES AS WELL AS PROPER MONITORING OF PROGRESS, WHICH SHOULD MEET THE CONCERNS EXPRESSED IN THIS RESPECT.

+ON SUCH ASSURANCES, IT WAS CONCEDED THAT IT WOULD NOT BE NECESSARY TO RESTRICT THE EXERCISE OF SUCH POWERS OF INSPECTORS BY LEGISLATION OR OTHER CONSTRAINTS, HE SAID.

ALSO SPEAKING IN SUPPORT OF THE BILL, THE HON DAVID LI SAID THE SIX-MONTH TIME LIMIT FOR SUBMISSION OF ACCOUNTS, IN THAT IT WOULD HAVE APPLIED TO PRIVATE COMPANIES AS ORIGINALLY PROPOSED, WOULD HAVE BEEN UNDULY ONEROUS AND SERVED LITTLE PRACTICAL PURPOSE.

+1 AM PLEASED, THEREFORE, THAT AFTER FURTHER CONSULTATION THE GOVERNMENT NOW AGREES THAT THE SIX-MONTH TIME LIMIT SHOULD NOT APPLY TO PRIVATE COMPANIES AND THAT THE ADVICE OF PROFESSIONALS HAS BEEN HEEDED IN THIS INSTANCE,+ HE SAID.

+1 ONLY HOPE THAT SIMILAR TREATMENT IS AFFORDED TO THE ADVICE OF THE BANKING INDUSTRY IN RESPECT OF WHAT I CONSIDER TO BE THE SERIOUS OMISSION OF ANY AMENDMENT TO SECTION 161(B) OF THE COMPANIES ORDINANCE, + HE ADDED.

MR LI NOTED THAT THIS PARTICULAR SECTION HAD BEEN STRONGLY CRITICISED BY THE HONG KONG ASSOCIATION OF BANKS AND THE FINANCIAL COMMUNITY.

+ IT IMPOSES UPON FINANCIAL INSTITUTIONS, IN RESPECT OF THEIR DIRECTORS' LOANS, MORE ONEROUS REPORTING REQUIREMENTS THAN DOES ANY OTHER INTERNATIONAL FINANCIAL CENTRE, HE SAID.

IN ADDITION, THE SECTION CLEARLY DISCRIMINATED AGAINST, AND PLACED AT A DISADVANTAGE, ALL LOCALLY INCORPORATED BANKS AND FINANCIAL INSTITUTIONS, HE SAID.

MR LI SAID THE GOVERNMENT WAS AWARE OF THE STRONG ARGUMENTS AGAINST THIS SECTION WHICH HAD ALREADY BEEN PRESENTED.

+ IF WE ARE TO RETAIN THE CREDIBILITY OF OUR SYSTEM OF REFERENCE TO EXTERNAL PROFESSIONAL BODIES AND AN ACTIVE STANDING COMMITTEE, THEN IT IS IMPERATIVE THAT THE GOVERNMENT IS NOT ONLY SEEN TO CONSULT ITS ADVISERS BUT ALSO IN THE ABSENCE OF COMPELLING REASONS TO THE CONTRARY TO HEED THEIR ADVICE, HE SAID.

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