XN000022-1988-07-20 — Page 15

WEDNESDAY, JULY 20, 1988

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ON CLAUSE 14, HE SAID THE AMENDMENT TO SECTION 17A(1)(B) WAS TO ALLOW THE SETTING UP OF "SECOND-TIER" SUBSIDIARIES OF A LICENSEE, THAT IS, SUBSIDIARIES OF SUBSIDIARIES.

AMENDMENT (D) (II) WAS DESIRABLE TO BRING SECTION 17D(3) INTO LINE WITH 17D(4).

SECTION 17D(3) REQUIRED A PERSON TO DECLARE AN INTEREST IN THE VOTING SHARES OF A LICENSEE IF HE HAD A RELEVANT INTEREST IN AT LEAST 35 PER CENT OF THE SHARES OF A COMPANY, AND THAT COMPANY IN TURN HAD A RELEVANT INTEREST IN AT LEAST TWO PER CENT OF THE VOTING SHARES OF A LICENSEE.

"THIS PROVISION COULD BE CIRCUMVENTED BY THE CREATION OF A SUBSIDIARY COMPANY WITH THE PURPOSE OF HOLDING SUCH INTEREST. THE PROPOSED AMENDMENT WILL REMOVE SUCH AN ESCAPE," MR TSAO SAID.

AMENDMENT (G) (III), RELATING TO SECTION 17L, WAS TO BRING THE INTO LINE WITH THE SECURITIES (DISCLOSURE OF INTERESTS)

BILL ORDINANCE.

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THE AMENDMENT TO CLAUSE 1, MR TSAO SAID, WAS TO PROVIDE FOR DIFFERENT SECTIONS TO THE BILL TO COME INTO EFFECT ON DIFFERENT DAYS, AS MIGHT BE SPECIFIED BY THE GOVERNOR IN THE GAZETTE.

"THIS ARRANGEMENT WOULD, FOR EXAMPLE, ALLOW A LICENSEE A LONGER PERIOD OF TIME TO COMPLY WITH CERTAIN CONDITIONS, HE SAID.

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"

BE THE

THE ONE THAT IMMEDIATELY COMES ΤΟ MIND WOULD RESTRICTIONS ON SHAREHOLDINGS BY NON-LOCAL PERSONS PRIOR TO THE SHAREHOLDERS DECLARING THEIR RESIDENTIAL STATUS.

*

MADE

AS REGARDS CLAUSE 2, MR TSAO NOTED THAT AMENDMENT (A) PROVISION FOR EXISTING LICENSEES TO BE ABSORBED INTO OR MERGED WITH THEIR RESPECTIVE HOLDING COMPANIES.

AMENDMENT (B) WAS TO BRING THE BILL INTO LINE WITH THE SECURITIES (DISCLOSURE OF INTERESTS) ORDINANCE.

NOTING THAT CLAUSE 20 DEALT WITH THE IMPOSITION OF ROYALTY UPON THE LICENSEES, MR TSAO SAID AMENDMENT (A) WAS NECESSARY TO MAKE IT CLEAR THAT WHERE THE AMOUNTS ON WHICH ROYALTY WAS PAYABLE A CERTAIN LEVEL OF THE SLIDING SCALE, THE HIGHER PERCENTAGE ONLY TO THAT PART OF THOSE AMOUNTS WHICH EXCEEDED THE THRESHOLD, AND NOT TO THE WHOLE OF THOSE AMOUNTS.

THE FLAT RATE REMAINED APPLICABLE TO THE ENTIRE SUM.

*EXCEEDED APPLIED

RELEVANT

"GIVEN THAT THE ROYALTY PAYABLE IS BASED UPON A LICENSEE'S ACCOUNTING YEAR, AMENDMENT (E) IS NECESSARY TO COVER THE ROYALTY FOR ANY ODD PERIODS OUTSIDE A FULL ACCOUNTING YEAR." MR TSAO SAID.

"AS THE ACCOUNTING YEAR OF THE CURRENT LICESEES BEGINS ON JANUARY 1, THIS PROVISION WOULD COVER THE MONTH OF DECEMBER 1988.

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THE AMENDMENTS TO CLAUSES 5 11 AND 12 WERE PURELY DRAFTING POINTS, HE SAID.

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