XN000022-1989-07-12 — Page 10

WEDNESDAY, JULY 12, 1989

FIRST, THE BILL INCREASED

8

SUBSTANTIALLY

MIGHT BE IMPOSED BY THE INSIDER DEALING TRIBUNAL.

THE SANCTIONS WHICH

AT PRESENT, THE ONLY SANCTION AVAILABLE WAS PUBLIC CENSURE, BUT THIS WAS INADEQUATE AND MORE EFFECTIVE DETERRENTS WERE REQUIRED.

TO THIS END, MR NENDICK SAID, THE BILL EMPOWERED THE TRIBUNAL TO IMPOSE SEVERE PENALTIES ON PERSONS FOUND TO HAVE BEEN INVOLVED IN INSIDER DEALING, DISQUALIFY SUCH PERSONS FROM THE DIRECTORSHIP OR THE MANAGEMENT OF ANY PUBLIC OR PRIVATE COMPANY FOR UP ΤΟ FIVE YEARS, REQUIRE THE DISGORGEMENT OF ANY PROFIT MADE OR LOSS AVOIDED, AND IMPOSE A FINE OF UP TO THREE TIMES THE RELEVANT AMOUNT,

T

"WE BELIEVE THAT TOUGHER SANCTIONS COUPLED WITH THE FLEXIBILITY OF THE TRIBUNAL SYSTEM IS THE RIGHT APPROACH IN TACKLING THE PROBLEM OF INSIDER DEALING IN HONG KONG, THE ACTING FINANCIAL SECRETARY SAID,

"HOWEVER, AS I HAVE SAID PREVIOUSLY, WE HAVE NOT RULED OUT THE OPTION OF CRIMINALISATION ENTIRELY. WE SHALL REVIEW THE MATTER IN THREE YEARS' TIME IN THE LIGHT OF EXPERIENCE OF INCREASED TRIBUNAL SANCTIONS UNDER THE BILL, HE ADDED.

SECONDLY, THE BILL PROVIDED A MORE COMPREHENSIVE DEFINITION OF INSIDER DEALING. IT NOW CAUGHT AS AN INSIDER A PERSON WHO WAS CONTEMPLATING OR HAD CONTEMPLATED A TAKEOVER BID AS WELL AS ANY PERSON INFORMED BY AN INSIDER, COMMONLY KNOWN AS A "TIPPER"

"IT ALSO CATCHES DEALING IN THE SECURITIES OF A RELATED CORPORATION AND THE PROMOTION OF INSIDER DEALING ON AN OVERSEAS STOCK EXCHANGE," MR NENDICK EXPLAINED.

"MOREOVER, IT ADDS AN IMPORTANT NEW REQUIREMENT THAT AN INSIDER OR TIPPEE MUST KNOW THAT HE IS IN POSSESSION OF INSIDER INFOMATION, HE ADDED.

THIRDLY, THE BILL GRANTED A LIMITED RIGHT OF APPEAL. PERSONS FOUND TO HAVE BEEN INVOLVED IN INSIDER DEALING MIGHT APPEAL ON A POINT OF LAW TO THE COURT OF APPEAL.

"WE HAVE NOT PROPOSED A GENERAL RIGHT OF APPEAL BECAUSE WE BELIEVE THE TRIBUNAL IS BEST PLACED TO DECIDE ON THE FACTS OF THE CASE. THIS RIGHT WILL BE WITHOUT PREJUDICE TO THE EXISTING RIGHT JUDICIAL REVIEW," MR NENDICK POINTED OUT.

OF

BE

FOURTHLY, THE BILL REQUIRED THAT SITTINGS OF THE TRIBUNAL HELD IN PUBLIC UNLESS THE TRIBUNAL CONSIDERED THAT IN THE INTERESTS OF JUSTICE, A SITTING, OR ANY PART THEREOF, SHOULD BE HELD IN PRIVATE.

"AT PRESENT, THE TRIBUNAL'S PROCEEDINGS ARE IN PRIVATE. WE BELIEVE THAT IT IS IN THE WIDER PUBLIC INTEREST FOR PROCEEDINGS TO BE HELD IN PUBLIC, AS IN THE CASE OF CRIMINAL AND CIVIL PROCEEDINGS BEFORE A COURT OF LAW, MR NENDICK SAID.

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/FIFTHLY,

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