XN000022-1994-06-29 — Page 29

16

WEDNESDAY, JUNE 29, 1994

REGULATION ON REDEMPTION OF SHARES

REDEMPTION OR REPURCHASE OF ITS OWN SHARES BY A LISTED COMPANY IS REGULATED BY THE HONG KONG CODE ON SHARE REPURCHASES ADMINISTERED BY THE SECURITIES AND FUTURES COMMISSION AND THE LISTING RULES OF THE STOCK EXCHANGE OF HONG KONG LTD (SEHK).

BOTH OF THEM ARE NON-STATUTORY, THE SECRETARY FOR FINANCIAL SERVICES, MR MICHAEL CARTLAND, SAID IN A WRITTEN REPLY TO A QUESTION BY THE HON CHIM PUI-CHUNG IN THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY).

UNDER THE CODE, A LISTED COMPANY THAT WISHES ΤΟ REDEEM OR REPURCHASE ITS OWN SHARES IS REQUIRED TO MAKE A GENERAL OFFER TO ALL OF ITS SHAREHOLDERS IN ACCORDANCE WITH THE RULES SET OUT IN THE CODE.

HOWEVER, MR CARTLAND NOTED THAT THE COMPANY MIGHT SEEK EXEMPTION FROM THIS REQUIREMENT IF IT DID NOT WISH TO MAKE A GENERAL OFFER.

"THE

MOST COMMON EXEMPTION A COMPANY MAY RESORT TO IS FOR ON- MARKET REPURCHASE, THAT IS, THE COMPANY MAY REPURCHASE ITS SHARES THROUGH THE FACILITIES OF SEHK, IN WHICH CASE, THE REPURCHASE WILL BE SUBJECT TO THE LISTING RULES OF SEHK.

"THE PURPOSE OF THE CODE AND THE RELEVANT SECTIONS OF THE LISTING RULES IS TO ENSURE THAT ALL SHAREHOLDERS WILL BE TREATED FAIRLY IN THE EVENT THAT THEIR COMPANY WISHES TO REDEEM OR REPURCHASE ITS SHARES.'

"

MIR CARTLAND SAID THE ARRANGEMENT WAS WORKING WELL AND WAS NOT UNDER REVIEW.

0

RULES ADEQUATE ON DERIVATIVE WARRANTS ISSUE

THE ADMINISTRATION AND THE REGULATOR CONSIDER THAT THE ADEQUATELY DEAL WITH THE QUESTION OF VESTED INTERESTS TO THE ISSUE OF DERIVATIVE WARRANTS.

RULES

THIS

LISTING RELATING

MR

WAS STATED BY THE SECRETARY FOR FINANCIAL SERVICES, CARTLAND, MICHAEL

IN A WRITTEN REPLY TO THE HON CHIM PUI-CHUNG'S QUESTION IN THE LEGISLATIVE COUNCIL THIS (WEDNESDAY) MORNING.

THE RULES PROHIBIT SUCH ISSUE DIRECTLY OR INDIRECTLY BY A CONTROLLING SHAREHOLDER OR A PERSON WHO HAS EFFECTIVE MANAGEMENT CONTROL OF THE UNDERLYING LISTED COMPANY.

AS A RESULT, DERIVATIVE WARRANTS ISSUED OVER SHARES OF COMPANIES ARE ISSUED BY ARMS-LENGTH THIRD PARTIES.

LISTED

/MR CARTLAND