XN000022-1996-01-10 — Page 6

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Mr Hearder said the number of new bankruptcies increased from 306 in 1994 to 455 last year.

"The majority of the increase was attributable to non-business individuals, only the minority concerned sole traders and partnerships," he said.

He added that although the total number of new court insolvencies had increased in 1995, it was still low in comparison with other overseas jurisdictions.

"Some of the economic reasons included the moderation which occurred in some parts of the economy such as the consumption sector, cash flow and credit problems, the consolidation in the stocks and property markets, and the 'spill-over' effect on China's micro-economic adjustment and control measures."

The businesses mainly affected by compulsory company liquidations and bankruptcies included garment and knitting manufacturing, company directors giving personal guarantees, restaurants and canteens, importers and exporters, electrical and electronic manufacturing, construction and engineering, and transportation and godowns.

Petitions were filed by trade creditors (35 per cent), the Director of Legal Aid (33 per cent), banks and financial institutions (20 per cent), landlords (5 per cent), shareholders (3 per cent), personal (1 per cent) and others (3 per cent).

On insolvency prosecutions, there were 120 summonses as against 77 in 1994 issued against bankrupts and directors of compulsory wound-up companies for failure to submit statement of affairs to the Official Receiver, failure to keep proper books and records and misconduct.

A total of 86 bankrupts or directors as against 72 in 1994 were convicted. The total amount of fines imposed by the court was $524,980 as against $548,380 in 1994.

Fifty warrants of arrest were issued against uncooperative bankrupts or directors in 1995 and 19 warrants were implemented.

Forty orders for disqualification of company directors were made by the Court in 1995. The directors concerned were prohibited from acting as directors for periods varying from one to three years. Total dividends declared by the Official Receiver during 1995 (excluding BCCHK) amounted to $71.7 million in 242 insolvencies, as against $62.58 million in 232 insolvencies in 1994.