XN000022-1997-04-23 — Page 20

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Bankruptcy (Fees and Percentages) (Amendment) Order 1997

Following is the speech by the Secretary for Financial Services, Mr Rafael Hui, in moving the Bankruptcy (Fees and Percentages) (Amendment) Order 1997, in the Legislative Council today (Wednesday):

Mr President,

I move the first motion standing in my name on the Order Paper.

The Bankruptcy (Fees and Percentages) (Amendment) Order 1997, and the next three motions that I am going to move, namely the Bankruptcy (Amendment) Rules 1997, the Companies (Fees and Percentages) (Amendment) Order 1997, and the Companies (Winding-up) (Amendment) Rules 1997 have all been made by the Chief Justice. These are to increase the fees payable to the Official Receiver's Office in relation to proceedings in bankruptcy under the Bankruptcy Ordinance and in the winding-up of companies under the Companies Ordinance.

The Bankruptcy (Fees and Percentages) (Amendment) Order 1997 deals with 13 fees and charges in respect of bankruptcies. Most of them were last revised in February 1996. With a few exceptions, we propose to revise them generally in line with the increase in costs due to inflation over the period as calculated by the movement of the Government Consumption Expenditure Deflator (GCED). The actual fee revisions will in some cases differ slightly from the relevant rate of 8.2% due to the need to round fees up or down so as to facilitate collection. It should be stressed that the size of the increases when expressed in dollar terms is small.

Last year we proposed to deal with one or two fees that had at that time not been increased since 1988 by bringing them up to date in phases over 5 years. In this second year we therefore propose increasing by 20% the maximum fee payable to the Official Receiver in each bankruptcy for specified payments of money out of the Bankruptcy Estates Account.

The expected revenue from the fee items being revised represents only around 13% of the Official Receiver's total revenue. This is because the majority of his revenue is derived from fees which are calculated according to fixed percentages, based on the realization of assets, dividends paid out and interest on bank deposits. The total amount of additional income from the proposed increases in bankruptcy fees and charges is estimated to be about $0.33 million per annum. This represents an average increase of just 1.7% when expressed as a percentage of the total bankruptcy income, estimated to be $20.2 million for 1997-98.

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