TNAG-1153-FCO40-1433-Relations-between-Hong-Kong-and-international-organisations-1982 — Page 110

GPS 270

UNCLASSIFIED

ADMIN IN CONFIDENCE

FM HONG KONG 0507072 JAN 82

TO ROUTINE UKDEL IMF/IBRD WASHINGTON

TELEGRAM NUMBER 1 OF 5 JANUARY

INFO HONG KONG GOVT OFFICE LONDON

-HAK 022/1 (WP) 1981

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SECTION 24 OF THE MONEYLENDERS ORDINANCE 1980, PROVIDES THAT ANY

PERSON WHO LENDS MONEY AT AN INTEREST RATE OF 60 PER CENT OR MORE COMMITS AN OFFENCE: THE LENDER IS LIABLE TO A FINE AND IMPRISONMENT, AND CANNOT SUE FOR RECOVERY OF THE SUM LENT.

2. SECTION 25 OF THE SAME ORDINANCE PROVIDES THAT ANY LOAN AT A

RATE OF 48 PER CENT OR MORE IS PRESUMED TO BE EXTORTIONATE, AND SO THE LENDER CANNOT SUE FOR RECOVERY OF THE SUM LENT: BUT A COURT CAN DECLARE THAT IN ALL THE CIRCUMSTANCES OF THE CASE, INCLUDING THE CREDIT RISK AND OTHER FACTORS, A RATE OF 48 PER CENT OR MORE, BUT NOT AS MUCH AS 60 PER CENT, IS NOT EXTORTIONATE, AND THE LENDER

CAN THEN SUE FOR RECOVERY.

3. THESE TWO SECTIONS APPLY TO ANY PERSON, COMPANY, ETC LENDING MONEY IN HONG KONG, INCLUDING BANKS AND DEPOSIT-TAKING COMPANIES. 4. WE ARE APPALLED TO LEARN FROM YOUR TELEGRAM THAT THE IMF HAVE

STILL NOT MANAGED TO PUBLISH THIS LEGISLATION. WE DID A GREAT DEAL OF WORK, AT VERY SHORT NOTICE, FOR THE FUND STAFF TWO YEARS AGO. IT IS APPARENT THAT OUR TIME WAS TOTALLY WASTED, SINCE WE HAVE SUBSEQUENTLY MADE EXTENSIVE REVISIONS TO OUR LEGISLATION ON BANKS

AND ON DEPOSIT-TAKING COMPANIES : 5 AMENDING ORDINANCES WERE ENACTED IN 1981 AND ONE IN 1980. SO THE IMF'S COLLECTION OF LAWS IS ALREADY OUT OF DATE, AS REGARDS HONG KONG. IS THE STAFF REALLY CONTENT WITH THIS SITUATION?. IT CANNOT BRING THEM ANY CREDIT, AND BY IGNORING THE WORK WE HAVE ALREADY DONE TO REVISE AND UPDATE

OUR BANKING AND MONETARY LEGISLATION, IT WILL BRING NO CREDIT TO HONG KONG. INCIDENTALLY, THE ORDINANCES MENTIONED IN PARAGRAPH 2 OF YOUR TELEGRAM WERE SENT OUT IN JULY 1980, NOT AS YOU SAY EARLIER THIS YEAR.

MACLEHOSE

See

MONETARY HK&GD

COPIES TO:-

THIS TELEGRAM

HONG KONG GOVT. OFFICE LONDON

WAS NOT ADVANCED

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