APR 09 '86 16:37 GIS HK
P.2
STATEMENT BY THE HONOURABLE THE FINANCIAL SECRETARY IN LEGISLATIVE COUNCIL: WEDNESDAY 9 APRIL 1986
Exchange Fund and Banking Issues
During the course of the Budget Debate several Members, being unaware of the complicated issues involved and troubled by press reports, reasonably sought clarification about the Exchange fund, its use, the Ka Wah Bank takeover by CITIC, and general policy towards
I am sure that troubled small locally incorporated banks. the totally different Union Bank situation would have been included if they could have anticipated events. concern has since been expressed by the media. be argued that such matters of considerable and justifiable public interest would more properly be dealt with in the forthcoming debate on the important new Banking Bill.
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There is however widespread concern and I Am sure that it is right to respond as soon as possible.
2.
First I wish to address the speeches of two Members whose comments on the legal background to the responsibilities and duties of the Financial Secretary in this field seem to merit particular attention.
3.
The first Member said on the opening day of the
debate in relation to CITIC's investment in Ka Wah
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"this is a very dangerous precedent for sidestepping
the Finance Committee".
He later said ..."this raises a
constitutional point of fundamental importance".
Lu
I do indeed understand his concern prima facie,
but 1 trust the following explanation will assuage those
concerns.
5.
First the law as it exists.
Section 3(1) of
the Public Finance Ordinance provides generally that monies received by the Government shall form part of the
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