TNAG-1487-FCO40-2044-Hong-Kong-banking-Banking-Bill-1986-1986 — Page 47

A174

Ord. No. 27/86

BANKING

BANKING

Ord. No. 27/86

A 175

Examination and investigation of authorized institutions, etc.

Production of

authorized institution's books, etc.

(3) Any authorized institution aggrieved by a decision of the Commissioner under subsection (1) or (2) may appeal to the Governor in Council against the decision.

55. (1) Without limiting the generality of section 52, the Commissioner may at any time, with or without prior notice to the authorized institution, examine the books, accounts and transactions of any authorized institution and, in the case of an authorized institution incorporated in Hong Kong, any local branch, overseas branch, overseas representative office or subsidiary, whether local or overseas, of such institution.

(2) Without limiting the generality of section 52, the Commissioner shall investigate the books, accounts and transactions of an authorized institution—

(a) if shareholders of the institution holding not less than one-third of the total number of issued shares in the institution, or depositors holding not less than one-tenth of the gross amount of the total deposit liabilities in Hong Kong of the institution or a sum equal to the aggregate of the paid-up share capital of the institution and its published reserve, whichever is the greater, apply to him to make such an investigation and submit to him such evidence as he considers necessary to justify the investigation and furnish such security for the payment of the costs of the investigation as he may require;

or

(b) if the institution suspends payment or informs him of its intention to

suspend payment.

(3) Where an investigation is made by the Commissioner pursuant to subsec- tion (2), the Financial Secretary may order that all expenses incurred in such investigation shall be defrayed-

(a) by the authorized institution; or

(b) if the investigation was made pursuant to subsection (2)(a), either wholly by the persons who applied for the making of the investigation or partly by the authorized institution in such proportions as he considers to be just.

56. (1) For the purposes of an examination or investigation under section 55, an authorized institution shall afford the person carrying out the examination or investigation access to its books and accounts, to documents of title to its assets and other documents, to all securities held by it in respect of its customers' transactions and its cash and to such information and facilities as may be required to conduct the examination or investigation, and shall produce to the person carrying out the examination or investigation such books, accounts, documents, securities, cash or other information as he may require:

Provided that, so far as is consistent with the conduct of the examination or investigation, such books, accounts, documents, securities and cash shall not be required to be produced at such times and such places as shall interfere with the proper conduct of the normal daily business of the institution.

(2) Every director and every manager of an authorized institution which contravenes this section commits an offence and is liable-

(a) on conviction upon indictment to a fine of $100,000 and to imprisonment

for 12 months; or

(b) on summary conviction to a fine of $50,000 and to imprisonment for 6

months,

and, in the case of a continuing offence, to a further fine of $5,000 for every day during which the offence continues.

(3) If any authorized institution produces any book, account, document, security or information whatsoever under this section which is false in a material particular, every director and every manager of the institution commits an offence and is liable—

(a) on conviction upon indictment to a fine of $500,000 and to imprisonment

for 2 years; or

(b) on summary conviction to a fine of $50,000 and to imprisonment for 6

months.

57. (1) Where the Commissioner has assumed control of the business of an Control of authorized institution under section 52(1)(C) or pursuant to an order of the Governor authorized

institution by the in Council under section 53(1)(ii) or some other person has assumed control of the

Commissioner. business of an authorized institution pursuant to a direction under section 52(1)(C) or an order of the Governor in Council under section 53(1)(ii), then, subject to subsection (2), the Commissioner or such other person, as the case may be, shall remain in control and continue to carry on the business of that institution in the name and on behalf of the institution until it is no longer necessary, in the opinion of the Financial Secretary, for the Commissioner or such other person to remain in control of the institution.

(2) Where the Commissioner has assumed control of the business of an authorized institution under section 52(1)(C) or pursuant to an order of the Governor in Council under section 53(1)(ii) or some other person has assumed control of the business of an authorized institution pursuant to a direction under section 52(1)(C) or an order of the Governor in Council under section 53(1)(ii), the Governor in Council, upon the application of the institution, may, if he is satisfied that it is no longer necessary for the protection of the depositors of the institution that the Commissioner or such other person should remain in control of the business of the institution, order that the Commissioner or such other person shall cease to control the business of the institution as from a date specified in the order.

(3) Where the Commissioner has assumed control of the business of an authorized institution under section 52(1)(C) or pursuant to an order of the Governor in Council under section 53(1)(ii) or some other person has assumed control of the business of an authorized institution pursuant to a direction under section 52(1)(C) or an order of the Governor in Council under section 53(1)(ii) or any such control has been relinquished pursuant to any of the provisions of this section, the Financial Secretary shall cause to be published in the Gazette a notification of the fact of the assumption or cessation of such control, as the case may be.

Authorized

institution under

control of Commissioner to

co-operate with

58. (1) Where the Commissioner has assumed control of the business of an authorized institution under section 52(1)(C) or pursuant to an order of the Governor in Council under section 53(1)(ii), or some other person has assumed control of the business of an authorized institution pursuant to a direction under section 52(1)(C) or an order of the Governor in Council under section 53(1)(ii), the institution shall Commissioner. submit its business to the control of the Commissioner or such other person and shall provide him with the services of such members of its staff and such other facilities as he may consider necessary for carrying on the business of the institution and in connexion therewith the directors and managers shall comply with and carry out any directions which the Commissioner or such other person may give to them.

(2) Without limiting the generality of subsection (1), where by reason of the absence of directors or for any reason whatsoever the seal of an authorized institution whose business is-

(a) in the control of the Commissioner under section 52(1)(C) or pursuant to

an order of the Governor in Council under section 53(1)(ii); or

(b) in the control of some other person pursuant to a direction under sec- tion 52(1)(C) or an order of the Governor in Council under section 53(1)(ii),

cannot be affixed to an instrument in accordance with the institution's articles of association or regulations, the seal may be affixed in the presence of, and its affixing may be attested by, the Commissioner or such other person or a person authorized for the purpose by the Commissioner or such other person.