TNAG-1487-FCO40-2044-Hong-Kong-banking-Banking-Bill-1986-1986 — Page 52

A184

Ord. No. 27/86

Maintenance of reserve.

Maintenance

of adequate

provision for

bad and doubtful

debts and for

diminution of value of assets.

BANKING

(2) Every director and every manager of an authorized institution which contravenes subsection (1) commits an offence and is liable on conviction upon indictment or on summary conviction to a fine of $50,000 and, in the case of a continuing offence, to a further fine of $5,000 for every day which the offence continues.

PART XIV

Share Capital, Reserve anD DIVIDEND OF AUTHORIZED INSTITUTIONS

75. (1) Every bank incorporated in Hong Kong shall, before any dividend is declared, appropriate to its published reserve out of the published profit of each year, after due provision has been made for taxation--

(a) a sum equal to not less than one-third of such published profit; or

(b) such lesser sum, if any, as may be necessary so that the aggregate of the bank's paid-up share capital and its published reserve is not less than $200,000,000.

(2) Every deposit-taking company which is incorporated in Hong Kong shall, before any dividend is declared, appropriate to reserve out of the profit of each year, after due provision has been made for taxation---

(a) a sum equal to not less than one-third of such profit; or

(b) such lesser sum, if any, as may be necessary so that—

(i) in the case of a registered deposit-taking company, the aggregate of the company's paid-up share capital and its reserve is not less than $20,000,000; and

(ii) in the case of a licensed deposit-taking company, the aggregate of the company's paid-up share capital and its reserve is not less than $150,000,000.

(3) No deposit-taking company shall pay any dividend out of the profits of a year previous to the year in respect of which the dividend is declared unless the aggregate of the company's paid-up share capital and reserve after such payment will be

(a) not less than $20,000,000 in the case of a registered deposit-taking company;

and

(b) not less than $150,000,000 in the case of a licensed deposit-taking company. (4) Every director and every manager of a bank which contravenes subsec- tion (1), and of a deposit-taking company which contravenes subsection (2) or (3), commits an offence and is liable-

(a) on conviction upon indictment to a fine of $200,000 and to imprisonment

for 2 years; or

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

months.

76. (1) Every authorized institution shall at all times maintain adequate provision--

(a) for its bad and doubtful debts, if any; and

(b) against the diminution, if any, of the value of its assets, or the materialising

of its contingent liabilities.

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

(a) on conviction upon indictment to a fine of $200,000 and to imprisonment

for 2 years; or

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

months.

t

BANKING

Ord. No. 27/86

77. (1) A bank incorporated in Hong Kong shall not carry on banking business in Hong Kong unless its share capital issued and paid-up is not less than $100,000,000, deduction having been made in respect of a debit balance, if any, appearing in the most recent audited annual accounts of the bank.

(2) Every director and every manager of a bank which contravenes this section commits an offence and is liable on conviction upon indictment to a fine of $500,000 and to imprisonment for 5 years and, in the case of a continuing offence, to a further fine of $25,000 for every day during which the offence continues.

A185

Minimum paid-up share capital of

licensed banks.

78. (1) A bank that is incorporated in Hong Kong shall not distribute any Restriction on extraordinary profits unless the aggregate of its paid-up share capital and published distribution of

extraordinary reserves after such distribution will be not less than $200,000,000.

profits.

(2) A deposit-taking company that is incorporated in Hong Kong shall not distribute any extraordinary profits unless the aggregate of its paid-up share capital and reserves after such distribution will be not less than—

(a) $20,000,000 in the case of a registered deposit-taking company; and (b) $150,000,000 in the case of a licensed deposit-taking company.

(3) Every director and every manager of a bank which contravenes subsec- tion (1), and of a deposit-taking company which contravenes subsection (2), commits an offence and is liable--

(a) on conviction upon indictment to a fine of $200,000 and to imprisonment

for 2 years; or

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

months.

PART XV

LIMITATIONS ON LOANS BY AND INTERESTS OF AUTHORIZED INSTITUTIONS

79. (1) In this Part-

"non-listed company" means a company not listed on the Unified Exchange:

Provided that any public statutory corporation designated for the purposes of this definition by the Financial Secretary by notice in the Gazette shall be deemed not to be a non-listed company;

"relative" means--

(a) any ascendant or descendant, any spouse or former spouse of any such ascendant or descendant, and any parent, brother or sister of any such spouse or former spouse;

(b) any brother or sister, aunt or uncle and any nephew or niece;

(c) any spouse or former spouse, any ascendant of any such spouse or former spouse, and any brother or sister, aunt or uncle or nephew or niece of any such spouse or former spouse,

and, for the purposes of this definition, any step-child shall be deemed to be the child of both its natural parent and of its step-parent and any adopted child to be the child of the adopting parent, and a spouse shall include anyone living as such;

"reserves" in relation to any authorized institution means reserves which appear in the accounts of the institution, and does not include any reserves which are represented by the writing down of the value of assets or by provision for the depreciation of fixed assets;

Interpretation and application.