Limitation on
advances to directors, etc. of bank.
(Cap. 361.) (Cap. 333.)
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(2) For the purposes of subsection (1), directions given in a notice under that subsection-
(a) may be expressed to apply to all authorized institutions or to a class of
authorized institutions specified in the notice; and
(b) may specify—
(i) the types of business practices which an authorized institution shall not engage in; and
(ii) what constitutes a single party for the purposes of any such direction. (3) Every director and every manager of an authorized institution which contravenes subsection (1) commits an offence and is liable-
(a) on conviction upon indictment to a fine of $200,000 and to imprisonment for 2 years and, the case of a continuing offence, to a further fine of $10,000 for every day during which the offence continues; 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.
83. (1) A bank shall not grant any facility specified in subsection (3) to or on behalf of any person or body specified in subsection (4) if the aggregate amount of such facilities for the time being granted by that bank to or on behalf of any one or more such persons or bodies would thereby exceed 10 per cent of the paid-up capital and reserves of the bank.
(2) Subject to subsection (1), a bank shall not grant any facility specified in subsection (3) to or on behalf of any person specified in subsection (4)(a), (b) or (c) if the aggregate amount of such facilities for the time being granted by that bank to or on behalf of that person or any of his relatives would thereby exceed $250,000.
(3) For the purposes of subsections (1) and (2), the following facilities are specified-
(a) the granting, or permitting to be outstanding, of unsecured advances, un- secured loans or unsecured credit facilities including unsecured irrevocable documentary letters of credit;
(b) the giving of unsecured financial guarantees; and
(c) the incurring of any other unsecured liability.
(4) For the purposes of subsections (1) and (2), the following persons and bodies are specified-
(a) any director of the bank;
(b) any relative of any such director;
(c) any employee of the bank who is responsible, either individually or as a
member of a committee, for determining loan applications;
(d) any firm, partnership or non-listed company (other than a firm, partnership or non-listed company which is an authorized institution, or a bank incorporated outside Hong Kong which is not licensed under this Ordinance but is approved by the Commissioner for the purposes of this paragraph) in which the bank or any of its directors or any relative of any of its directors is interested as director, partner, manager or agent; and
(e) any individual, firm, partnership or non-listed company of which any director of the bank or any relative of any such director is a guarantor. (5) For the purposes of subsection (4)—
"non-listed company"-
(a) in relation to any time prior to the day appointed under section 27 of the Stock Exchanges Unification Ordinance, means a company not listed on a stock exchange under section 25 of the Securities Ordinance;
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(b) on and after that day, means a company not listed on the Unified
Exchange:
Provided that a 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 and the spouse and the parents, brothers and
sisters of the spouse of any such ascendant or descendant;
(b) any brother or sister, aunt or uncle and any nephew or niece,
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. (6) The provisions of this section shall apply to a facility granted to or on behalf of a person or body jointly with another person or body as they apply to a facility granted to or on behalf of a person or body severally.
(7) This section shall not apply to the purchase of telegraphic transfers.
(8) For the purposes of subsections (2) and (4), a facility granted to or on behalf of any firm, partnership or non-listed company which a director of a bank or a relative of a director of a bank is able to control, or to or on hehalf of a business or undertaking of which a director of a bank or a relative of a director of a bank is the sole proprietor, shall be deemed to be granted to or on behalf of such director or relative of a director.
(9) Every director and every manager of a bank which contravenes subsec- tion (1) or (2) commits an offence and is liable-
(a) on conviction upon indictmnet to a fine of $200,000 and to imprisonment for 2 years and, in the case of a continuing offence, to a further fine of $10,000 for every day during which the offence continues; 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.
84. (1) A licensed deposit-taking company shall not grant any facility specified in subsection (3) to or on behalf of any person or body specified in subsection (6)(d) or (e) if the aggregate amount of such facilities for the time being granted by the licensed deposit-taking company to or on behalf of any one or more such persons or bodies would thereby exceed 10 per cent of the paid-up capital and reserves of the licensed deposit-taking company.
(2) A licensed deposit-taking company shall not grant any facility specified in subsection (3) to or on behalf of any person specified in subsection (6)(a), (b) or (c).
(3) For the purposes of subsections (1) and (2), the following facilities are specified-
(a) the granting, or permitting to be outstanding, of unsecured advances, un- secured loans or unsecured credit facilities including unsecured irrevocable documentary letters of credit;
(b) the giving of unsecured financial guarantees; and
(c) the incurring of any other unsecured liability.
(4) A registered deposit-taking company shall not grant any of the following facilities to or on hehalf of any person specified in subsection (6)——
Limitation on advances to directors, etc. of companies. deposit-taking
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