TNAG-1649-FCO40-2296-Hong-Kong-Commissioner-of-Banking-s-annual-report-for-1986--1987 — Page 56

Events in 1986

24.

At the beginning of the year, it was clear

that four banks were faced with major restructuring to overcome various problems which had been identi- fied. The banks were Wing On, Ka Wah, Far East and Union. The Hang Seng Bank had already taken over the management of Wing On Bank in December,

1985,

and by the end of June, 1986, the capital recon-

struction of Wing On Bank had taken place whereby Hang Seng Bank became the controlling shareholder. Smooth negotiations also took place leading to IBI

Asia (Holdings) Ltd. acquiring a 65 per cent

interest in Far East Bank by June, 1986. Neither

Wing On Bank nor Far East Bank were listed on the

Stock Exchange.

25.

As regards Ka Wah Bank, a stock exchange listed company, negotiations had also begun in the previous year regarding the acquisition of the bank by other parties. In January, 1986, the Commis-

sioner, under Section 13(1)(ii) of the Banking Ordinance, 1964, appointed an adviser to the Ka Wah Bank to assist in the supervision of the Bank in the proper conduct of its business. In the meantime,

negotiations had begun with China International Trust & Investment Corp. (HK) Ltd. (CITIC) with the

object of CITIC becoming the owners of the bank.

These negotiations were completed to enable the

capital reconstruction of the bank in June,

in June, 1986,

with CITIC acquiring the majority interest in the

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