TNAG-1649-FCO40-2296-Hong-Kong-Commissioner-of-Banking-s-annual-report-for-1986--1987 — Page 57

bank and taking over its management, the Commis-

sioner having withdrawn the Adviser.

26.

.

The problems of Union Bank, another listed

company which was under intensive care, had become more public in June, 1985, when its accounts were

qualified by the bank's auditors. The Chairman of

the bank unfortunately became ill and left Hong Kong

for medical treatment. Various non-executive

directors resigned and in March, 1986, under Section

13 (1) (iii) of the Banking Ordinance, 1964, the

Commissioner assumed control of the Union Bank

appointing Jardine Fleming and Co. Ltd. to manage

the bank on his behalf. This proved a successful

operation with Jardine Fleming making a significant

improvement in the bank's affairs during the period

of their management. At the end of June, 1986, Modern Concepts Ltd., a company controlled by China

Merchant Steam Navigation Co. Ltd. acquired control

of Union Bank and the Commissioner was able to

withdraw his control.

27.

In the meantime another bank, Hong Nin

Bank, had been under close supervision with the owners of the bank wishing to sell to a stronger

party. To maintain a better supervision of the

proceeding, the Commissioner appointed an adviser to the bank to supervise the proper conduct of the

bank's business. At the beginning of September, however, the Commissioner considered it necessary to

assume full control of the bank under Section

14