TNAG-1725-FCO40-2438-Minutes-and-Hansards-of-the-Legislative-Council-of-Hong-Kong-1988 — Page 128

HONG KONG LEGISLATIVE COUNCIL — 20 January 1988

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SECRETARY FOR TRANSPORT: Yes, Sir, the second part of the study will include a wide range of other measures. For instance, tidal flow on Tai Po Road; differential toll scheme; restricting the use of certain types of vehicles at certain hours; and further increasing the capacity of public transport. All these findings will be included in the report in April.

Government Business

First Reading of Bill

COMPANIES (AMENDMENT) BILL 1988

Bill read the First time and ordered to be set down for Second Reading pursuant to Standing Order 41(3).

Second Reading of Bills

COMPANIES (AMENDMENT) BILL 1988

THE FINANCIAL SECRETARY moved the Second Reading of: 'A Bill to amend the Companies Ordinance'.

He said: Sir, I move that the Companies (Amendment) Bill 1988 be read a Second time.

The purpose of this Bill is to amend section 161B of the Companies Ordinance in order to exempt authorised financial institutions from the require- ment to disclose in their annual accounts details of loans on normal commercial terms to individual directors and other officers. Instead, such details will be made available for public inspection for 14 days prior to an institution's annual general meeting and for seven days thereafter.

Section 161B of the Companies Ordinance requires every company incor- porated in Hong Kong to set out in its annual accounts detailed information concerning loans made by the company to any of its directors and other officers of the company, or to any company controlled by any of its directors. Authorised financial institutions, which mean in this context banks or deposit- taking companies licensed or registered under the Banking Ordinance, are also subject to this requirement. By the very nature of banking business, loans to bank directors and other officers of banks are not uncommon, nor are loans to companies controlled by these directors.

The banking community has expressed serious concern that the present disclosure requirement involves the inclusion of cumbersome and excessive detail in their annual accounts. Furthermore, publication could constitute a