TNAG-2755-FCO40-3972-Banking-situation-in-Hong-Kong-1993 — Page 54

1986 Ed.]

Overseas Trust Bank (Compensation of Registered Holders of Shares Regulations

[CAP. 379

A 9

C

C

(

C

2.

The value of a single share shall be calculated in accordance with the factors and principles set out in this Schedule and on the basis of the amount that a willing sole purchaser would on the day prior to commencement in the ordinary course of business have paid a willing seiler for all of the shares soid in one block after negotiating at arms length and with full knowledge of the true financial position and value of the company on the day prior to commencement divided by the total number of shares.

3. For the purpose of making the calculation under paragraph 2 the Tribunal shall-

{a} disregard-

(i) the acquisition under the Ordinance:

(ii) the possibility of such acquisition:

(iii) the possibility of any financial support or assistance being made directly or indirectly by or at the behest of the Hong Kong Government at or after commencement:

(iv) the possibility of any financial support or assistance being made by another bunk or financial institution except in the ordinary course of business:

()the possibility of any claim by the company against any director, servant, auditor, adviser or agent of the company.

and the effect that such events may have had on the amount to be calculated under that paragraph:

(b) assume that the purchaser would have-

(i) been a corporation with sulficient credit standing so as to be able to attract for the company inter bank deposits at normal inter bank interest rates and with sufficient funds at commencement to operate the company properly and prudentially as a going concern and in particular to recon- struct the company in accordance with paragraph 6:

(i) had as full and true knowledge of the financial position of the company on the day prior to commencement as it would have had if it had conducted its own thorough audit and investigation with full co-operation and disclosure by the company and its management, including, but without derogating from the generally thereof, knowledge of —

(A) the amount of its liabilities including contingent or deferred liabilities, capital commitments and contracts for future per- formance:

(B) the value of its banking assets after making a proper and prudent provision against bad or doubtful debts calculated in accordance with paragraph 4:

(C) any immediate funding requirements of the company and in particular whether, and to what extent, short term borrowings or other credit facilities might need to be made or retinanced by the company:

(D) the market value of all fixed assets and investments and any adjustments that might need to be made in the books of account of the company to state such assets at market value: and (E) in the light of his knowledge of matters set out in sub-sub-sub- paragraphs (A), (B), (C) and (D), the amount of shareholders funds including any accounted for in the form of inner reserves: (c) assume that all necessary consents to the sale and transfer of the shares

would be given:

(d) except as provided by paragraph 4 have regard only to information that would have been available to the purchaser on the day prior to com-

4.

mencement.

For the purpose of calculating the level of proper and prudent provision for a bad or doubtful debt to be made against each debt on the day prior to commencement the Tribunal shall accept as proper and prudent the provision made by the directors appointed under section 7 of the Ordinance against such debt as at 30 June 1985 uniess the Tribunaí is satisfied, having regard to the information that would have been available to the purchaser on the day prior to commencement, that the purchaser would have made different prudent provision against such debt in which event the Tribunal may determine the level of such provision.

[Subsidiary]