TNAG-2755-FCO40-3972-Banking-situation-in-Hong-Kong-1993 — Page 55

A 10

CAP. 379]

Overseas Trust Bank : Compensation of Registered Holders of Shares: Regulations

[1986 Ed.

[Subsidiary]

27 of 19x6 S 137

Cap 185 1

5. (1) The amount the purchaser would, on the day prior to commencement In the ordinary course of business, have paid referred to in paragraph 2 shall be the amount produced by deducting the amount of company reconstruction costs (if any) calculated in accordance with paragraph 6 from the value of the reconstructed company as a going concern, calculated in accordance with paragraph 7.

(2) The amount the purchaser would on the day prior to commencement in the ordinary course of business have paid shall be deemed to he ni if the sum calculated In accordance with sub-paragraph (1) is a negative amount.

6. (1) "Company reconstruction costs" means the amount (if any) by which revised shareholders funds calculated in accordance with sub-paragraph (2) is less than required shareholders funds calculated in accordance with sub-paragraph (3).

(2) "Revised shareholders funds" shall be calculated by preparing a new balance sheet for the company as on the day prior to commencement after making all necessary adjustments and provisions, including-

(a) making proper and prudent provision against shareholders funds for bad or doubtful debts of no less sum than the sum determined in accordance with paragraph 4:

thi crediting or charging (as the case may be) the shareholders funds by-

the amount of any revaluation of assets made under paragraph 3(b)(DE

(ii) the amount of any adjustment of liabilities of the company made under paragraph 3(h)((A)

(3) "Required shareholders funds" means the amount of shareholders funds that would be necessary in relation to the assets and liabilities shown in the new balance sheet prepared in accordance with sub-paragraph (2) to enable the company to comply with sections 77. 81. 83. 87. 88 and 90 of the Banking Ordinance.

7. (1) The value of the reconstructed company as a going concern shall be ascertained by multiplying the price earnings ratio. calculated in accordance with sub-paragraph (2), by the earnings of the reconstructed company on the day prior to commencement, calculated in accordance with sub-paragraph (3).

(2) The price earnings ratto shall be calculated by reference to the average of the price earnings ratios, during the period 27 May 1985 to 31 May 1985, of The Hongkong and Shanghai Banking Corporation. The Hang Seng Bank Limited, the Bank of East Asia Limited and The Wing Lung Bank Limited or, if the Tribunal thinks that reference inappropriate. by reference to the reciprocal of the yield during the period 27 May 1985 to 31 May 1985 on long term fixed rate Hong Kong dollar bonds or certificates of deposit, and by making such adjustments to that average or reciprocal, as the case may be, as the Tribunal considers reasonable to take into

account-

(a) the fact that the purchaser would gain control of the company: (b) the prospects for the company after commencement.

(3) The earnings of the reconstructed company on the day prior to commence- ment shall be calculated by taking the average of the earnings of the company published for the 3 consecutive financial years ending 30 June 1984 reduced by such amount (if any) as the Tribunal considers appropriate in the event that the average of the return on the gross assets of the company for that period is higher than the average of the averages of the returns on the gross assets achieved in the same period of the banks mentioned in sub-paragraph (2).

(4) In this paragraph "return on the gross assets" means the return on the gross assets calculated on the earnings and the gross assets shown in the audited accounts published for a financial year.

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