1964_SECURITIES_ORDINANCE — Page 16

1989 Ed.]

Securities

[CAP. 333

15

(3) Any approval under subsection (2) may be given subject to such conditions as the Commission thinks fit.

(Amended 10 of 1989 s. 65)

4. Definition of related corporation

(1) Where a corporation-

(a) is the holding company of another corporation;

(b) is a subsidiary of another corporation; or

(c) is a subsidiary of the holding company of another corporation,

that first-mentioned corporation and that other corporation are, for the purposes of this Ordinance, deemed to be related to each other.

(2) For the purposes of subsection (1), a corporation shall, subject to subsection (3), be deemed to be a subsidiary of another corporation if—

(a) that other corporation-

(i) controls the composition of the board of directors of the first-mentioned corporation;

(ii) controls more than half of the voting power of the first-mentioned corporation; or

(iii) holds more than half of the issued share capital of the first-mentioned corporation (excluding any part which carries no right to participate beyond a specified amount on a distribution of either profits or capital); or (Amended L.N. 140 of 1974)

(b) the first-mentioned corporation is a subsidiary of any corporation which is that other corporation's subsidiary.

(3) For the purposes of subsection (2), the composition of a corporation's board of directors shall be deemed to be controlled by another corporation if that other corporation by the exercise of some power exercisable by it, without the consent or concurrence of any other person, can appoint or remove all or a majority of the directors, and for the purposes of this provision, that other corporation shall be deemed to have power to appoint or remove a director if— (Amended 62 of 1976 s. 3)

(a) a person cannot be appointed as a director without the exercise in his favour by that other corporation of such a power; or

(b) a person's appointment as a director follows necessarily from his being a director or other officer of that other corporation.

(4) In determining whether one corporation is a subsidiary of another corporation-

(a) any shares held by or power exercisable by that other corporation in a fiduciary capacity shall be treated as not held or exercisable by it;