ENG-2002 — Page 131

FINANCIAL AND MONETARY AFFAIRS

liquidations will be convened to decide whether the Official Receiver or some other fit persons from the private sector should be appointed the trustee or liquidator.

When he acts as the trustee or liquidator, the Official Receiver investigates the affairs of the bankrupt or the wound-up company, realises assets and distributes dividends to creditors. The Official Receiver also prosecutes certain offences set out in the Bankruptcy and Companies Ordinances, applies for disqualification orders against unfit company directors, supervises the work of outside liquidators and trustees, and monitors the funds held by liquidators in both compulsory and voluntary liquidations.

To cope with the large increase in the workload of the Official Receiver, a tendering scheme has been established to contract out the summary winding-up cases to private sector insolvency practitioners. Under the scheme, these private sector insolvency practitioners are appointed by the Official Receiver as provisional liquidators in place of the Official Receiver and their remuneration is subsidised by government funds up to the limits submitted in their tenders.

During the year, the court made 25 328 bankruptcy orders, 805 interim orders in individual voluntary arrangements and 1 292 winding-up orders. The assets realised by the Official Receiver during 2002 amounted to $133.7 million, while $110.7 million in dividends was paid to creditors in 1 200 insolvency cases. There were 1 228 cases assigned under the scheme for contracting out of summary winding-up cases.

The Companies (Corporate Rescue) Bill, which was introduced into the Legislative Council in May 2001, aims to put in place a statutory corporate rescue procedure for companies in financial difficulty. The Legislative Council has set up a Bills Committee to examine the bill. In the light of the comments expressed by the Bills Committee, the Government is considering possible changes to certain provisions in the bill with a view to conducting a further round of consultation with concerned parties.

Professional Accountancy

Hong Kong had 20 045 registered professional accountants at year-end. Of these, 3 126 were certified public accountants (CPAs) or public accountants, who are in public practice and entitled to perform statutory audits. There were 1 058 CPA firms and 118 corporate practices registered at year-end.

The Hong Kong Society of Accountants is a self-regulatory body established under the Professional Accountants Ordinance with a wide range of responsibilities for registering professional accountants, maintaining accounting, auditing and ethical standards for the profession and conducting training programmes and examinations to qualify professional accountants.

Monetary Policy

Hong Kong's monetary policy objective is to maintain currency stability. Given the highly externally oriented nature of the Hong Kong economy, this objective is further defined as a stable external value for the currency in terms of a fixed exchange rate against the US dollar at the rate of $7.80 to US$1. This clear monetary policy objective is achieved through the linked exchange rate system, which was introduced in October 1983 after a nine-year period during which the Hong Kong dollar floated and the exchange rate was volatile.

The linked exchange rate system is in essence a currency board system with two distinctive features: first, full backing of the monetary base; and second, convertibility

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