ENG-2003 — Page 135

FINANCIAL AND MONETARY AFFAIRS

Money Lenders

Under the Money Lenders Ordinance, anyone wishing to carry on business as a money lender must apply to a licensing court for a licence. The ordinance does not apply to authorised institutions under the Banking Ordinance.

Licence applications are, initially, submitted to the Registrar of Companies as Registrar of Money Lenders. A copy is also sent to the Commissioner of Police who may object to the application. The application is advertised, and any member of the public who has an interest in the matter has the right to object. During the year, 774 applications were received. Altogether, a total of 711 licences were granted, involving both new applications and outstanding applications brought forward from the previous year. At year-end, there were 775 licensed money lenders, including those whose applications for renewing their licences had yet to be approved.

The ordinance provides penalties for offences such as carrying on an unlicensed money-lending business. It also provides that any loan made by an unlicensed money lender shall not be recoverable by court action. With certain exceptions (primarily authorised institutions under the Banking Ordinance), any person, whether a licensed money lender or not, who lends or offers to lend money at an interest rate exceeding 60 per cent per annum commits an offence. Any agreement for the repayment of any such loan, or security given in respect of such loan is unenforceable.

Bankruptcies, Individual Voluntary Arrangement and Compulsory Winding-up The Official Receiver's Office administers the estates of individuals adjudged to be bankrupt by the court. The estates of companies ordered to be wound up by the court are administrated by insolvency practitioners from the private sector.

The Official Receiver or the insolvency practitioner appointed by him under a tendering scheme becomes the receiver of an individual debtor or provisional liquidator of a company when a bankruptcy order against the property of the debtor is made or a winding-up order against the company is made. Where the assets of an estate do not exceed $200,000, the Official Receiver or the insolvency practitioner appointed by him is usually appointed the trustee or the liquidator by way of a summary procedure order. In other cases, a meeting of creditors in bankruptcy, or meetings of creditors and contributories in compulsory liquidations, will be convened to decide whether the Official Receiver, the insolvency practitioner appointed by him. or some other fit persons from the private sector should be appointed the trustee or liquidator.

When acting as the trustee or liquidator, the Official Receiver or the insolvency practitioner appointed by him 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.

During the year, the court made 24 922 bankruptcy orders, 2 743 interim orders in individual voluntary arrangements and 1 248 winding-up orders. The assets realised by the Official Receiver during 2003 amounted to $136.4 million, while $115.9 million in dividends was paid to creditors in 1 690 insolvency cases. There were 1 207 cases assigned under the scheme for contracting out of summary winding-up cases.

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