Description
LAWS OF HONG KONG
SECURITIES (DISCLOSURE OF INTERESTS)
ORDINANCE
CHAPTER 396
CHAPTER 396
SECURITIES (DISCLOSURE OF INTERESTS)
ORDINANCE
ARRANGEMENT OF SECTIONS
Section Page
PART I
INTRODUCTORY
1. Short title and commencement
2. Interpretation
PART II
DISCLOSURE OF INTERESTS IN SHARES
3. Duty of disclosure: the cases in which it may arise and 'the relevant time ......
6
4. Interests to be disclosed ... 6
5. 'Percentage level' in relation to notifiable interests 7
6. The notifiable percentage .............7
7. Time of notification and particulars to be contained 7
8. Notification of family and corporate interests 9
9. Agreement to acquire interests in a particular company 10
10...................Duty of disclosure arising under section 9 11
11...........................Duty of persons acting together to keep each other informed ..................... 12
12......................Interests in shares by attribution 13
13......................Interests in shares which are to be notified 14
14..........................Interests to be disregarded 15
15..............Other provisions about notification under this Part 16
16,............................Register of interests in shares .............. 17
17. Duty to notify Unified Exchange, Commissioner and Commissionce of
Banking of information notified under this Part 18
18.............................Company investigations 18
19..............Registration of interests disclosed under section 18 19
(exchange, Commissionce and Commissionce of
20. Duty to notify Unified Exchange, Commissioner and Commissioner of
Banking of interests disclosed under section 18 20
21.......................................Company investigation on requisition by members 20
22.......................................Company report to members 21
23. Duty to deliver report prepared under section 22 to Unified Exchange,
Commissioner and Commissioner of Banking 22
24................................Penalty for failure to provide information 22
25..........................Removal of entries from register 23
26.......................................Otherwise, entries not to be removed 24
27.......................................Inspection of register and reports 24
Section Page
PART III
DISCLOSURE OF INTERESTS OF DIRECTORS, CHIEF EXECUTIVES
AND
THEIR FAMILIES
28. Duty of director and chief executive to disclose interests in own listed company
or associated corporation ...............25
29. Register of directors' interests notified under section 28 26
30. Sanctions for non-compliance ......... 27
31. Extension of section 28 to spouses and children 28
32. Duty to notify Unifiled Exchange, Commissioner and Commissioner of
Banking of matters notified under preceding sections 29
PART IV
POWER TO INVESTIGATE LISTED COMPANY OWNERSHIP
33. Power to investigate ownership of a listed company 29
34. Investigation of share dealings ......30
35. Inspector's powers during investigation 30
36. Production of documents and evidence to inspectors 31
37. Delegation of powers by inspectors .... 31
38. Obstruction .........................32
39. Inspector's reports ..................32
40. Expenses of investigation of the affairs of a company 33
41. Power to impose restrictions on shares and debentures 34
42. Power to obtain information as to those interested in shares, etc . 34
43. Privileged information ...............34
PART V
ORDERS IMPOSING RESTRICTIONS ON SHARES
44.......................................Consequence of order imposing restrictions 35
45.......................................Punishment for attempted evasion of restrictions 35
46. Relaxation and removal of restrictions
................ 36
47.......................................Further provisions on sale by court order of restricted shares 37
PART VI
MISCELLANEOUS
48.......................................Offences by corporations 37
49.......................................Prosecution of offences 38
50.......................................Limitation on commencement of proceedings 38
51. .....................................Method of of giving notification to it listed company is.....38
52.......................................Form of registers and indices 38
53........Regulations ............................................................................................................
...........39
54........Forms ..................................................................................................................
...........39
Schedule. Provisions Supplementing and Interpreting Sections 28 to 31 39
CHAPTER 396
SECURITIES (DISCLOSURE OF INTERESTS)
To require certain persons holding shares in or debentures of listed companies to
disclose their interest in those shares or debentures.
Originally 63 of 1988)
PART I
INTRODUCTORY
Short tide and commencement
1. (1) This Ordinance may be cited as the Securities (Disclosure of Interests)
Ordinance.
(2) This Ordinance shall come into operation on a day to be appointed by the
Governor by notice in the Gazette.
Interpretation
2. (1) In this Ordinance, unless the context otherwise requires-
,,articles' means, in relation to a company, its articles within the meaning of section
2(1) of the Companies Ordinance (Cap. 32);
associated corporation', in relation to a listed company, means a corporation
(a)which is a subsidiary or holding company of the listed company or a
subsidiary of the listed company's holding company; or
(b)in respect of which the information required by section 129(1) or (2) of the
Companies Ordinance has been stated in, or in a note on, or statement
annexed to, the accounts submitted to the last annual general meeting of
the listed company or the listed company's holding company prior to the
event giving rise to any relevant duty under this Ordinance;
,,associated index', in relation to a register, means the index kept in relation to that
register in pursuance of section 16(6);
,,authorized financial institution' means a bank or deposit-taking company licensed
or registered under the Banking Ordinance (Cap. 155);
'chief executive' means the person employed by a corporation who either alone
or together with one or more persons is or-will be responsible under the
immediate authority of the board of directors for the conduct of the business
of the corporation;
'child' includes a stop child
'Commission' means the Securities Commission established under Part II
of the Securities Ordinance (Cap 333);
'Commissioner' means the Commissioner for Securities appointed under section 6
of the Securities Ordinance;
'Commissioner of Banking' means the, Commissioner of Banking appointed
under section 6 of the Banking Ordinance
'corporation' means any company or other body corporate formed or incorporated
either in Hong Kong or elsewhere;
'debenture' includes debenture stock, bonds and other securities of a company,
whether constituting a charge on the assets of the company or not;
'director' includes any person occupying the position of director, by whatever
name called;
'document' includes register;
'holding company' means any company which is a holding company within the
meaning of section 2(7) of the Companies Ordinance (Cap. 32);
'inspector' means an inspector appointed under section 33 or 34;
listed means listed on the Unified Exchange;
listed company' means-
(a) a company as defined in section 2(1) of the Companies Ordinance; or
(b) any other body incorporated in Hong Kong under an Ordinance,
in the case of which securities are listed;
'memorandum' means the memorandum of association of a company, as originally
framed or as altered in pursuance of any enactment;
'notifiable percentage' means the notifiable percentage specified in section 6 or
such other percentage as is prescribed by regulations;
'number', in relation to shares, includes amount, where the context admits of the
reference to shares being construed to include stock;
'officer', in relation to a corporation, includes a director, manager or secretary;
'register of interests in shares' means the register kept in pursuance of section 16
including, except where the context otherwise requires, that part of the register
kept in pursuance of section 19;
'regulations' means regulations made under section 53;
'relevant share capital' means the listed company's issued share capital of a class
carrying rights to vote in all circumstances at general meetings of the
company;
'securities' means securities as defined in section 2 of the Securities Ordinance
(Cap. 333);
',shadow director' means a person in accordance with whose directions or
instructions the directors of a corporation are accustomed to act:
Provided that a person shall not be deemed to be a shadow director by
reason only that the directors act on advice given by him in a professional
capacity;
',shares' means shares in the share capital of a corporation, and includes stock
except where a distinction between stock and shares is express or implied;.
'subsidiary' means any company which is a subsidiary within the meaning of
section 2(4), (5) and (6) of the Companies Ordinance (Cap. 32);
'Unified Exchange' means the stock market established under section 27 of the
Stock Exchanges Unification Ordinance (Cap. 361).
(2) In this Ordinance securities are deemed to be listed on the Unified
Exchange when the Unified Exchange has on the application of the company
which issued the securities, or on the application of any holder of the securities,
agreed to allow. subject to the requirements of the Securities Ordinance,
dealings in those securities to take place on the Unified Exchange, and
notwithstanding that dealings in such securities have been suspended, they shall
continue to be deemed to be so listed throughout such suspension.
(3) For the purposes of paragraph (6) of the definition of 'associated
corporation' in subsection (1) the information referred to in that paragraph shall be
deemed to have been stated in, or in a note on, or statement annexed to, the
accounts on the day on which the company commences to send out copies of the
accounts to its members under section 129G of the Companies Ordinance; and to
have ceased to have been so stated, on the day on which the company commences
so to send out copies of the accounts, being accounts from which such information
is omitted, in any subsequent financial year of the company.
(4) Where a listed company's share capital is divided into difrerent classes of
shares, references in this Ordinance to a percentage of the nominal value of its
relevant share capital are to a percentage of the nominal value of the issued shares
comprised in each of the classes taken separately. [cf. U.K. 1985 c. 6, s.198(2)]
(5) The temporary suspension of voting rights in respect of shares comprised
in issued share capital of a listed company of any class does not affect the
application of this Ordinance in relation to interests in those or any other shares
comprised in that class.
(6) In section 9, and also in references elsewhere in this Ordinance to an
agreement to which section 9 applies, 'agreement' includes any agreement or
arrangement; and references in section 9 to provisions of an agreement
(a)accordingly include undertakings, expectations or understandings
operative under any arrangement; and
(b) (without prejudice to the above) also include any provisions, whether
express or implied and whether absolute or not. [cf. U.K. 1985 c. 6,
s.204(5)]
(7) For the purposes of any provision of this Ordinance which provides that an
officer of a corporation who is in default is liable to a fine or penalty, the expression
'officer who is in default' means any officer or shadow director of the corporation
who knowingly and wilfully authorizes or permits the default, refusal or
contravention mentioned in that provision. [cf. U.K. 1985 c. 6, s. 730(5)]
PART II
DISCLOSURE OF INTERESTS IN
SHARES
Duty of disclosure: the cases in which it may arise
and 'the relevant time'
3. (1) Where a person either-
(a)to his knowledge acquires an interest in shares comprised in a listed
company's relevant share capital, or ceases to be interested in shares so
comprised (whether or not retaining an interest in other shares so
comprised); or
(b)becomes aware that he has acquired an interest in shares so comprised or
that he has ceased to be interested in shares so comprised in which he
was previously interested,
then in the circumstances specified in section 4(4) and (5) he comes, under a duty
('the duty of disclosure') to make notification to the listed company of the
interests which he has, or had, in its shares.
(2) Where, otherwise than in circumstances within subsection (1), a person
(a)is aware at the time when it occurs of any change of circumstances
affecting facts relevant to the application of section 4 to an existing
interest of his in shares comprised in a listed company's share capital of
any description; or
(botherwise becomes aware of any facts relevant to the application of
section 4 (whether or not arising from any such change of circumstances),
then in the circumstances specified in section 4(4) he comes under the duty of
disclosure.
(3) The existence of the duty of disclosure in a particular case depends (in
part) on circumstances obtaining before and after whatever is in that case the
relevant time.
(4) For purposes of subsection (3) and sections 4 and 5 the relevant time is
(a)in a case within subsection (1)(a) or (2)(a), the time of the event or change
of circumstances there mentioned; and
(b)in a case within subsection (1)(b) or (2)(b), the time at which the person
became aware of the facts in question.
[cf. U.K. 1985 c. 6, s. 198]
Interests to he disclosed
4. (1) For the purposes of the duty of disclosure, the interests to be taken into
account are those in relevant share capital of the listed company concerned.
(2) A person has a notifiable interest at any time when he is interested in
shares comprised in that share capital of an aggregate nominal value equal to or
more than the percentage of the nominal value of that share capital which is for the
time being the notifiable percentage.
(3) All facts relevant to determining whether a person has a notifiable interest
at any time (or the percentage level of his interest) are taken to be what he knows
the facts to be at that time.
(4) The duty of disclosure arises under section 3(1) or(2) where the person has
a notifiable interest immediately after the relevant time, but did not have such an
interest immediately before that time.
(5) The duty also arises under section 3(1) where-
(a) the person had a notifiable interest immediately before the relevant
time, but does not have such an interest immediately after it; or
(b)he had a notifiable interest immediately before that time, and has such an
interest immediately after it, but the percentage levels of his interest
immediately before and immediately after that time are not the same.
[cf. U.K. 1985 c. 6, s. 199]
'Percentage level' in relation to notifiable interests
5. (1) Subject to subsection -(2), 'percentage level', in section 4(5)(b), means
the percentage figure found by expressing the aggregate nominal value of all the
shares comprised in the share capital concerned in which the person is interested
immediately before or (as the case may be) immediately after the relevant time as a
percentage of the nominal value of that share capital and rounding that figure
down, if it is not a whole number, to the next whole number.
(2) Where the nominal value of the share capital is greater immediately after the
relevant time than it was immediately before, the percentage level of the person's
interest immediately before,(as well as immediately after) that time is determined by
reference to the larger amount.
[cf. U.K. 1985 c. 6, s. 200]
The notifiable percentage
6. (1) The references in sections 4(2) and 7(2) to the notifiable percentage is to
10 per cent or such other percentage as may be prescribed by regulations; and
different percentages may be prescribed in relation to companies of different
classes or descriptions.
(2) Where in consequence of a reduction in the percentage made by
regulations a person's interest in a listed company's shares becomes notifiable, he
then comes under the duty of disclosure in respect of it; and the duty must be
performed within the period of 10 days next following the day on which it arises.
[cf. U.K. 1985 c. 6, s. 201]
Time of notification and particulars to he contained
7. (1) Where notificiation is required by section 3 with respect to a person's
interest (if any) i shares comprised in relevant share capital of a listed
company, the duty to make the notification must (except where section 6(2)
applies) be performed within the period of 5 days next following the day on
which that duty arises; and the notification must be in writing to the company.
[cf. U.K. 1985 c.6, s. 202]
(2) Upon the commencement of this Ordinance, every person who at that time
is interested in shares comprised in relevant share capital of a listed company of an
aggregate nominal value equal to or more than the notifiable percentage of the
nominal value of that share capital shall be under a duty to notify the listed
companyef the subsistence of his interests at that time and the number of shares
comprised in that share capital (specifying it) in which each interest subsists at that
time. [cf. U.K. 1967 c. 81, s.33]
(3) In the case of a duty imposed by subsection (2)--
(a)if, at the time when the duty arises, the person upon whom the duty is
imposed
(i) does not know of the subsistence of his interests; or
(ii) knows only of the subsistence of interests in shares comprised in
relevant share capital of an aggregate nominal value less than the
notifiable percentage of the nominal value of that share capital,
the duty must be performed-
(A) upon there coming to his knowledge the matter of the subsistence
of interests in shares so comprised of an aggregate nominal value not less
than the notifiable percentage of the nominal value of that share capital,
so far as regards those interests, within the period of 5 days next
following the day on which that matter comes to his knowledge; and
(B) so far as regards an interest whose subsistence comes to his
knowledge after that matter comes to his knowledge, within the period of
5 days next following the day on which the subsistence of the interest
comes to his knowledge;
(b)if, at the time when the duty arises, the person upon whom the duty is
imposed knows of the subsistence of interests in shares comprised in
relevant share capital of an aggregate nominal value of not less than the
notifiable percentage of the nominal value of that share capital, the duty
must be performed
(i) so far as regards those interests, within the period of 5 days next
following the day on which the duty arises; and
(ii) so far as regards an interest whose subsistence comes to his
knowledge after the duty arises, within the period of 5 days next following
the day on which the subsistence of the interest comes to his knowledge.
(4) In the event of-
(a) a company becoming a listed company; or
(b)a listed company's share capital of any class becoming relevant share
capital,
subsection (2) shall apply as in the case therein mentioned but with the
substitution, for references to the time when this Ordinance comes into operation, of
references to the time at which the event occurs.
(5) The notification required by section 3 m ust specify the share capital to
which it relates, and must also
.(a)state the number of shares comprised in that share capital in which the
person making the notification knows he was interested immediately after
the time when the duty arose; or
(b)in a case where the person no longer has a notifiable interest in shares
comprised in that share capital, state that he no longer has that interest.
[cf. U.K. 1985 c. 6, s. 202]
(6) A notification required by section 3 with respect to a person's interest in a
listed company's relevant share capital (other than one stating that he no longer
has a notifiable interest in shares comprised in that share capital) shall include
particulars of
(a)the identity of each registered holder of shares to which the notification
relates; and
(b) the number of those shares held by each such registered holder,
so far as known to the person making the notification at the date when the
notification is made.
(7) A person who has an interest in shares comprised in a listed company's
relevant share capital, that interest being notifiable under section 3, is under a duty
to notify the listed company in writing--
(a)of any particulars in relation to those shares which are specified in
subsection (6); and
(b) of any change in those particulars,
of which in either case he becomes aware at any time after any interest notification
date and before the first occasion following that date on which he comes under any
further duty of disclosure with respect to his interest in shares comprised in that
share capital.
(8) A duty arising under this section must be performed within the period of 5
days next following the day on which it S.
(9) The reference in subsection (7) to an interest notification date, in relation to
a person's interest in shares comprised in a company's relevant share capital, is
(a)the date of any notification made by him with respect to his interest under
this Part; or
(b)where he has failed to make a notification, the date on which the period
allowed for making it came to an end.
(10) A person who at any time has an interest in shares which is notifiable is to
be regarded for the purposes of subsection (7) as continuing to have a notifiable
interest in them unless and until he comes under a duty to make a notification
stating that he no longer has such an interest in those shares.,
Notification of family and corporate interests
8. (1) For purposes of sections 3 to 7, a person is taken to be interested in any
shares in which his spouse or any child, tinder the age of 21 years of his is
interested.
(2) For purposes of sections 3 to 7, a person is taken to be interested in shares
if a corporation is interested in them and--
(a)that corporation or its directors are accustomed to act in accordance with
his directions or instructions; or
(b)he is entitled to exercise or control the exercise of one-third or more of the
voting power at general meetings of that corporation.
(3) Where a person is entitled to exercise or control the exercise of one-third or
more of the voting power at general meetings of a corporation and that corporation
is entitled to exercise or control the exercise of any of the voting power at general
meetings of another corporation ('the effective voting power') then, for purposes
of subsection (2)(b), the effective voting power is taken as exercisable by that
person.
(4) For purposes of subsections (2) and (3), a person is entitled to exercise or
control the exercise of voting power if
(a)he has a right (whether subject to conditions or not) the exercise of which
would make him so entitled; or
(b)he is under an obligation (whether subject to conditions or not) the
fulfilment of which would make him so entitled.
[cf. U.K. 1985 c. 6, s. 203]
Agreement to acquire interests in a particular company
9. (1) This section applies to an agreement between 2 or more persons which
includes provision for the acquisition by any one or more of them of interests in
shares of a particular listed company ('the target company'), being shares
comprised in the relevant share capital of that company if
(a)the agreement also includes provisions imposing obligations or
restrictions on any one or more of the parties to it with respect to their use,
retention or disposal of their interests in that listed company's shares
acquired in pursuance of the agreement (whether or not together with any
other interests of theirs in the company's shares to which the agreement
relates); and
(b) any interest in the listed company's shares is in fact acquired by any of
the parties in pursuance ofthe agreement. 1
(2) In relation to an agreement to which this section applies, references in this
section, and in sections 10 and 11, to the target company are to the listed company
which is the target company for that agreement.
(3) The reference in subsection (1)(a) to the use of interests in shares in the
target company is to the exercise of any rights or of any control or influence arising
from those interests (including the right to enter into any agreement for the exercise,
or for control of the exercise, of any of those rights by another person).
(4) Once any interest in shares in the target company has been acquired in
pursuance of an agreement to which this section applies, this section continues to
apply to that agreement irrespective of
(a)whether or not any further acquisitions of interests in the company's
shares take place in pursuance of the agreement;
(b) any change in the persons who are for the time being parties to it; and
(c) any variation of the agreement,
so long as the agreement continues to include provisions of any description
mentioned in subsection (1)(a).
(5) References in subsection (4) to the agreement include any agreement
having effect (whether directly or indirectly) in substitution for the original
agreement.
(6) This section does not apply to an agreement which is not legally binding
unless it involves mutuality in the undertakings, expectations or understandings of
the parties to it; nor does the section apply to an agreement to underwrite or sub-
underwrite any offer of shares in a company, provided the agreement is confined to
that purpose and any matters incidental to it.
[cf. U.K. 1985 c. 6, s. 204]
Duty of disclosure arising under section 9
10. (1) In the case of an agreement to which section 9 applies, each party to the
agreement is taken (for purposes of the duty of disclosure) to be interested in all
shares in the target company in which any other party to it is interested apart from
the agreement (whether or not the interest of the other party in question was
acquired, or includes any interest which was acquired, in pursuance of the
agreement).
(2) For the purposes referred to in subsection (1), and also for those of section
11. an interest of a party to such an agreement in shares in the target company is an
interest apart from the agreement if he is interested in those shares otherwise than
by virtue of the application of section 9 and this section in relation to the
agreement.
(3) Accordingly, any such interest of the party to the agreement (apart
from the agreement) includes for the purposes referred to in subsection (1) any
interest which he is taken to have under section 8 or by the application of section
9 and this sec tion in relation to any other agreement with respect to shares in the
target company to which he is a party.
(4) A notification with respect to his interest in shares in the target company
made to that company under this Part by a person who is for the time
being a party to an agreement to which section 9 applies shall
(a)state that the person making the notification is a party to such an
agreement;
(b)include the names and (so far as known to him) the addresses of the other
parties to the agreement, identifying them as such; and
(c)state whether or not any of the shares to Which the notification relates
are shares in which he is interested by virtue of section 9 and this section
and, if so, the number of those shares.
(5) Where a person makes a notification to a listed company under this under this
Part in consequence of ceasing to be interested in any shares of that company by
virtue of the fact that he or any other person has teased to be a party to an
agreement to which section 9 applies, the notification shall include a statement that
he or that other person has ceased to be a party to the agreement (as the case may
require) and also (in the latter case) the name and (if known to him) the address of
that other.
[cf. U.K. 1985 c. 6, s. 2051
Duty of persons acting together to keep each other informed
11. (1) A person who is a party to an agreement to which section 9
applies is subject to the requirements of this section at any time when-
(a) the target company is a listed company, and he knows it to be so;
(b)the shares in that company to which the agreement relates consist of or
include shares comprised in relevant share capital of the company, and
he knows that to be the case; and
(c)he knows the facts which make the agreement one to which section 9
applies.
(2) A person who is subject to the requirements of this section is under a
duty to notify every other party to the agreement, in writing, of the relevant
particulars of his interest (if any) apart from the agreement, in shares comprised
in relevant share capital of the target company-
(a) on his first becoming subject to the requirements of this section; and
(b)on each occurrence after that time while he is still subject to those
requirements of any event or circumstances within section 3(1) (as it
applies to his case otherwise than by reference to interests which he is
taken to have under section 10 as applying to that agreement).
(3) The relevant particulars to be notified under subsection (2) are-
(a)the number of shares (if any) comprised in the target company's
relevant share capital in which the person giving the notification
would be required to state his interest if he were under the duty of
disclosure with respect to that interest (apart from the agreement)
immediately after the time when the duty to give notification under
subsection (2) arose; and
(b)the relevant particulars with respect to the registered ownership of
those shares, so far as known to him at the date of the notification.
(4) A person who is subject to the requirements of this section is also
under a duty to notify every other party to the agreement, in writing-
(a)of any relevant particulars with respect to the registered ownership of
any shares comprised in relevant share capital of the target company
in which he is interested apart from the agreement; and
(b) of any change in those particulars,
of which in either case he becomes aware at any time after any interest notifica-
tion date and before the first occasion following that date on which he becomes
subject to any further duty to give a notification under subsection (2) with
respect to his interest in shares comprised in that share capital.
(5) The reference in subsection (4) to an interest notification date, in
relation to a person's interest in shares comprised in the target company's
relevant share capital, is to-
(a)the date of any notification given by him with respect to his interest
under subsection (2); or
(b)where he has failed to give that notification, the date on which the.
period allowed by this section for giving the notification came to an
end.
(6) A person who is a party to an agreement to which section 9 applies is under
a duty to notify every, other party to the agreement, in writing, of his current
address
(a) on his first becoming subject to the requirements of this section; and
(b)on any change in his address occurring after that time and while he is still
subject to those requirements.
(7) A reference to the relevant particulars with respect to the registered
ownership of shares is to such particulars in relation to those shares as are
mentioned in section 7(6)(a) and (b).
(8) A person's duty to give any notification required by this section to any
other person must be performed within the period of 5 days next following the day
on which that duty arose.
[cf. U.K. 1985 c. 6, s. 206]
Interests in shares by. attribution
12. (1) Where section 3 or 4 refers to a person acquiring an interest in shares or
ceasing to be interested in shares, that reference includes his becoming or ceasing
to be interested in those shares by virtue of another person's interest.
(2) Subsection (1) applies where he becomes or ceases to be interested by
virtue of section 8 or (as the case may be) section 10 whether
(a)by virtue of the fact that the person who is interested in the shares
becomes or ceases to be a person by reference to whose interests (if any)
he is by virtue of section 8 or 10 taken to have an interest;
(b)in consequence of the fact that such a person has become or ceased to be
interested in the shares;
(c)in consequence of the fact that he himself becomes or ceases to be a
party to an agreement to which section 9 applies to which the person
interested in the shares is for the time being a party; or
(d)in consequence of the fact that an agreement to which both he and that
person are parties becomes or ceases to be one to which section 9
applies.
(3) Upon a person becoming or ceasing to be interested in shares in the
circumstances described in subsection (2) the person is deemed to know that he
has acquired an interest in the shares or (as the case may be) that he has ceased to
be interested in them, when he knows both
(a)the relevant facts with respect to the other person's interest in the shares;
and
(b)the relevant facts by virtue of Which he himself has become or ceased to
be interested in them in accordance with section 8 or 10.
(4) A person has the knowledge referred to in subsection (3)(a) if he knows
(whether contemporaneously or not) either of the subsistence of the other person's
interest at any material time or of the fact that the other has become or ceased to be
interested in the shares at any such time.
(5) A person is deemed to know of the subsistence of another's interest in
shares or (as the case may be) that another has become or ceased to be interested
in shares if he has been notified under section 11 of facts with respect to the other's
interest which indicate that he is or has become or ceased to be interested in the
shares (whether on his own account or by virtue of a third party's interest in them).
(6) In subsection (4)-
'material time' is any time at which the interests of the person concerned which are
taken to be his by virtue of section 8 or 10, fall or fell to be so taken.
[cf. U.K. 1985 c. 6, s. 207]
Interests in shares which are to be notified
13. (1) This section applies, subject to section 14, in determining for purposes
of sections 3 to 7 whether a person has a notifiable interest in shares.
(2) A reference to an interest in shares is to be read as including an interest of
any kind whatsoever in the shares; and accordingly there are to be disregarded any
restraints or restrictions to which the exercise of any right attached to the interest is
or may be subject.
(3) Where property is held on trust and an interest in shares is comprised in
the property, a beneficiary of the trust who apart from this subsection does not
have an interest in the shares is to be taken as having such an interest.
(4) A person is taken to have an interest in shares if-
(a)he enters into a contract for their purchase by him (whether for cash or
other consideration); or
(b)not being the registered holder, he is entitled to exercise any right
conferred by the holding of the shares or is entitled to control the exercise
of any such right.
(5) A person is taken to have an interest in shares if, otherwise than by virtue
of having an interest under a trust
(a)he has a right to call for delivery of the shares to himself or to his order;
or
(b)he has a right to acquire an interest in shares or is under an obligation to
take an interest in shares,
whether in any case the right or obligation is conditional or absolute.
(6) For purposes of subsection (4)(b), a person is entitled to exercise or
control the exercise of any right conferred by the holding of shares if he
(a)has a right (whether subject to conditions or not) the exercise of which
would make him so entitled; or
(b)is under an obligation (whether so subject or not) the fulfilment of which
would make him so entitled.
(7) Persons having a joint interest are taken each of them to have that interest.
(8) It is immaterial that shares in which a person has an interest. are
unidentifiable.
[cf. U.K. 1985 c. 6, s. 208]
Interests to he disregarded
14. (1) The following interest in shares hares are disregarded for purposes of
sections 3 to 7-
(a)where property is held on trust and an interest in shares is comprised in
that property, an interest in reversion or remainder or of a.bare trustee or a
custodian trustee, and any discretionary interest;
(b) an interest which subsists by virtue of-
(i) any unit trust or mutual fund corporation authorized under section
15 of the Securities Ordinance (Cap. 333);
(ii) a charitable scheme made by order of any court of competent
jurisdiction; or
(iii) the vesting of a deceased's estate in any judicial officer between
the time of death and the grant of letters of administration;
(c)an interest for the life of himself or another of a person under a settlement
in the case of which the property comprised in the settlement consists of
or includes shares, and the conditions mentioned in subsection (3) are
satisfied;
(d) an exempt security interest;
(e) an interest in shares held by the Registrar of the Supreme Court; or
(f)such interests, or interests of such a class, as may be prescribed for
purposes of this paragraph by regulations.
(2) A person is not by virtue of section 13(4)(b) taken to be interested in
shares by reason only that he has been appointed a proxy to vote at a specified,
meeting of a listed company or of any class of its members and at any adjournment
of that meeting, or has been appointed by a corporation to act as its representative
at any meeting of a listed company or of any class of its members.
(3) The conditions referred to in subsection (1)(c) are, in relation to a
settlement-
(a) that it is irrevocable; and
(b)that the settlor has no interest in any income arising under, or property
comprised in, the settlement.
(4) An interest in shares is an exempt security interest for the purposes of
subsection (1)(d) if it is held
(a) by a person who is-'
(i) an authorized financial institution;
(ii) an insurer who is authorized within the meaning of the Insurance
Companies Ordinance (Cap. 41); or
(iii) a stockbroker, exempt dealer or registered dealer within the
meaning of the Securities Ordinance (Cap. 333); and
(b)by way of security only for the purposes of a transaction entered into in
the ordinary course of his business as such a person.
(5) For the purposes of subsection (1) a person shall not be held not to be a
bare trustee in respect of any property by reason only
(a) that the person for whose benefit the property is held is not absolutely
entitled thereto as against the trustee by reason only that he is an
infant or is a person under a disability; or
(b)that the trustee has the right to resort to the property to satisfy any
outstanding charge or lien or for the payment of any duty, tax, cost or
other outgoing.
[cf. U.K. 1985 c. 6, s. 209]
Other provisions about notification under this Part
15. (1) Where a person authorizes another ('the agent') to acquire or
dispose of, on his behalf, interests in shares comprised in relevant share capital
of a listed company, he shall secure that the agent notifies him immediately of
acquisitions or disposals effected by the agent which will or may give rise to any
duty of disclosure imposed on him by this Part with respect to his interest in that
share capital.
(2) A duty of disclosure imposed on a person by any provision of sections 3
to 7 is deemed not to be performed unless the notification by means of which it
purports to be performed identifies him and gives his address and, in a case where
he is a director or chief executive of the company, is expressed to be given in
performance of that duty.
(3) A person who
(a)fails to perform, within the proper period, a duty of disclosure imposed on
him by this Pa
(b) in purported performance arty such duty makes to a company a
statement which he knows to be false, or recklessly makes to A a
company a statement which is false;
(c)fails to perform, within the proper period, a duty to give another person a
notification required by section 11. or
(d) fails without reasonable excuse to comply with subsection (1),
commits an offence and is liable on summary conviction to a fine of 10,000 and to
imprisonment for 6 months and on conviction upon indictment to a fine of WO
and to imprisonment for 2 years.
It is a defence for a person charged with an offence under subsection (3)(c) to
prove that it was not possible for him to give the notification to the other person
required by section 11 within the proper period, and either
(a)that it has not since become possible for him to give the notification so
required; or
(b) that he gave the notification as soon after the end of that period as it
became possible for him to do so.
(5) Where a person is convicted of an offence under this section (other than
an offence relating to his ceasing to be interested in a company's shares), the
Financial Secretary may by order direct that the shares in relation to which the
offence was committed shall, until further order, be subject to the restrictions of Part
V.
(6) An order under subsection (5) may be made notwithstanding any power in
the company's memorandum or articles enabling the company to impose similar
restrictions on those shares.
[cf. U.K. 1985 c. 6, s. 210]
Register of interests in shares
16. (1) Every listed company shall keep a register for the purposes of sections 3
to 7, and whenever the company receives information from a person in
consequence of the performance of a duty imposed on him by any of those
sections, it is under a duty to inscribe in the register, against that person's name,
that information and the date of the inscription.
(2) Without prejudice to subsection (1), where a listed- company receives a
notification under this Part which includes a statement that the person making the
notification, or any other person, has ceased to be a party to an agreement to which
section 9 applies, the listed company is under a duty to record that information
against the name of that person in every place where his name appears in the
register as a party to that agreement (including any entry relating to him made
against another person's name).
(3) A duty impose imposed by subsection (1) or (2) must be performed within
the period of 3 days next following the day on which it arises.
(4) The listed company is not, by virtue of anything done for the purposes of
this section, affected with notice of, or put upon enquiry as to, the rights of any
person in relation to any shares.
(5) The register must be so made up that t he entries against the several names
entered in it appear in chronological order.
(6) Unless-the register is in such form as to constitute in itself an index, the
listed company shall keep an index of the names entered in the register which shall
in respect of each name contain a sufficient indication to enable the information
entered against it to be readily found; and the listed company shall, within 10 days
after the date on which a name is entered in the register, make any necessary
alteration in the index.
(7) Subject to section 283 of the Companies Ordinance (Cap. 32) if the company
ceases to be a listed company it shall continue to keep the register and any
associated index until the end of the period of 6 years beginning with the day next
following that on which it ceases to be such a listed company.
(8) The register and any associated index-
(a)shall be kept at the place at which the register required to be kept by the
company by section 29 is kept; and
(b)subject to the next subsection, shall be available for inspection in
accordance with section 27.
(9) Neither the register nor any associated index shall be available for
inspection in accordance with that section in so far as it contains information with
respect to a company for the time being entitled to avail itself of the benefit
conferred by section 128(3) or 129(3) of the Companies Ordinance.
(10) If default is made in complying with subsection (1) or (2), or with any of
subsections (5) to (7), the listed company and every officer of it who is in default
commits an offence and is liable to a fine of $2,000 and, in the case of a continuing
offence, to a further fine of $200 for each day during which the offence continues.
(11) In this section 'register', unless the context otherwise requires, means the
register a listed company is, by subsection (1), required to keep.
(12) For the purpose of this section 'books and papers' in section 283 of the
Companies Ordinance (Cap. 32) shall be contrued as including the register and
associated index required to be kept by a listed company under this section.
[cf. U.K. 1985 c. 6, s. 211]
Duty to notify Unified Exchange. Commissions and
Commissioner of Banking of information notified
under this Part
17. (1) never a listed company receives information from a person in
consequence of the performance of a duty imposed on him by any provisions of
sections 3 to 7, nd that information relates to listed shares, the company is under a
duty to notify the Unified Exchange and the Commissiorw of that information.
(2) Upon receipt of any information under subsection(1)
the Unified Exchange shall forthwith publish such informationYM such manner and for such
period as may be approved by the Commissioner.
(3) Whenever a listed company that is or is the holding company of an
authorized financial institution receives information from a person in consequence
of the performance of a duty imposed on him by any provisions of sections 3 to 7,
and that information relates to listed shares, the company is under a duty (in
addition to the duty imposed by subsection to notify the Commissioner of Banking
of that information.
(4) A duty imposed on a listed company by subsection (1) or (3) must be
performed before the end of the day next following that on which it arises.
(5) If a listed company makes default in complying with this section the
company and every officer of it who is in default commits an offence and is liable to
a fine of $2,000.
Company investigations
18. (1) A listed company may by notification in writing require a person whom
the company knows or has reasonable cause to believe to be or, at any time during
the 3 years immediately preceding the date on which the notification is issued. to
have been interested in shares comprised in the company's relevant share capital
(a)to confirm that fact or (as the case may be) to indicate whether or not it is
the case; and
(b)where he holds or has during that time held an interest in shares so
comprised, to give such further information as may be required in
accordance with subsection (2).
(2) A notification under subsection (1) may require the person to whom it is
addressed
(a)to give particulars of his own past or present interest in shares comprised
in relevant share capital of the company (held by him at
any time during the 3-year period mentioned in subsection (1));
(b)where the interest is a present interest and any other person's interest in
the shares subsists or, in any case, where any other person's interest in
the shares subsisted during that 3-year period at any time when his own
interest subsisted,. to give (so far as lies within his knowledge) such
particulars with respect to that other person's interest as may be required
by the notification;
(c)where his interest is a past interest, to give (so far as lies within his'
knowledge) particulars of the identity of the person who held that
interest immediately upon his ceasing to hold it.
(3) The particulars referred to in subsection (2)(a) and (b) include particulars of
the identity of persons interested in the shares in question and of whether persons
interested in the same shares are or were parties to any agreement to which section
9 applies or to any agreement or arrangement relating to the exercise of any rights
conferred by the holding of the shares.
(4) A notification under subsection (1) shall require any information given in
response to the notification to be given in writing within such reasonable time as
may be specified in the notification.
(5) Sections 8 to 10 and 13 (with the omission ofthe reference in section 13 to
section 14) apply for the purpose of construing references in this section to
persons interested in shares and to interests in shares* respectively,- as they apply
in relation to sections 3 to 6.
(6) This section applies in relation to a person who has or previously had, or is
or. was entitled to acquire, a right to subscribe for shares in a listed company which
would on issue be comprised in relevant share capital of that company as it applies.
in relation to a person who is or was interested in shares so comprised; and
references in this section to an interest in shares so comprised .and to shares so
comprised are to be read accordingly in any such case as including respectively any
such right and shares which would on issue be so comprised.
[cf. U.K. 1985 c. 6, s. 212]
Registration of interests disclosed under section 18
19. (1) Whenever in pursuance of a requirement imposed by a listed company
on a person under section 18 the listed company receives information to which this
section applies relating to shares comprised in its relevant share capital, it is under a
duty to enter against the name of the registered holder of those shares, in a separate
part of its register of interests in shares
(a) the fact that the requirement was imposed and the date on which it was
imposed; and
(b)any information to which this section applies received in pursuance of the
requirement.
-(2) This section applies to any information received in pursuance of a
requirement imposed by section 18 which relates to the present interests held by
any persons in shares comprised in relevant share capital of the company in
question.
(3) Subsections (3) to (10) of section 16 apply in relation to any part of the
register maintained in accordance with subsection (1) of this section as they apply
in relation to the remainder of the register, reading references to subsection (1) of
section 16 to include subsection (1) of this section.
[cf. U.K. 1985 c. 6, s. 213]
Duty to notify United Exchange Commissioner and
Commissioner of Banking of interests disclosed
under section 18
20. (1) Whenever in pursuance of a requirement imposed by a listed company
on a person under section 18 the listed company receives information to which this
section applies, and that information relates to listed shares, the company is under a
duty to notify the unified Exchange and the Commissioner of that information.
(2) Upon receipt of any information under subsection (1) the Unified
Exchange shall
forthwith publish such information in such manner and for such
period as may be approved by the Commissioner.
(3) Whenever in pursuance of a requirement imposed by a listed company that
is ot is the holding company of an authorized financial institution on a person under
section 18 the listed company receives information to which this section applies,
and that information relates to listed shares, the company is under a duty (in
addition to the duty imposed by subsection (1)) to notify the Commissioner of
Banking of that information.
(4) This section applies to any information received in pursuance of a
requirement imposed by section 18 which relates to the present interests held by
any persons in shares comprised in relevant share capital of the company in
question.
(5) A duty imposed on a listed company by subsection (1) or (3) must be
performed before the end of the day next following that on which it arises.
(6) If a listed company makes default in complying with this section the
company and every officer of it who is in default commits an offence and is liable to
a fine of $2,000.
Company investigation on requisition by members
21. (1) A listed company may be required to exercise its powers under section
18 on the requisition of members of the company holding at the date of the deposit
of the requisition not less than one-tenth of such of the paid-up capital of the
company as carries at that date the right of voting at general meetings of the
company.
(2) The requisition must-
(a)state that the requisitionists are requiring the company to exercise its
powers under section 18;
(b)specify the manner in which they require those powers to be exercised;
and
(c)give reasonable grounds for requiring the company to exercise those
powers in the manner specified,
and must be signed by the requisitionists and deposited at the company's
registered office.
(3) The requisition may consist of several documents in like form each signed
by one or more requisitionists.
(4) On the deposit of a requisition complying with this section it is the
company's duty to exercise its powers under section 18 in the manlier specified in
the requisition.
(5) If default is made in complying with subsection (4), the listed company and
every officer of it who is in default commits an offence and is liable on summary
conviction to a fine of $10,000 and on conviction -upon indictment to a fine of
$100,000.
(6) In this section and in sections 22 and 23 a reference to a company's
registered office shall, where the company does not have a registered office in Hong
Kong, be deemed to be a reference to the company's principal place of business in
Hong Kong.
[cf. U.K. 1985 c. 6, s. 214]
Company report to members
22. (1) On the conclusion of an investigation carried out by a listed company in
pursuance of a requisition under section 2 1, it is the company's duty to cause a
report of the information received in pursuance of that investigation to be prepared,
and the report shall be made available at the company's registered office within 15
days after the conclusion of that investigation.
(2) Where-
(a)a company undertakes an investigation in pursuance of a requisition under
section 21; and
(b)the investigation is not concluded before the end of 3 months beginning
with the date immediately following the date of the deposit of the
requisition,
it is the duty of the company to cause to be prepared, in respect of that period and
each successive period of 3 months ending before the conclusion of the
investigation, an interim report of the information received during that period in
pursuance of the investigation.
(3) Each report prepared under subsection (2) shall be made available at the
company's registered office within 15 days after the end of the period to which it
relates.
(4) A report prepared under this section shall not include any information with
respect to a company entitled to avail itself of the -benefit conferred by section
128(3) or 129(3) of the Companies Ordinance (Cap. 32); but where any such
information is omitted, that fact shall be stated in the report.
(5) The company shall, within 3 days of making any report prepared under this
section available at its registered, office, notify the requisitionists that the report is
so available.
(6) An investigation carried out by a listed company in pursuance of a
requisition under section 21 is regarded for the purposes of this section as
concluded when the company has made all such inquiries as are necessary or
expedient. for the purposes of the requisition and in the case of each such
inquiry, either a response has been received by the company or the time allowed
for a response has elapsed.
(7) A report prepared under this section-
(a)shall be kept at the company's registered office from the day on which it is
first available there in accordance with subsection (1) or (3) until the
expiration of 6 years beginning with the day next following that day; and
(b)shall be available for inspection in accordance with section 27 so long as it
is so kept.
(8) If default is made in complying with subsection (1), (2), (3), (5) or (7)(a), the
company and every officer of it who is in default commits an offence and is liable
on summary conviction to a fine of $10,000 and on conviction upon indictment to a.
fine of $100,000.
[cf. U.K. 1985 c. 6, s. 215]
Duty to deliver liver report prepared under section 22 to Unifled
Exchange, Commissioner and Commissioner of Banking
23. (1) Whenever a report is prepared under section 22, and that report relates
to listed shares, the listed company is under a duty to deliver a copy of the report
to the United Exchange and the Commissioner.
(2) Upon receipt of any report under subsection (1) the unified Exchange
shall forthwith publish such report in such manner and for such period as may
be approved by the Commissioner.
(3) Whenever a report is prepared under section 22 by a listed company that is
or is the holding company of an authorized financial institution, and that report
relates to listed shares, the listed company is under a duty (in addition to the duty
imposed by subsection (1)) to deliver a copy of the report to the Commissioner of
Banking.
(4) The duty imposed on a listed company by subsection (1) or (3) must be
performed before the end of the day next following that on which the report is first
made available at the company's registered office.
(5) If a listed company makes default in complying with this section the
company and every officer of it who is in default commits an offence and is liable to
a fine of $2,000.
Penalty for failure to provide information
24. (1) Where a notification is served by a listed company under section 18 on
a person who is or was interested in shares of the company and that person fails to
give the company any information required by the notification within the time
specified in it, the company may apply to the High Court for an order directing that
the shares in question be subject to the restrictions of Part V.
(2) Such an order may be made by the High Court notwithstanding any power
contained in the applicant company's memorandum or articles enabling the
company itself to impose similar restrictions on the shares in question.
(3) Subject. to the following subsections, a person who fails to comply with a
notification under section 18 or who, in purported compliance with such a
notification, makes any statement which he knows to be false in a material particular
or recklessly makes any statement which is false in a material particular commits an
offence and is liable on summary conviction to a fine of $10,000 and to
imprisonment for 6 months and on conviction upon indictment to a fine of 100,000
and to imprisonment for 2 years.
(4) A person is not guilty of an offence by virtue of failing to comply with a
notification under section 18 -if he proves that the requirement to give the
information was frivolous or vexatious.
(5) A person is not obliged to comply with a notification under section 18
if he is for the time being exempted by the Financial Secretary by notice in the
Gazette from the operation of that section.
[cf. U.K. 1985 c. 6, s. 216]
Removal of entries from register
25. (1) A company may remove an entry against a person's name from
its register of interests in shares if more than 6 years have elapsed since the date
of the entry being made, and either-
(a)that entry recorded the fact that the person in question had ceased to
have an interest notifiable under this Part in relevant share capital of
the company; or
(b)it has been superseded by a later entry made under section 16 against
the same person's name,
and in a case within paragraph (a) the company may also remove that person's
name from the register.
(2) If a person in pursuance of a duty imposed on him by any provision of
this Part gives to a company the name and address of another person as being
interested in shares in the company, the company shall, within 15 days of the
date on which it was given that information, notify the other person that he has
been so named and shall include in that notification-
(a)particulars of any entry relating to him made, in consequence of
its being given that information, by the company in its register of
interests in shares; and
(b)a statement informing him of his right to apply to have the entry
removed in accordance with the following provisions of this section.
(3) A person who has been notified by a company in pursuance of
subsection (2) that an entry relating to him has been made in the company's
register of interests in shares may apply in writing to the company for the
removal of that entry from the register; and the company shall remove the entry
if satisfied that the information in pursuance of which the entry was made was
incorrect.
(4) If a person who is identified in a company's register of interests in
shares as being a party to an agreement to which section 9 applies (whether by
an entry against his own name or by an entry relating to him made against
another person's name as mentioned in subsection (2)(a)) ceases to be a party to
that agreement, he may apply in writing to the company for the inclusion of that
information in the register; and if the company is satisfied that he has ceased to
be a party to the agreement, it shall record that information (if not already
recorded) in every place where his name appears as a party to that agreement in
the register.
(5) If an application under subsection (3) or (4) is refused (in a case within
subsection (4), otherwise than on the ground that the information has already
been recorded) the applicant may apply to the High Court for an order directing
the company to remove the entry in question from the register or (as the case
may be) to include the information in question in the register; and the High
Court may, if it thinks fit, make such an order.
(6) Where a name is removed from a company's register of interests in shares in
pursuance of subsection (1) or (3) or an order under subsection (5), the company
shall within 14 days of the date of that removal make any necessary alteration in
any associated index.
(7) If default is made in complying with subsection (2) or (6), the listed
company and every officer of it who is in default commits an offence and is liable to
a fine of $2,000 and, in the case of a continuing offence, to a further fine of $200 for
each day during which the offence continues.
[cf. U.K. 1985 c. 6, s. 217]
Otherwise, entries not to be removed
26. (1) Entries in a company's register of interests in shares shall not be
deleted except in accordance with section 25.
.(2) If an entry is deleted from a company's register of interests in shares in
contravention of subsection (1), the company shall restore that entry to the register
as soon as is reasonably practicable.
(3) If default is made in complying with subsection (1) or (2), the company and
every officer of it who is in default commits an offence and is liable to a fine of
$2,000 and, in the case of a continuing offence, to a further fine of $200 for each day
during which the offence continues.
[cf. U.K. 1985 c. 6, s. 218]
Inspection of register and reports
27. (1) Any register of interests in shares and any report which is required by
section 22(7) to be available for inspection in accordance with this section shall,
during business hours (subject to such reasonable restrictions as the company may
in general meeting impose, but so that not less than 2 hours in each day are allowed
for inspection) be open to the inspection of any member of the company or of any
other person without charge.
(2) Any such member or other person may require a copy of any such register
or report, or any part of it, on payment of $1 or such less sum as the company may
prescribe by regulation, for every 100 words or fractional part of 100 words required
to be copied; and the company shall cause any copy so required by a person to be
sent to him before the expiration of the period of 10 days beginning with the day
next following that on which the requirement is received by the company.
(3) If an- inspection required under this section is refused or a copy so
required is not sent within the proper period, the company and every officer of it
who is in default commits an offence and is liable to a fine of $2,000 and, in the case
of a continuing offence, to a further fine of $206 for each day during which the
offence continues.
(4) In the case of a refusal of an inspection required under this section of any
register or report, the High Court may by order compel an immediate inspection of it;
and in the case of failure to send a copy required under this section, the High Court
may by order direct that the copy required shall be sent to the person requiring it.
(5) The regulations may substitute a sum specified in the regulations for the
sum for the time being mentioned in subsection (2).
[cf. U.K. 1985 c. 6, s. 219]
PART III
DISCLOSURE OF INTERESTS OF DIRECTORS, CHIEF EXECUTIVES AND
THEIR FAMILIES
Duty of director and chief executive to disclose interests
in own listed company or associated corporation
28. (1) A person who
(a)at the commencement of this Ordinance is a director or chief executive of a
listed company and is then interested in shares in, or debentures of, the
listed company or any associated corporation; or
(b)becomes a director or chief executive of a listed company and at the time
when he does so is interested in shares in, or debentures of, the listed
company or any associated corporation,
-is under a duty to notify the company in writing-
(i) of the subsistence of his interests at that time; and
(ii)of the number of shares of each class in, and the amount of debentures of
each class of, the listed company or associated corporation in which each
interest of his subsists at that time.
(2) A director or chief executive of a listed company is under a duty to notify
the company in writing of the occurrence, while he is a director or chief executive, of
any of the following events
(a)any event in consequence of whose occurrence he becomes, or ceases to
be, interested in shares in, or debentures of, the listed company or any
associated corporation;
(b)the entering into by him of a contract to sell any such shares or
debentures;
(c)the assignment by him of a right granted to him by the listed company to
subscribe for shares in, or debentures of, the 'company;
(d)the grant to him by another corporation, being an associated corporation,
of a right to subscribe for shares in, or debentures of, that associated
corporation, the exercise of such a right granted to him and the assignment
by him of such a right so granted; and
(e)any event in consequence of which a corporation becomes an associated
corporation where he is immediately after the event interested in shares in,
or debentures of, the corporation,
and notification to the listed company, must state the number or amount, and class,
of shares or debentures involved.
(3) The Schedule has effect in connection with subsections (1) and (2) above;
and of the Schedule
(a)Part I contains rules for the interpretation of, and otherwise in relation to,
subsections (1) and (2) and applies in determining, for purposes of those
subsections, whether a person has an interest in shares or debentures;
(b)Part II applies with respect to the periods within which duties imposed by
subsections (1) and (2) must be performed; and
(c)Part III specifies certain circumstances in which duties arising from
subsection (2) are deemed not to be performed.
(4) Subsections (1) and (2) are subject to any exceptions for which provision
may be made by regulations.
(5) Subsection (2) does not require the notification by a person of the
occurrence of an event whose occurrence comes to his knowledge after he has
ceased to be a director or chief executive.
(6) A duty imposed by this section is deemed not to be performed unless the
notice by means of which it purports to be performed is expressed to be given in
performance of that duty.
(7) This section applies to shadow directors as to directors; but nothing in it
operates so as to impose a duty with respect to shares in a corporation which is the
wholly-owned subsidiary of another corporation for the purposes of section 124 of
the Companies Ordinance (Cap. 32).
(8) A person who-
(a) fails to perform, within the proper period, a duty to which he is subject
under subsection (1) or (2) or
(b)in purported performance of a duty to which he is os subject, makes to the
listed company
a statement which he knows to be false, or
recklessly makes to it a statement which is false,
Commits an offence 'an is liable on summary conviction to a fine of $10,000 and
to imprisonment for 6 months and on conviction upon indictment to a fine of
$100,000 and to imprisonment for 2 years.
[cf. U.K. 1985 c. 6, s. 324]
Register of directors' interests notified under section 28
29. (1) Every listed company shall keep in Hong Kong a register for the
purposes of section 28.
(2) Whenever a listed company receives information from a director or chief
executive given in performance of a duty imposed on him by section 28, it is under a
duty to enter in the register, against the director's or, as the case may be, the chief
executive's name, the information received and the date of the entry.
(3) The listed company is also under a duty, whenever it grants to a director or
chief executive a right to subscribe for shares in, or debentures of, the listed
company to enter in the register against his name
(a) the date on which the right is granted;
(b) the period during which, or time at which, it is exercisable;
(c)the consideration for the grant (or, if there is no consideration, th at fact);
and
(d)the description of shares or debentures involved and the number or
amount of them, and the price to be paid for them (or the consideration, if
otherwise than in money).
(4) Whenever such a right as is mentioned in subsection (3) is exercised by a
director or chief executive, the. listed company is under a duty to enter in the
register against his name that fact (identifying the right), the number or amount of
shares or debentures in respect of which it is exercised and, if they were registered
in his name, that fact and, if not, the name or names of the person or persons in
whose name or names they were registered, together (if they were registered in the
names of 2 persons or more) with the number or amount of the shares or debentures
registered in the name of each of them.
(5) Part IV of the Schedule has effect with respect to the register to be kept
under this section, to the way in which entries in it are to be made, to the right of
inspection, and generally.
(6) For purposes of this section, a shadow director is deemed a director.
[cf. U.K. 1985 c. 6, s. 325]
Sanctions for non-compliance
30. (1) The following applies with respect to defaults in complying with, and to
contraventions of, section 29 and Part IV of the Schedule.
(2) If default is made in complying with any of the following provisions
(a) section 29(1), (2), (3) or (4); or
(b) the Schedule, paragraph 19, 20 or 26,
the listed company and every officer of it who is in default commits an offence.
(3)If an inspection of the register required under paragraph 23 of the
Schedule is refused, or a copy required under paragraph 24 is not sent within the
proper period, the listed company and every officer of it who is in default commits
an offence.
(4) If default is made for 14 days in complying with paragraph 25 of the
Schedule the listed company and every officer of it who is in default commits an
offence
(5) If default is made in complying with paragraph 27 of the Schedule the listed
company and every officer of it who is in default commits an offence.
(6) In the case of a refusal of an inspection of the register required under
paragraph 23 of the Schedule, the High Court may by order compel an immediate
inspection of it; and in the case of failure to send within the proper period a copy
required under paragraph 24, the High Court may by order direct that the copy be
sent to the person requiring it.
(7) A person who commits an offence under this section is liable to a fine of
$2,000 and, in the case of a continuing offence, to a further fine of $200 for each day
during which the offence continues.
[cf. U.K. 1985 c. 6, s. 326]
Extension of section 28 to spouses and children
31. (1) For the purposes of section 28-
(a)a director or chief executive of a listed company is taken to be interested in
any shares or debentures in which his spouse (not being herself or himself
a director or chief executive of the listed company) is interested; and
(b)the same applies with respect to an interest of a child under the age of 21
years of a director or chief executive of a listed company (such child not
being himself or herself a director or chief executive of it) in shares or
debentures.
(2) For those purposes-
(a)a contract, assignment or right of subscription entered into, exercised or
made by, or a grant made to, the spouse of a director or chief executive of a
company (not being herself or himself a director or chief executive of it)
shall be taken also to have been entered into, exercised or made by, or (as
the case may be) as having been made to, the director or chief executive;
and
(b)the same applies with respect to a contract, assignment or right of
subscription entered into, exercised or made by, or grant made to, a child
under the age of 21. years of a director or chief executive of a listed
company (such child not being himself or herself a director or chief
executive of it).
(3) A director or chief executive of a listed company is under a duty to notify
the company in writing of the occurrence while he is a director or chief executive, of
either of the following events, namely-
(a)the grant by the company to his spouse, or to his child under the age of -U
years, of a right to subscribe for shares in, or debentures of, the company;
and
(b) the exercise by his spouse or by his child under the age of 21 years of
such a right granted by the company to his spouse, or his child.
(4) In a notification given to the listed company under subsection (3) there
shall be stated
(a)in the case of the grant of a right, the like information as is required by
section 28 to be stated by the director or chief executive on the grant to
him by another corporation of a right to subscribe for shares in, or
debentures of, that other corporation; and
(b)in the case of the exercise of a right, the like information as is required by
section 28 to be stated by the director or chief executive on the exercise of
a right granted to him by another corporation to subscribe for shares in, or
debentures of, that other corporation.
(5) A duty imposed by subsection (3) on a director or chief executive
must be performed by him before the end of 5 days beginning with the day
following that on which the occurrence of the event giving rise to it comes to
his knowledge. e.
(6) A person who-
(a) fails to perform, within the proper period, a duty to which he is subject
under subsection (3) or
(b) in purported performance of such a duty, makes to a listed company
a statement which he knows to be false, or recklessly makes to a listed
company statement which is false,
commits an offence and is liable on summary conviction to a fine of $10,000 and to
imprisonment for 6 months and on conviction upon indictment to a fine of $100,000
and to imprisonment for 2 years.
(7) The rules set out in Part 1 of the Schedule have effect for the interpretation
of, and otherwise in relation to, subsections (1) and (2); and subsections (6) and (7)
of section 28 apply with any requisite modification.
(8) For purposes of section 29, a duty imposed on a director or chief executive
by this section is deemed to be imposed by section 28.
[cf. U.K. 1985 c. 6, s. 328]
Duty to notify Unified Exchange,
Commissioner of Banking of matters notified
under preceding sections
32. (1) Whenever a listed company. is notified of any matter by a director,
chief executive or shad director in consequence of the performance of a duty
imposed by sectio or 31, and that matter relates to listed shares or listed
debentures, the company is under a duty to notify the Unified Exchange and the
Commission of that matter.
(2) Upon receipt of any information under subsection (1) the Unified Exchange
shall forthwith publish such information in such manner and for such period as may
be approved by the Commissioner.
(3) Whenever a listed company that is or is the holding company of an
authorized financial institution is notified of any matter by a director, chief executive
or shadow director in consequence of the performance of a duty imposed by section
28 or 31, and that matter relates to listed shares or listed debentures, the company is
under a duty (in addition to to -the duty imposed by subsection(1)) to notify the
Commissioner of Banking of that matter.
(4) A duty imposed on a listed company by subsection (1) or (3) must be fulfilled
before the end of the day next following that on which it arises.
(5) If default is made in complying with this section, the listed company and
every officer of it who is in default commits an offence and is liable to a fine of
$2,000.
[cf. U.K. 1985 c. 6, s. 329]
PART IV
POWER TO INVESTIGATE LISTED COMPANY OWNERSHIP
Power to investigate ownership of a listed company
33. (1) Where it appears to the Financial Secretary that there is good reason to
do so, he may appoint one or more competent inspectors to investigate and report
on the membership of any listed company, and otherwise
with respect to the company, for the purpose of determining the true persons who
are or have been financially interested in the. success or failure (real or apparent) of
the company or able to control or materially to influence its policy.
(2) The appointment of an inspector under this section may define the scope of
the investigation (whether as respects the matter or the period to which it is to
extend or otherwise) and in particular may limit the investigation to matters
connected with particular shares or debentures.
(3) If application for an investigation under this section with respect to
particular shares or debentures of a listed company is made to the Financial
Secretary by members of the listed company, and the number of applicants or the
number of shares held by them is not less than the number required for an
application. for the appointment of inspectors under section 142(1) of the
Companies Ordinance (Cap. 32)
(a)the Financial Secretary shall appoint an inspector to conduct the
investigation (unless he is satisfied that the application is vexatious); and
(b)the inspector's appointment shall not exclude from the scope of the
investigation any matter which the application seeks to have included,
except in so far as the Financial Secretary is satisfied that it is
unreasonable for that matter to be investigated.
(4) Subject to the terms of his appointment, an inspector's powers extend to the
investigation of any circumstances suggesting the existence of an arrangement or
understanding which, though not legally binding, is or was observed or likely to be
observed in practice and which is relevant to the purposes of the investigation.
-(5) The Financial Secretary may, before appointing an inspector, require the
applicant or applicants to give security, to an amount not exceeding $50,000, or
such other sum as may be prescribed by regulations, for payment of the costs of
the investigation.
[cf. U.K. 1985 c. 6', s. 442]
Investigation of share dealings
34. (1) If it appears to the Financial Secretary that there are circumstances
suggesting that contraventions may have occurred in relation to a listed company's
shares or debentures, of section 28 (taken with the Schedule), or of section 31(3) to
(5) he may appoint one or more competent inspectors to carry out such
investigations as are requisite to establish whether or not such contraventions have
occurred and to report the result of their investigations to him.
(2) The appointment of an inspector under this section may limit the period to
which the investigation is to extend or confine it to shares or debentures of a
particular class, 'or both.
[cf. U.K. 1985 c. 6, s. 446]
Inspector's powers during investigation
35. (1) If an inspector appointed under section 33 or 34 thinks it necessary for
the purposes of his investigation to investigate also the ownership of any shares in
or debentures of another corporation which is or at any relevant time has been an
associated corporation of the listed company he shall have power to do so and shall
report on the ownership of the shares or debentures of the other corporation so far
as he thinks. that the results of his investigation of
those shares or debentures are relevant to the investigation of the ownership of
shares in or debentures of the listed company.
(2) An inspector appointed under either section may at any time in the course
of his investigation, without the necessity of making an interim report, inform the
Financial Secretary of matters coming to his knowledge as a result of the
investigation tending to show that an offence has been committed.
[cf. U.K. 1985 c. 6, s. 443]
Production of documents and evidence to inspectors
36. (1) When an inspector has been appointed under section 33 or 34, it is the
duty of all officers and agents of the listed company, and of all officers and agents
of any other corporation the ownership of whose shares or debentures are
investigated under section 35(1)
(a)to produce to the inspector all books and documents of or relating to the
company or, as the case may be, the other corporation which are in their
custody or power;
(b) to attend before the inspector when required to do so; and
(c)otherwise to give the inspector all assistance in connection with the
investigation which they are reasonably able to give.
(2) If the inspector considers that a person other than an officer or agent of the
listed company or other corporation is or may be in possession of information
concerning its shares or debentures, he may require that person to produce to him
any books or documents in his custody or power relating to the company or other
corporation, to attend before him and otherwise to give him all assistance in
connection with the investigation which he is reasonably able to give;-and it shall
be the duty of that person to comply with the requirement.
(3) An inspector may examine on oath the officers and agents of the listed
company or other corporation, and any such person as is mentioned in subsection
(2), in relation to the shares or debentures of the listed company or other
corporation, and may administer an oath accordingly.
(4) A person is not excused from answering a question put to him under this
section by an inspector on the ground that the answer might tend to incriminate
him but, where such person claims, before answering the question, that the answer
might tend to incriminate him. neither the question nor the answer shall be
admissible in evidence against him in criminal proceedings other than proceedings
in relation to a charge of perjury in respect of the answer.
(5) In this section a reference to officers or to agents includes past, as well as
present, officers or agents (as the case may be); and 'agents', in relation to a
company or other corporation, includes its bankers and solicitors and persons
employed by it as auditors, whether these persons are or are not officers of the
company or other corporation.
[cf. U.K. 1985 c. 6, s. 434]
Delegation of powers by inspectors
37. (1) An inspector appointed under section 33 or 34 may, by instrument in
writing, delegate to any person the powers conferred by section 36 to require the
production of any books or documents and to put questions to officers and agents
otherwise than on oath, or either of those powers.
(2) Where 2 or more inspectors are appointed as aforesaid in respect of the
same investigation, the power conferred by this section may be exercised by any of
them.
Obstruction of inspectors
38. (1) When an inspector is appointed under section 33 or 34 this section
applies in the case of
(a) any officer or agent of the list ed company;
(b)any officer or agent of another corporation whose shares or debentures
are investigated under section 35; and
(c) any such person as is mentioned in section 36(2).
(2) If that person-1
(a) refuses to produce any book or document which it is his duty under
section 36 to produce; or
(b) refuses to attend before an inspector when required to do so; or
(c)refuses to answer any question put to him by an inspector with respect to
the shares or debentures of the company or other corporation (as the case
may be),
the inspector may certify the refusal in writing to the High Court.
(3) The High Court may thereupon enquire into the case; and, after hearing any
witnesses who may be produced against or on behalf of the alleged offender and
after hearing any statement which may be offered in defence, the Court may punish
the offender in like manner as if he had been guilty of contempt of the Court.
(4) References in this section to an inspector include any person to whom the
powers of an inspector are delegated under section 37.
(5) Section 36(5) shall apply with regard to references in subsection (1) to an
officer or agent.
[cf. U.K. 1985 c. 6, s. 436]
Inspector's reports
39. (1) The inspector may, and if so directed by the Financial Secretary shall,
make interim reports to the Financial Secretary, and on the conclusion of the
investigation shall make a final report to him.
(2) Any such report shall be written or printed, as the Financial Secretary
directs.
(3) The Financial Secretary may,. if he thinks fit-
(a)forward a copy of any report made by the inspector to the listed company's
registered office or principal place of business in Hong Kong;
(b)furnish a copy on request and on payment of the fee provided in the
regulations to
(i) any member of the listed company or other corporation which is the
subject of the report;
(ii) any person whose conduct is referred to in the report;
(iii) the auditors of that listed company or corporation;
(iv) the applicants for the investigation;
(y) any other person whose financial interests appear to the Financial
Secretary to be affected by the matters dealt with in the report, whether as
a creditor of the listed company or corporation, or otherwise; and
(e) cause any such report to be printed and published.
[cf. U.K. 1985 c. 6, s. 437]
Expenses of investigation of the affairs of a company
40. (1) The expenses of and incidental to an investigation by an inspector
appointed by the Financial Secretary under section 33 or 34 shall be defrayed in the
first instance out of general revenue, but the following persons shall, to the extent
mentioned, be liable to repay such expenses to the Government
(a)any person who is convicted by a court or magistrate on a prosecution
instituted as a result of the investigation shall be liable to such extent (if
any) as may be ordered by such court or magistrate;
(b)the listed company dealt with by the investigation shall be liable to such
extent (if any) as the Financial Secretary may direct;
(c)the director and chief executive of the listed company dealt with by the
investigation shall be liable to such extent (if any) as the Financial
Secretary may direct;
(d)any person who has an interest notifiable under Part II in relevant share
capital of the listed company dealt with by the investigation shall be liable
to such extent (if any) as the Financial Secretary may direct; and
(c)the applicants for the investigation, where the inspector was appointed
under section 33(3), shall be liable to such extent (if any) as the Financial
Secretary may direct.
(2) The report of an inspector appointed under section 33(3) may, if he thinks
fit, and shall if the Financial Secretary so directs, include a recommendation as to
the directions, if any, he thinks appropriate, in the light of his investigation, to be
given under subsection (1)(b), (c), (d) or (e).
(3) Any liability to repay the Government imposed by paragraph (a) of
subsection (1), shall, subject to the satisfaction of the right of the Government
to repayment, be a liability also to indemnify all persons against liability under
paragraphs (b), (c), (d) and (e) thereof, and any person liable under the said
paragraphs (a), (b), (c), (d) and (e) shall be entitled to contribution ion from any
other person liable under the same paragraph, according to the amount of their
respective liabilities thereunder.
Power to impose restrictions on shares and debentures
41. (1) If in connection with an investigation under either section 33, 34 or 35 it
appears to the Financial Secretary that there is difficulty in finding out the relevant
facts about any shares (whether issued or to be issued), he may by order direct that
the shares shall until further order be subject to the restrictions of Part V.
(2) This section, and Part V in its application to orders under it, apply in
relation to debentures as in relation to shares.
[cf. U.K. 1985 c. 6,s. 445]
Power to obtain information as to those interested
in shares, etc.
42. (1) If it appears to the Financial Secretary that there is good reason to
investigate the ownership of any shares in or debentures of a listed company and
that it is unnecessary to appoint an inspector for the purpose, he may require any
person whom he has reasonable cause to believe to have or to be able to obtain any
information as to the present and past interests in those shares or debentures and
the names and addresses of the persons interested and of any persons who act or
have acted on their behalf in relation to the shares or debentures to give any such
information to the Financial Secretary.
(2) For this purpose a person is deemed to have an interest in shares or
debentures if he has any right to acquire or dispose of them or of any interest in
them, or to vote in respect of them, or if his consent is necessary for the exercise of
any of the rights of other persons interested in them, or if other persons interested
in them can be required, or are accustomed, to exercise their rights in accordance
with his instructions.
(3) A person who fails to give information required of him under this section,
or who in giving such information makes any statement which he knows to be false
in a material particular, or recklessly 'makes any statement which is false in a material
particular, commits an offence and is liable on summary conviction to a fine of
$10,000 and to imprisonment for 6 months and on conviction upon indictment to a
fine of $100,000 and to imprisonment for 2 years.
[cf. U.K. 1985 c. 6, s. 444]
Privileged information
43. Nothing in sections 33 to 42 shall require disclosure to the Financial
Secretary or to an inspector appointed by him
(a)by any person of information which he would in an action in the High
Court be entitled to refuse to disclose on grounds of legal professional
privilege except, if he is a lawyer, the name and address of his client; or
(b)by an authorized financial institution acting as a corporation's banker or
financial adviser, of information as to the affairs of any of its customers
other than the corporation.
[cf. U.K. 1985 c. 6, s. 452 (1)]
PART V
ORDERS IMPOSING RESTRICTIONS ON
SHARES
Consequence of order imposing restrictions
44. (1) So long as any shares are directed to be subject to the restrictions of
this Part
(a)any transfer of those shares or, in the case of unissued shares, any
transfer of the right to be issued with them, and any issue of such shares is
void;
(b) no voting rights are exercisable in respect of the shares;
(c)no further shares shall be issued in right of them or in pursuance of any
offer made to their holder; and
(d)except in a liquidation, no payment shall be made of any sums due from the
company on the shares, whether in respect of capital or otherwise.
(2) Where shares are subject to the restrictions of subsection (1)(a), any
agreement to transfer the shares or, in the case of unissued shares, the right to be
issued with them is void (except an agreement to sell the shares on the making of
an order under section 46(3)).
(3) Where shares are subject to the restrictions of subsection (1)(c) or (d), an
agreement to transfer any right to be issued with other shares in right of those
shares, or to receive any payment on them (otherwise than in a liquidation) is void
(except an agreement to transfer any such right on the sale of the shares on the
making of an order under section 46(3)).
[cf. U.K. 1985 c. 6, s. 454]
Punishment for attempted evasion of restrictions
45. (1) A person commits an offence and is liable to a fine of$10,000 and to
imprisonment for 6 months if he
(a)exercises or purports to exercise any right to dispose of any shares which,
to his knowledge, are for the time being subject to the restrictions of this
Part or of any. right to be issued with any such shares; or
(b)votes in respect of any such shares (whether as holder or proxy), or
appoints a proxy to vote in respect of them; or
(c)being the holder of any such shares, fails to notify of their being subject to
those restrictions any person whom he does not know to be aware of that
fact but does know to be entitled (apart from the restrictions) to vote in
respect of those shares whether as holder or as proxy; or
(d)being the holder of any such shares, or being entitled to any right to be
issued with other shares in right of them, or to receive any payment on
them (otherwise than in a liquidation), enters into any agreement which is
void under section 44(2) or (3).
(2) If shares in a company are issued in contravention of the restrictions, the
listed company and every officer of it who is in default commits an offence and is
liable to a fine of $10,000 and to imprisonment for 6 months.
[cf. U.K. 1985 c. 6, s. 455]
Relaxation and removal of restrictions
46. (1) Where shares in a company are by order made subject to the restrictions
of this Part, application may be made to the High Court for an order directing that
the shares be no longer so subject.
(2) If the order applying the restrictions was made by the Financial Secretary,
or he has refused to make an order disapplying them, the application may be made
by any person aggrieved; and if the order was made by the High Court under
section 24, it may be made by any such person or by the company.
(3) Subject to this section, an order of the High Court or the Financial Secretary
directing that shares shall cease to be subject to the restrictions may be made only
if
(a)the High Court or (as the case may be) the Financial Secretary is satisfied
that the relevant facts about the shares have been disclosed to the
company and no unfair advantage has accrued to any person as a result
of the earlier failure to make that disclosure; or
(b)the shares are to be sold and the High Court (in any case) or the Financial
Secretary (if the order was made under section 15 or 41) approves the sale.
(4) Where shares in a company are subject to the restrictions, the High Court
may on application order the shares to be sold, subject to the court's approval as to
the sale, and may also direct that the shares shall cease to be subject to the
restrictions.
(5) An application to the High Court under subsection (4) may be made by the
Financial Secretary (unless the restrictions were imposed by court order under
section 24), or by the company.
(6) Where an order has been made under subsection (4), the High Court may
on application make such further order relating to the sale or transfer of the shares
as it thinks fit.
(7) An application to the High Court under subsection (6) may be made-
(a)by the Financial Secretary (unless the restrictions on the shares were
imposed by court order under section 24);
(b) by the company;
(c)by the person appointed by or in pursuance of the order to effect the
sale; or
(d) by any p erson interested in the shares.
(8) An order (whether of the Financial Secretary or the High Court) directing
that shares shall cease to be subject to the restrictions of this Part, if it is
(a)expressed to be made with a view to permitting a transfer of the shares; or
(b) made under subsection (4),
may continue the restrictions mentioned in section 44(1)(c) or (d), either in whole or
in part, so far as they relate to any right acquired or offer made before the transfer.
(9) Subsection (3) does not apply to an order directing that shares shall cease
to be subject to any restrictions which have been continued in force in relation to
those shares under subsection (8).
[cf. U.K. 1985 c. 6, s. 456]
Further provisions on sale by court order of restricted shares
47. (1) Where shares are sold in pursuance of an order of the High Court under
section 46(4) the proceeds of sale, less the costs of the sale, shall be paid into court
for the benefit of the persons who are beneficially interested in the shares; and any
such person may apply to the High Court for the whole or part of those proceeds to
be paid to him.
(2) On application under subsection (1) the High Court shall order the payment
to the applicant of the whole of the proceeds of sale together with any interest
thereon or, if any other person had a beneficial interest in the shares at the time of
their sale, such proportion of those proceeds and interest as is equal to the
proportion which the value of the applicant's interest in the shares bears to the total
value of the shares.
(3) On making an order under section 46(4) or (6) the High Court may further
order that the applicant's costs be paid out of the proceeds of sale; and if that order
is made, the applicant is entitled to payment of his costs out of those proceeds
before any person interested in the shares in question receives any part of those
proceeds.
[cf. U.K. 1985 c. 6, s. 457]
PART VI
MISCELLANEOUS
Offences by corporations
48. (1) Where a corporation is guilty of an offence under section 15(3), 24(3),
28(8), 31(6), 42(3) or 45(1) and it is proved that the offence occurred with the
consent or connivance of, or was attributable to any neglect on the part of any
director, manager, secretary or other similar officer of the corporation, or any person
who was purporting to act in any such capacity, he as well as the corporation is
guilty of that offence and is liable to be proceeded against and punished
accordingly.
.(2) Where the affairs of a corporation are managed by its members, subsection
(1) applies in relation to the acts and defaults of a member in connection with his
functions of management as if he were a director of the corporation.
(3) In this section 'director', in relation to an offence under section 28(8) or
31(6), includes a shadow director.
Prosecution of offences
49. Without prejudice to the provisions of any other enactment relating to the
prosecution of criminal offences and without prejudice to the powers of the
Attorney General in relation to the prosecution of such offences, the Commission
may institute proceedings in respect of any offence against this Ordinance that is
punishable on summary conviction.
Limitation on commencement of proceedings
50. Notwithstanding section 26 of the Magistrates Ordinance (Cap. 22 7), an
information or complaint relating to an offence under this Ordinance may be tried if
it is laid or made, as the case may be, at any time within 3 years after the commission
of the offence or within 12 months after the first discovery thereof by the
prosecutor, whichever period expires first.
Method of giving notification 0 a listed company
51. Any notification required to be given to a listed company under this
Ordinance may be given by leaving it at or sending it by post to the registered
office of the listed company or, where the listed company does not have a
registered office in Hong Ko g, the listed company's principal place of business in
Hong Kong.
Form of registers and indices
52. (1) Any register or index required by this Ordinance to be kept by a
company may be kept either by making entries in bound books or by recording the
matters in question in any other manner.
(2) The power conferred on a company by subsection (1) includes power to
keep the register or index by recording the matters in question otherwise than in a
legible form so long as the recording is capable of being reproduced in a legible
form.
(3) If any register or index required by this Ordinance to be kept by a company
is kept by the company by recording the matters in question otherwise than in a
legible form, any duty imposed on the company by virtue of this Ordinance to allow
inspection of, or to furnish a copy of, the register or index or any part of it shall be
deemed to be a duty to allow inspection of, or to furnish, a reproduction of the
recording or of the relevant part of it in a legible form.
(4) Where any such register or index is not kept by making entries in a bound
book, but by some other means, adequate precautions shall be taken for guarding
against falsification and facilitating its discovery, and where default is made in
complying with this subsection, the company and every officer of the company who
is in default shall for every day during which the default continues be liable to a fine
of $200.
Regulations
53. The Governor in Council may make regulations
(a)prescribing anything by this Ordinance required or permitted to be
prescribed by regulations; or
(b) generally for the better carrying out of this Ordinance.
Forms
54. The Commission may, by notice in the Gazette, specify forms to be used
for the purposes of this Ordinance.
SCHEDULE [ss. 28, 29, 30, 31 & 34]
PROVISIONS SUPPLEMENTING AND INTERPRETING SECTIONS 28 To 31
PART I
Rules for interpretation ofthe sections
1. (1) A reference to an interest in shares or debentures is to be read as including any
interest of any kind whatsoever in shares or debentures.
(2) Accordingly, there are to be disregarded any restraints-or restrictions to which the
exercise
of any right attached to the interest is or may be subject.
2. Where property is held on trust and any interest in shares or debentures is comprised in
the property, any beneficiary ofthe trust. who (apart from this paragraph) does not have an
interest in the shares or debentures is to be taken as having such an interest; but this paragraph is
without prejudice to the following provisions of this Part of this Schedule.
3. (1) A person is taken to have an interest in shares or debentures if-
(a)he enters into a contract for their purchase by him (whether for cash or other
consideration); or
(b)not being the registered holder, he is entitled to exercise any right conferred by the
holding of the shares or debentures, or is entitled to control the exercise of any such
right.
(2) For purposes of sub-paragraph (1)(b), a person is taken to be entitled to exercise or
control the exercise of a right conferred by the holding of shares or debentures if he
(a)has a right (whether subject to conditions or not) the exercise of which would make him
so entitled; or
(b)is under an obligation (whether or not so subject) the fulfilment-of which would make
him so entitled.
(3) A person is not by virtue of sub-paragraph (1)(b) taken to be interested in shares or
debentures by reason only that he
(a)has been appointed a proxy to vote. at a specified meeting of a listed company or of
any class of its members and at any adjournment of that meeting; or
(b)has been appointed by a corporation to act as its representative at any meeting of a
listed company or of any class of its members.
4. A person is taken to be interested in shares or debentures if a corporation is interested in
them and
(a)that corporation or its directors are accustomed to act in accordance with his directions
or instructions; or
(b)he is entitled to exercise or control the exercise of one-third or more ofthe voting
power at general meetings of that corporation.
5. Where a person is entitled to exercise or control the exercise of one-third or more of the
voting power at general meetings of a corporation and that corporation is entitled to exercise or
control the exercise of any of the voting power at general meetings of another corporation
('the effective voting power') then, for purposes of paragraph 4(b), the effective voting power
is taken to be exercisable by that person.
6. (1) A person is taken to have an interest in shares or debentures if, otherwise than by
virtue of having an interest under a trust
(a) he has a right to call for delivery of the shares or debentures to himself or to his
order; or
(b) he has a right to acquire an interest in shares or debentures or is under an
obligation to
take an interest in shares or debentures,
whether in any case the right or duty is conditional or absolute.
(2) Without prejudice to paragraph 1, rights or obligations to subscribe for shares or
debentures are not to be taken, for purposes of sub-paragraph (1), to be rights to acquire, or
obligations to take, an interest in shares or debentures.
7. Persons having a joint interest are deemed each of them to have that interest.
8. It is immaterial that shares or debentures in which a person has an interest are
unidentifiable.
9. So long as a person is entitled to receive, during the lifetime of himself or another,
income from trust property comprising shares or debentures, an interest in the shares or
debentures in reversion or remainder is to be disregarded.
10. (1) A person is deemed to be uninterested in shares or debentures if, and so long as, he
holds them as a bare trustee or as a custodian trustee.
(2) For the purposes of sub-paragraph (1) a person shall not be held not to be a bare trustee
in respect of any property by reason only
(a)that the person for whose benefit the property is held is not absolutely entitled thereto
as against the trustee by reason only that he is an infant or is a person under a
disability; or
(b)that the trustee has the right to resort to the property to satisfy any outstanding
charge or lien or for the payment of any duty, tax, cost or other outgoing.
There shall be disregarded an interest of a person subsisting by virtue of-
(a)any unit trust or mutual fund corporation authorized under section 15 of the Securities
Ordinance (Cap. 333); or
(b) a charitable scheme made by order of any court of competent jurisdiction.
12. Delivery to a person's order of shares or debentures in fulfilment of a contract for the
purchase of them by him or in satisfaction of a right of his to call for their delivery, or failure
to
deliver shares or debentures in accordance With the terms of such a contract or on which such a
right
falls to be satisfied, is deemed to constitute an event in consequence of the occurrence of which
he
ceases to be interested in them, and so is the lapse of a person's right to call for delivery of
shares or
debentures.
PART II
Periods within which duties imposed by section 28 must be fulilled
13. (1) A duty imposed on a person by section 28(1)(a) to notify an interest must, if he
knows. of the existence of the interest at the commencement of this Ordinance, be performed
before the expiration of the period of 5 days beginning with the day following the day appointed
under section 1(2); otherwise it must be performed before the expiration of the period of 5 days
beginning with the day next following that on which the existence of the interest comes to his
knowledge.
(2) A duty imposed on a person by section 28(1)(b) to notify an interest must, if he knows
of the existence of the interest on the day on which he becomes a director or, as the case may
be, the chief executive, be performed before the expiration of the period of 5 days beginning
with the day following that day.
(3) Otherwise, the duty must be performed before the expiration of the period of 5 days
beginning with the day following that on which the existence of the interest comes to his
knowledge.
14. (1) A duty imposed on a person by section 28(2) to notify the occurrence of an event
must, if at the time at which the event occurs he knows of its occurrence and of the fact that its
occurrence gives rise to the duty, be performed before the expiration of that period of 5 days
beginning with the day following that on which the event occurs.
(2) Otherwise, the duty must be performed before the expiration of a period of 5 days
beginning with the day following that on which the fact that the occurrence of the event gives
rise to the duty comes to his knowledge.
PART III
Circumstances in which duty imposed by section 28 is not performed
15. (1) Where an event of whose occurrence a director or chief executive is, by virtue of
section 28(2)(a), under a duty to notify a company, consists of his entering into a contract for
the purchase by him of shares or debentures, the duty is not performed in the absence of
inclusion in the notification of a statement of the price to be paid by him under the contract.
(2) A duty imposed on a director or chief executive by section 28(2)(b) is not performed in
the absence of inclusion in the notification of the price to be received by him under the
contract.
16. (1) A duty imposed on a director or chief executive by virtue of section 28(2)(c) to
notify a company is not performed in the absence of inclusion in the notification of a
statement of the consideration for the assignment (or, if it be the case that there is no
consideration, that fact).
(2) Where an event of whose occurrence a director or chief executive is, by virtue of
section 28(2)(d), under a duty to notify a company, consists in his assigning a right, the duty is
not performed in the absence of inclusion in the no notification of a similar statement.
17. (1) Where an event of whose occurrence a director or chief executive is, by virtue of
section 28(2)(d), under a duty to notify a company consists in the grant to him of a right to
subscribe for shares or debentures, the duty is not performed in the absence of inclusion in the
notification of a statement of
(a) the date on which the right was granted;
(b) the period during which or the time at which the right is exercisable;
(c) the consideration for the grant (or, if it be the case that there is no consideration, that
fact); and
(d) the price to be paid for the shares or debentures.
(2) Where an event of whose- occurrence a director or chief executive is, by section
28(2)(d), under a duty to notify a company consists in the exercise of a right granted to him to
subscribe for shares or debentures, the duty is not performed in the absence of inclusion in the
notification of a statement of
(a)the number of shares or amount of debentures in respect of which the right was
exercised; and
(b)if it be the case that they were registered in his name, that fact, and, if not, the name
or names of the person or persons in whose name or names they were registered,
together (if they were registered in the names of 2 persons or more) with the number
or amount registered in the name of each of them.
18. In this Part, a reference to price paid or received includes any consideration other than
money.
PART IV
Provisions with respect to register of directors' and
chief executives' interests to be kept under section 29
19. The register must be so made up that the entries in it against the several names appear
in chronological order.
20. A duty imposed by section 29(2) to (4) must be performed before the expiration of the
period of 3 days beginning with the day after that on which the duty arises.
21. The nature and extent of an interest recorded in the register of a director or chief
executive in any shares or debentures shall, if he so requires, be recorded in the register.
22. The company is not, by virtue of anything done for the purposes of section 29 or this
Part, affected with notice of, or put upon enquiry as to, the rights of any person in relation to
any shares or debentures.
23. The register shall-
(a) if the company's register of members is kept at its registered office, be kept there;
(b)if the company's register of members is not so kept, be kept at the company's
registered office or the place where the register of members is kept; or
(c)if the company does not have a registered office in Hong Kong, be kept at the
company's principal place of business in Hong Kong,
and shall during business hours (subject to such reasonable restrictions as the company in general
meeting may impose, so that not less than 2 hours in each day be allowed for inspection) be open
to
the inspection of any member of the company without charge and of any other person on
payment of $1, or such less sum as the company may prescribe, for each inspection.
24. (1) Any member of the company or other person may require a copy of the register, or
of any part of it, on payment of 25 cents, or such less sum as the company may prescribe, for
every 100 words or fractional part of 100 words required to be copied.
(2) The company shall cause any copy so required by a person to be sent to him within the
period of 10 days beginning with the day after that on which the requirement is received by the
company.
25. The company shall send notice in the form specified by the Commission under section
54 to the Registrar of Companies of the place where the register is kept and of any change in
that place, save in a case in which it has at all times been kept at its registered office.
26. Unless the register is in such a form as to constitute in itself an index, the company
shall keep an index of the names inscribed in it, which shall
(a)in respect of each name, contain a sufficient indication to enable the information
entered against it to be readily found; and
(b) be kept at the same place as the register,
and the company shall, within 14 days after the date on which a name is entered in the register,
make
any necessary alteration in the index.
27. The register shall be produced at the commencement of the company's annual general
meeting and remain open and accessible during the continuance of the meeting to any person
attending the meeting.
[cf. U.K. 1985 c. 6, s. 198] [cf. U.K. 1985 c. 6, s. 199] [cf. U.K. 1985 c. 6, s. 200] [cf. U.K. 1985 c. 6, s. 201] [cf. U.K. 1967 c. 81, s. 33] [cf. U.K. 1985 c. 6, s. 202] [cf. U.K. 1985 c. 6, s. 203] [cf. U.K. 1985 c. 6, s. 204] [cf. U.K. 1985 c. 6, s. 205] [cf. U.K. 1985 c. 6, s. 206] [cf. U.K. 1985 c. 6, s. 207] [ cf. U.K. 1985 c. 6, s. 208] [cf. U.K. 1985 c. 6, s. 209] [cf. U.K. 1985 c. 6, s. 210] [cf. U.K. 1985 c. 6, s. 211] [cf. U.K. 1985 c. 6, s. 212] [cf. U.K. 1985 c. 6, s. 213] [cf. U.K. 1985 c. 6, s. 214] [cf. U.K. 1985 c. 6, s. 215] [cf. U.K. 1985 c. 6, s. 216] [cf. U.K. 1985 c. 6, s. 217] [cf. U.K. 1985 c. 6, s. 218] [cf. U.K. 1985 c. 6, s. 219] [cf. U.K. 1985 c. 6, s. 324] [cf. U.K. 1985 c. 6, s. 325] [cf. U.K. 1985 c. 6, s. 326] [cf. U.K. 1985 c. 6, s. 328] [ cf. U.K. 1985 c. 6, s. 329] [cf. U.K. 1985 c. 6, s. 442] [ cf. U.K. 1985 c. 6, s. 446] [cf. U.K. 1985 c. 6, s. 443] [ cf. U.K. 1985 c. 6, s. 434] [cf. U.K. 1985 c. 6, s. 436] [cf. U.K. 1985 c. 6, s. 437] [cf. U.K. 1985 c. 6, s. 445] [cf. U.K. 1985 c. 6, s. 444] [ cf. U.K. 1985 c. 6, s. 452(1)] [cf. U.K. 1985 c. 6, s. 454] [cf. U.K. 1985 c. 6, s. 455] [cf. U.K. 1985 c. 6, s. 456] [ cf. U.K. 1985 c. 6, s. 457] [ss. 28, 29, 30, 31 & 34]