HONGKONG AND SHANGHAI BANK ORDINANCE, 1866

HONGKONG AND SHANGHAI BANK ORDINANCE, 1866

- 1886.-


No. 1 of 1866, repealed by No. 58 of 1911.


NO. 2 of 1866.

An Ordinance for the incorporation of the and
Shanghai Banking Corporation.

[14th August, 1866.]

WHEREAS several persons have agreed to form a joint-stock company,
under the name or style of The Hongkong and Shanghai Banking
Corporation, for the purpose of carrying on the business of
banking and of conducting all business usually transacted by
bankers; AND WHEREAS, for the purpose of establishing and carry-
ing on the said undertaking, they have agreed that a capital or
5,000,000 dollars, divided into 40,000 shares of 125 dollars each,
shall be raised in the first instance, with power to increase such
capital to the extent and in the manner hereinafter mentioned;
AND WHEREAS,the said several persons have for some time been
carrying on the business of bankers as an unregistered and
un-incorporated company for the better accomplish-
ing and carrying into effect the objects and purposes of the said
company, they have applied, to the Governor to grant to them and
all other the subscribers of such capital an Ordinance of Incorpora-
tion, which the Governor has consented and agreed to do, under
and subject to the conditions, restrictions, and provisions herein-
after contained,:-

1. This Ordinancemay be cited as the Hongkong and
Shanghai Bank Ordinance, 1866.

[s. 2, rep. No. 50 of 1911.]

8. Such and so many person is and bodies politic and
corporate as now are or may hereafter become proprietors of
any, share of or in the capital of the company hereby
established shall be one body politic and corporate, in name
and in deed, by the name of The Hongkong and Shanghai,
Banking Corporation, (hereafter called the company),
and by that time shall and may sue and be sued in all
courts, whether of law or of equity, and shall have perpetual
succession, with a common seal, which may be by them
varied and changed it their pleasure.

* As amended by Law Rev, Ord., 1923.





4. The. company is and shall be established for the
purpose of carrying on, under the management of a Court of
Directors, the business of banking in the Colony: Provided
always that nothing herein contained shall be deemed to
restrict the company, with the consent of the Commissioners
of His Majesty's Treasury (such consent being signified in
writing under the hands of the said Commissioners or any
two of them), from establishing any branch banks or any
agencies for exchange, deposit, and remittance at, any place
out of the Colony in conformity with the law of such place.

(2). The company shall continue incorporated and shall
carry the business of banking under the provisions and
conditions contained in this Ordinance for a term of twenty-
One years commencing from the 14th day of August, 1908.

5.-(1) The capital of the company shall consist of
5,000,000 dollars divided into 40,000 shares of 125 dollars
each.
[remainder of s. 5 and ss. 6, 7, 8, and 9, rep. No. 50 of
1911.]

10. Within twelve months from the date of this Ordinance
the pesons who have subscribed for at least one-half of the
said capital of 5,000,000 dollars, shall, to be satisfaction
of the Governor (evidenced by a notification or proclamation
under the hand of the Governor punished in the Gazette),
enter into and execute a deed of settlement (and so as
each such person so executing shall hold at least five shares
in the said capital), which deed of settlement shall be filed
with the Registrar of Companies within twelve months
from the date thereof, whereby provision shall be made for
carrying on the business of the company by a Court of
Directors to be elected by the shareholders of the company,
as by the said deed may be provided, and whereby provision
shall also be made for the payment by the shareholders of
all moneys to becom due in rspect of the instalments on
the shares taken by them, and also of such further or other
sums as are hereinafter provided, and in which said deed shall
be contained (in addition to all such further provisions as
may by the Governor be considered necessary and usual in
like cases for the management of the affairs of the company)
provisions for effectuating the following objects:-

* See section 29 and note on p. 155.
+ The capital has since been increased. See section 22, and footnote.









1st. For holding general meetings of the company once at
least in every year at an appointed time and place; 2nd. For
holding extraordinary general meetings of the company on
the requisition of nine or more sharehoders, holding in the
whole at least two thousand shares in the company; 3rd.
For the management of the affairs of the company and the
election and qualification of the directors; 4th. For the
retirement of at least one-fourth of the directors of the
company yearly; 5th. For preventing the company from
purchasing any shares, or making advances of money, or
securities for money, to any person on the security of shares
in the company; 6th. For the publication, as may be
directed in the said deed, of the assets and liabilities of
the company, of the amounts of promissory notes in
circulation, and of the coin held in the establishments of
the company in the Colony or elsewhere; 7th. For the
verification of such statements, and for the furnishing of
such further information as the proceedings of the banking
respecting the state and proceedings of the banking
establishnients of the company the Colony or elsewhere;
8th. For the yearly audit of the acconts of the company
by two or more auditors, not being directors at the time;
9th. For the yearly communication of the auditors' report, of a
balance sheet, and of profit and loss accounts to every
shareholder; and 10th. For the appointment of managers,
or agents, or other officers to perform the duties of managers
or agents.

11. The provisions of this Ordinaiice, the provisions
in the said deed of settleinent or in any supplemental deed
to be made in pursuance thereof, or to be contained in any
by-laws mad in pursuance of any such deed, shall be taken
to be the existing rules and regulations of the company,
except so far as the same may be reptignaid to the laws
of the Colony or of any ports, towns, cities, or places where
the company may carry on business, or to the provisions of
this Ordinance : Provided, nevertheless, that no by-law or
supplemental deed shall have any force or effect until the
same has been approved by the Governor and a certificate
of such approval has been given under his hand.

12.-(1) It shall be lawful for the company to make,
issue, and circulate bills and notes of the company payable
to bearer on demand at the place of issue and in coin

lawfully current at such place, and to re-issue the same
from the place at which the same were originally issued.

(2) Without prejudice to the conditional privilege now
possessed by the company of issuing and re-issuing rom
the head office a limited number of notes or smaller amount,
subject to their unconditional withdrawal from circulation
should the Government decide to issue small notes of lower
denomination than five follars, no such bills or notes shall
hereafter be issued for any other sum than the sum of five
dollars or some multiple of such sum or other equivalent
amount.

(3) All such bills or notes issued in any colony or other
place form any establishment of the company, not being the
principal establishment of the company in such colony or
place, shall be made payable not only at the establishment
from which the same were issued but also at the principal
establishment of the company in such colony or place.

(4) Nothing herein contained shall exempt the company
from the operation of any laws restricting or regulating the
issue of notes in the Colony or in any place outside the
Colony where the company has banks or branch banks.

(5) The shareholders of the company shall be subject to
unlimited liability in respect of all or any such issues of
bills or notes, and in case the general assets of the company
are in the event of the company being wound up, in-
sufficient to satisfy the claims of both the note-holders
and the general creditors, then the shareholders of the
company, after satisfying the remaining demands of the
note-holders, shall be liable to contribute towards payment
of the debts of the general creditors a sum equal to the
amount received by the note-holders out of the general
assets of the company.

(6) For the purposes of this section, the general assets
of the company means the funds available for payment of
the general creditors as well as the note-holders.

13.-(1) The total amount of the bills and notes of the
company payable to bearer on demand actually in circula-
tion shall bot at any time exceed the sum of 20,000,000
dollars.

* As amended by law Rev. Ord., 1923.
+ As amended by No. 10 of 1922, and Law Rev. Ord., 1923.
























(2) The company shall at all times keep deposited, either
with the Crown Agents or with trustees to be appointed by
the Secretary of State, or partly with the Crown Agents
and partly with such trustees, coin of denominations to be
approved by the Secretary of State, or, at the option of the
company securities to be so approved, or at the like option,
partly such coin and partly such securities, equal to two-
thirds of the said amount of 20,000,000 dollars, such coin
or securities or such coin and, securities to be held by the
Crown. Agents or by the said trustees, separately or jointly,
as special funds exclusively available for the redemption of
the bills and notes payable to bearer on demand issued by
the company, and, in the event of the company becoming
insolvent, to be applied accordinly so far as may be
necessary, but without prejudice to the rights of the holders
of such bills and notes to rank with other creditors of the
company against the assets of the company.

(3) Notwithstanding the restriction imposed by sub-
sectioh (1) upon the total number of the bills and notes of
the company payable to bearer on demand actually in
circulation, bills and notes of the company payable to bearer
on demand may be issued and be in actual circulation to all,
amount in excess of the sald sum of 20,000,000 dollars, if
there has been specially deposited and is kept in the
custody of the Colonial Secretary and the Colonial Treasurer
an amount of coin, or bullion, or coin and bullion, equal
to the whole value of such excess issue for the time being
actually in circulation, to be held by the said Colonial
Secretary and Colonial Treasurer exclusively for the re-
demption of such bills and notes, wherever the same may
have, been issued Provided nevertheless that nothing
herein contained shall exempt the company from the
operation of any laws restricting or regulating the issue
of bills or notes in the Colony or in any place outside the
Colony where the company has banks or branch banks.

(4) Notwithstanding anything contained in sub-section (3),
portions of the security ill coin or bullion provided for by
the said sub-section may be kept deposited in such places
outside the Colony, with such persons, to such amounts,
and subject to such conditions, as may at any time and from
time to time be approved by the Governor.



14. The total amount of the debts and liabilities of the
company of what nature or kind soever shall not any
time exceed the aggregate amount of the then existing
bona^ fide assets and property of the company and the sum
for which its shareholders are liable under the provisions
herein contained.

15. If at any time there is a suspensin of payment of
any of the bills or notes of the company, it shall not be
lawful for the company, during the continuance of such
suspension of payment, to make any fresh issue of bills or
notes.

16. The company shall mpt discount, or in any manner
advance money upon, bills of exchange, promissory notes,
or other negotiable paper in or upon which the name of
any director or offficer of the company appears as drawer
or aceeptor, either on his individual or separate account
or jointly with any partner, or otherwise than as a director
or officer of the company, to an amount exceeding one-third
of the amount of the sum for the time being under discount
or advanced by the company, nor shall any director be
allowed to obtain credit on his own personal guarantee.

17. it shall be lawful for the company, notwithstanding
the Statutes of Mortmain or any other statutes or laws to
the contrary, to purchase, hold, take and enjoy such lhouses,
offices, lands, buildings, and hereditaments as amy be
thought necessary or proper for the purpose of managing,
conducting, and carrying on the affairs, concerns, and
business of the company, but not for the purpose of
speculation or any other purpose than as aforesaid, and
so as no such houses, offices, lands, or buildings shall be
more than the yearly value of 30,000 dollars at the time
of acquiring the same or of such further yearly value as
may be sanctioned by the Governor, and to sell, convey,
and dispose of the said property or any portion or part
therof, when not wanted for the purposes of the said
business.

18. All persons and bodies politic and corporate who are
otherwise competent shall be and are hereby authorised and
empowered to grant, sell, alien, and convey in mortmain unto
and to the use of the company any such houses, offices, lands,
building,s and other hereditaments whatsoever as aforesaid.








19.-(1) It shall not be lawful for the company to make
any purchase of messuages, lands, or hereditaments in the
Colony or elsewhere beyond the annual valne of 30,000
dollars, at the time of aequring the same, or of such further
annual value as may be sanctioned by the Governor.

(2) When any such purchase is made, the directors shall,
within three months from the making and coin completing thereof,
report the same, in writing to the Governor, stating the
amount of the purchase money and giving a description of
the property so purchased, and such other pariculars relating
thereto as may be required by the Governor.

(3) In case any property so purchased is re-sold, the com-
pany shall within fourteen days give notice in to the
Colonial, Secretary of such re-sale and of the price obtained
for the same.

20. Except for the purposes aforesaid, it shall not be
lawful for the company to invest, lay out, employ, advance,
or embark any part of its capital or funds in the purchase or
any lands, houses, or other real property, or in any trading
or mercantile speculation or business whatsoever (not usually
considered as falling within the ordinary and legitimate
purposes and, operations of a banking establishment), but it
shall, nevertheless, be lawful for the company to take, accept,
enfore, release, realize or deal with any security now held
or which may heieafter be held by the company for any
moneys owing or to become owing to the company, or for
any liabilities incurred or to be incurred towards or by the
company by way of mortgage, pledge, hypothecation, deposit
or otherwise howsoever of every kind of property or rights.

21. It shall be lawful for the company to sell, dispose of,
and convert into money any goods, wares, or merchandise
which may be taken by it in satisfaction, liquidation, or pay-
ment,of any debt, and also to sell and convey any lands,
houses, and other real property whatsoever, goods, wares, or
merchandise,, which it may have acquired in manner afore-
said.

22. It shall be lawful for the company, notwithstanding
and anything contained in section or in the deed of settlement,
from time to time to extend or increase, its capital for the

As amended by. No. 24 of 1914.
As amended by No. 10 of 1922. See also Proclamations Nos. 3 of 1907
and 2 of 1921.


time being by the creation and sale of new shares, so as the
same is made with the consent of a General (Extraordinary)
Meeting of the Shareholders to be specially called for that
purpose, and with the onsent previously obtained of the
Governor, and unde such conditions and provisions as he
may think fit, such consent being evidenced by a notification
or proclamation to that effect under the hand of the Governor
and published in the Gazette, and so as the total amount of
the capital of the company shall not exceed the sum of
50,000,000 dollars: Provided that whenever and so often as
any further capital is raised then a notification or proclama-
tion to that effect, under the hand of the Governor, shall be
pubished in the Gazette, and the present capital of
20,000,00 dollars together with such further capital shall
thenceforth be taken to be the fixed capital of the company,
but with power nevertheless further to increase such capital
from time to time as is herein provided.
[s. 23, rep. No. 50 of 1911.]

24. The directors shall, if and whenever they may be
required to do so by the Governor, produce and submit to
him, or to such persons or officers as he may appoint for the
purpose, for his or their inspection and examination, the
several accounts and statements which by the said deed of
settlement may be directed to be made and furnished.

25. If the company becomes insolvent, every shareholder
shall, in addition to his liability for the amount of the issue
of notes under the provisions of section 12, be liable to
contribute to the payment of the debts, engagements, and
liabilities of the company not only such parts of the shares
held by hom as have not been theretofore called for and paid
up, but also such further sums of money, not exceeding the
amount of the shares so held by him as may be requistite and
necessary to satisfy and discharge the debts, engagements,
and liabilities of the company.

26. In the said deed of settlement, and in every transfer
of any shares in the company, due provision shall be made
for the payment by the shareholders of such amounts as
aforesaid.

27. In the event of the insolvency of the company, or of
any suspension in the payments of the company for the space











of sixty days in succession or for any number of days it
intervals which amount altogether to sixty days within any
one year, or if the company has not well and truly maintained,
abided by, performed, and observed all the rules, orders,
provisions and directions contained herein and in the said
deed, then and in any of such cases it shall be lawful for the
Governor, with the advice of the Legislative Council by all
Ordinance to be passed for that puipose, to repeal this
Ordinance and declare that the incorporation hereby granted
to the company shall cease and determine and become
absolutely void.

28.-(1), Subject as hereinafter mentioned, the company
may be wound up by the Supreme Court,, and all the pro-
visions of the Companies Ordinance, 1911, with respect to the
winding-up of companies registered thereunder shall apply to
the company as if expressly re-enacted in this Ordinance, save
and except in such respects as the same may be altered or
modified as hereafter mentioned or provided for.

(2) The circumstances under which the company may be
wound up are as follows:-

(a) in the event of the company being dissolved or ceasing
to carry on business, or carrying on business only for the
purpose of winding up its affairs; or

(b) whenever the company is unable to pay its debts; or

(c) whenever the court, is of opinion that it is just and
equitable that the company should be wound up.

(3) The company shall be deemed unable to pay its

(a) whenever a creditor to whom the company is indebted,
at law or in equity, by assignment or otherwise, in a sum
exceeding 300 dollars, then due, has served on the company,
by leaving the same at the principal place of business of the
company, or by delivering to the manager or some director
or principal officer of the company, or by otherwise serving
the same in such manner as the court may approve or direct,
a demand under his hand requiring the company to pay the,
sum due, and the company has, for the space of three weeks
succeeding the service of such demand, neglected to pay
such, sum or to secure or compound for the same to the
satisfacton of the creditor; or


(b) whenever execution or other process issued on a judg-
ment, decree, or order obtained in any court in favour of any
creditor, at law or in equity, in any proceeding instituted by
such creditor against the company, is returned unsatisfied
in whole or in part; or

(c) whenever it is proved, to the satisfaction of the court,
that the company is unable to pay its debts.

29. On the determination of the term of twenty-one
years mentioned in section 4 (2) the powers and privileges
hereinbefore conferred on the company shall cease, unless
the Governor, with the advice of the Legislative Council,
declares to the contrary and by an Ordinance to that effect
authorises the company to continue incroporated under the
aforesaid provisions for a further term of ten years or for
such period and under provisions and conditions as
may be contained in the said Ordinance.

30. Nothing in this Ordinance shall affect or be deemed
to affect the rights of His Majesty the King, His heirs and
successors, or the rights of any body politic or corporate or
of any other peson except such as are mentioned in this
Ordinance and those claiming by from or under them.
[Originally No. 5 of 1866. No. 24 of 1914. No. 10 of 1922. Law Rev. Ord., 1924.] Short title. Incorporation. Period of incorporation. Capital of company. Execution of deed of settlement, and filing thereof with Registrar of Companies. Rules and regulations. Power to issue bills and notes payable to bearer on demand, and conditions of such issue. Limit of amount of issue of bills and notes. [s. 13 contd.] Security required in respect of ordinary note issue. Security required in respect of excess note issue. Part of security for excess note issue may be kept in such places and under such conditions as the Governor may approve. Limit of total debts and liabilities. Right of note issue suspended if payment suspended. Limit of accommodation of directors and officers. Power to hold lands and buildings, subject to certain restrictions. Power to convey lands in mortmain to company. Notification of puchase and re-sale of lands. Prohibition against purchase of other lands and against trading, but with power to deal with securities for moneys owing, etc. Power to sell and convert property taken as security. Power to increase capital under certain conditions. Production of accounts and statements. Liability of shareholders for debts of company in case of insolvency. Provisions to be included in deed and in transfers. Provisions for repeal of the Ordinance on happening of certain events. Winding-up of company. [cf. No. 58 of 1911.] Power to extend period of incorporation.. Saving of the rights of the Crown and of certain other rights.

[Originally No. 5 of 1866. No. 24 of 1914. No. 10 of 1922. Law Rev. Ord., 1924.] Short title. Incorporation. Period of incorporation. Capital of company. Execution of deed of settlement, and filing thereof with Registrar of Companies. Rules and regulations. Power to issue bills and notes payable to bearer on demand, and conditions of such issue. Limit of amount of issue of bills and notes. [s. 13 contd.] Security required in respect of ordinary note issue. Security required in respect of excess note issue. Part of security for excess note issue may be kept in such places and under such conditions as the Governor may approve. Limit of total debts and liabilities. Right of note issue suspended if payment suspended. Limit of accommodation of directors and officers. Power to hold lands and buildings, subject to certain restrictions. Power to convey lands in mortmain to company. Notification of puchase and re-sale of lands. Prohibition against purchase of other lands and against trading, but with power to deal with securities for moneys owing, etc. Power to sell and convert property taken as security. Power to increase capital under certain conditions. Production of accounts and statements. Liability of shareholders for debts of company in case of insolvency. Provisions to be included in deed and in transfers. Provisions for repeal of the Ordinance on happening of certain events. Winding-up of company. [cf. No. 58 of 1911.] Power to extend period of incorporation.. Saving of the rights of the Crown and of certain other rights.

https://oelawhk.lib.hku.hk/items/show/1076

1923

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