HONG KONG AND SHANGHAI BANK ORDINANCE, 1929

HONG KONG AND SHANGHAI BANK ORDINANCE, 1929

No. 6 of 1929.

An Ordinance to amend the constitution of the Hong Kong
and Shanghai Banking Corporation.

[17th May, 1929.]

1. This Ordinance may be cited as the Hong Kong and
Shanghai Bank Ordinance, 1929. -

2. In this Ordinance,

(a) ' Auditor ' means auditor of the bank

(b) ' Bank ' means the ' Hong Kong and Shanghai
Banking Corporation ' 'Created by virtue of the provisions of
the Hong Kong and Shanghai Bank Ordinance, 1866, and
continued by this Ordinance;

(c) ' Board ' means board of directors and (if the context
so requires) means the directors assembled at a meeting of the
board;

(d) ' Capital ' means the share capital for the time being
of the bank;

(e) 'Chairman ' means the chairman or his deputy
presiding at any meeting of shareholders or of the board ;

(f) ' Chief accountant ' means the person for the time
being performing the duties of chief accountant of the bank at
the head office;

(g) ' Chief manager' means the person for the time being
performing the duties of chief manager of the bank

The regulations formerly contained in the Schedule to this Ordinance
have been transferred to the corresponding volume of the Regulations
of Hong Kong.
As amended by Law Rev. Ord., 1939, Supp. Sched.





(h) ' Directors ' means the directors for the time being of
the bank or (if the context so requires) directors present and
voting at a meeting of the board ;

(i) ' Dividend ' includes any, interim dividend, bonus or
profits on any share ;

(j) Dollar ' means dollar in Hong Kong currency.

(k) General meeting ' means a general meeting of
shareholders ;

(l) ' Head office ' means the principal place of business
in the Colony for the tinie being of the bank ;

(m) ' Incapacitated shareholder ' means a shareholder
being an infant, or an idiot or lunatic, or non compos mentis, or
a bankrupt or one whose estate has, by the operation of law,
become vested in any other person or persons in trust for or
for the benefit of his creditors ;

(n) ' Ordinance ' or ' the Ordinance ' means this
Ordinance;

(o) ' Ordinary resolution means a resolution of a simple
majority, of shareholders at a general meeting;

(p) Person ' includes a firm, company or corporation

(q) Regulations - means the regulations of the bank for
the time being in force;

(r) ' Share ' means share in the share capital of the bank

(s) ' Shareholder ' or ' hoWer of a share ' or ' holder
of any share ' means every person whose narne is entered in any
register of shareholders of the bank as a holder of any share or
shares;

(t) Supreme Court ' means the Supreme Court of the
Colony and includes any judge or judges thereof, sitting either
together or separately, in court or in chambers.

3. Notwithstanding the repeal of the Hong Kong and
Shanghai Bank Ordinance, 1866, the bank shall continue to be
incorporated by the name of ' The Hong Kong and Shanghai

As amended by Law Rev. Ord., 1939, Supp. Sched.





Banking Corporation and by that name shall and may sue
and be sued in all courts, and in that name shall continue to
have perpetual succession, with a common seal which it may
vary and change at its pleasure : Provided that there shall be
no limit whatever to the period of incorporation.

4.-(1) The regulations are hereby substituted for and shall
replace the deed of settlement dated the 20th day of July, 1867,
and all the articles contained therein and any amendments
thereof, and shall be for all purposes the regulations of the
bank, and this Ordinance and the regulations shall be binding
in all respects upon the bank and upon all persons whatsoever,
whether shareholders or not, and, shall regulate the rights and
liabilities of all the above persons inter se, their heirs, executors,
administrators, assigns or successors.

(2) At any time and from time to time it shall be lawful for
the shareholders by special resolution to amend the provisions
of the regulations or any of them. Provided that no such
amendment shall be valid or haveany force or effect until it has
been approved by the Governor and published in the Gazette.
Any such power to amend as aforesaid includes the power to
amend, vary, rescind, revoke or suspend any regulation or any
part thereof and the power to make any new regulation.

(3) A copy of the regWations and of any such special
resolution to amend, purporting to be certified by the Colonial
Secretary to be a correct copy, shall be received in all courts of
justice, and for all purposes, as valid and sufficient evidence of
the contents of the regulations and of the fact that such
regulations have been duly approved and published in the
Gazette.

5.-(1) The objects of the bank shall be the carrying on the
business of banking and as ancillary thereto the other businesses
and objects set forth and contained in regulation 3 of the
regulations, under the management of the directors, and the
bank shall be at liberty to continue, commence, carry on and
effect all or any of its objects at any of its establishments, that
is to say, at its head office and also at its present branches,
agencies and sub-agencies and also at any additional branches,

As amended by Law Rev. Ord., 1939, Supp. Sched.





agencies and sub-agencies whether in the Colony or elsewhere
which may hereafter be established with the consent of the
Commissioners for the time being of His Majesty's Treasury
(such consent being signified in writing under the hands of the
said Commissioners or of any two of them) : Provided that the
business of the bank's branches, agencies and sub-agencies shall
conform to the laws relating to banking whether passed before or
after the date of this Ordinance in any of the territories in which
the powers hereby conferred are exercised.

(2) The bank shall have power to close any of its establish-
ments.

6. It shall be lawful for the bank to sell, dispose of and
convert into money any real or personal property of whatever
description, mortgaged, charged, pledged or hypothecated to the
bank or taken by it in satisfaction, liquidation or payment of any
debt or liability.

7. The capital of the bank is 20,000,000 dollars, divided into
160,000 shares of $125 each, all of which are fully paid up at the
commencement of this Ordinance. The capital may, with the
consent of the Governor previously obtained and notified in the
Gazette, from time to time be increased by ordinary resolution,
of which notice has been duly given, passed at a general meeting,
to a total amount not exceeding the sum of 50,000,000 dollars.

8. The shareholders in generalmeeting shall, in addition to
the power hereinbefore conferred of increasing the capital of the
bank, have power by ordinary resolution-

(a) to consolidate and divide all or any of the capital of the
bank into shares of larger nominal arnount than its existing
shares ;

(b) to subdivide its shares or any of them into shares of
smaller amount than is fixed by this Ordinance or by the
regulations, so however that in the subdivision the proportion
between the amount paid and the amount, if any, unpaid on each
reduced share shall be the same as it was in the case of the
share from which the reduced share is derived; and

(c) to cancel shares which at the date of the passing of the
resolution in that behalf have not been taken or agreed to be





taken by any person, and to diminish the amount of its capital
by the amount of the shares so cancelled, and a cancellation of
shares in pursuance of this section shall not be deemed to be a
reduction of capital.

9.-(1) The shareholders may, subject to the prior approval
of the Governor, by special resolution reorganize the capital,
whether by the consolidation of shares of different classes or
by the division of the shares into shares of different classes

Provided that no preference or special privilege attached to
or belonging to any class of shares shall be interfered with except
by a resolution passed by a majority in number of shareholders
of that class holding three-fourths of the share capital of that
class and confirmed at a meeting of shareholders of that class
in the same manner as a special resolution of the bank is
required to be confirmed, and every resolution so passed shall
bind all shareholders of the class.
(2) A copy of any such resoluton shall be filed with the
Colonial Secretary within seven days after the passing of the
same or within such further tiem as the Governor may allow,
and the resolution shall not take effect until such copy has
been so filed.

10. Until and including the 12th day of July, 1939, it shall
be lawful for the bank to make, issue and circulate notes of the
bank payable to bearer on emand at the place of issue and in
coin lawfully current at such place, and to reissue the notes from
the place at which the same were originally issued. After that
date the bank shall cease to make, issue or reissue notes but
shall redeem. any notes which it has previously issued or
reissued. The number of notes of a lower denomination than
five dollars issued by the bank shall be limited to such number
may from time to time be authorized by the Secretary of
State.

11-(1) The total amount of the notes of the bank payable
to bearer on demand actually in cirtulation shall not at any time
exceed the equivalent of the sum of 30,000,000 dollars.

(2) The bank shall at all times keep deposited either with

As amended by Law Rev. Ord., 1939, Supp Sched.





the Crown Agents or with trustees to be appointed by the
Secretary of State or partly with the Crown Agents anti partly
with such trustees, coin of denominations to be approved by the
Secretary of State, or at the option of the bank, securities to be
so approved, or at the like option, partly such coin and partly
such securities, equal in value to the sum Of 23,333,333 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
notes payable to bearer on demand issued by the bank, and in
the event of the bank becoming insolvent, to be applied accord-
ingly so far as may be necessary, but without prejudice to the
rights of the holders of such notes to, rank with othercreditors
of the bank against the assets of the bank.

(3) Notwithstanding the restriction imposed by sub-
section (1) upon the total nurnber of the notes of the bank
payable to bearer on dernand actually in circulation, notes of the
Uank payable to bearer on demand may be issued and be in actual
circulation to an amount in excess of the equivalent of the said
sum of 30,000,000 dollars if there has been specially deposited
and is kept in the custody of the Colonial Secretary and the
Accountant-General 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 Colonial
Secretary and the Accountant-General exclusively for the
redemption of such notes, wherever the same may have been
issued.

(4) Notwithstanding anything contained in sub-section (3

portions of the security in 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.

(5) Notwithstanding anything in this section, whatever may
be the totat amount of notes of the bank payable to bearer on
demand actually in circulation at any one time, the amount of
coin deposited by the bank in accordance with sub-sections (1),
(2), (3) and (4) shall never be less than one-third of the total
amount of such notes actually in circulation.






12. (1) In the event of the bank being dissolved the share-
holders shall be liable in respect of its notes in the same manner
as if the bank had been formed with unlimited liability on the
part of its shareholders, but they shall be entitled to, have the
security for the issue of such notes which is referred to in
section 11 applied in the first instance, in payment of the liability
on such notes.

(2) Every shareholder shall in addition to his ability in
respect of its notes under subsection (1) be liable to contribute
to the payment of the debts, engagements and liabilities of the
bank not only any moneys unpaid on the issue price of his shares
but also a further sum of money not exceeding in amount the
nominal Value of every share held by him.

13.-(1) Contracts on behalf of the bank may be made as
follows-

(a) any contract, which if made between private persons
would be by law required to be in writing under seal, may be
made on behalf of the bank in writing under seal and may in the
same manner be varied or discharged

(b) any contract, which if made between private persons
would be by law required to be in writing signed by the parties
to be charged therewith, may be made on behalf of the bank in
writing, signed by any person acting under its authority, express
or implied, and may in the same manner be varied or discharged;

(c) any contract, which if made between private persons
would by law be valid although made by parol only and not
reduced into writing, may be made by parol on behalf of the
bank by any person acting under its authority, express or
implied, and may in the same manner be varied or discharged.

(2) All cont racts made according to this section shall be
effectual in law and shall bind the bank and its successors and
all other parties thereto, their heirs, executors, administrators or
assigns or successors, as the case may be.

14. A bill of exchange or promissory note shall be deemed
to have been made, accepted or indorsed on behalf of the bank

As amended by Law Rev. Ord., 1939, Supp. Sched.





if made, accepted or indorsed in the name of or by or on, behalf
or on account of the bank by any person acting under its
authority.

15. The bank shall not discount, or in any manner advance
money upon, bills of exchange, promissory hotes or other
negotiable paper in or upon which the narne of Any director or
officer of the bank appears as drawer or acceptor, either on his
individual or separate account, or jointly with any partner, or
otherwise than as a director or officer of the bank to an amount
exceeding one-tenth of the amount of the sum for the time being
under discount or advanced by the bank, nor shall any director
be allowed to obtain credit on his own personal guarantee.

16. The total amount it of the debts and liabitities of the bank
of what nature or kind soever shall not at any time exceed the
aggregate amount of the then existing bond fide assets and
property of the bank and the sum for which its shareholders
are liable under the provisions herein contained.

17.-(1) Subject as hereinafter mentioned, the bank may be
wound up by the Supreme Court, and all the provisions of the
Companies Ordinance, 1932, with respect to, the winding-up of
companies registered thereunder shall apply to the bank 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 bank may be wound
up are as follows---

(a) in the event of the bank being dissolved or ceaging to
carry on business or carrying on business only for the purpose
of winding-up its affairs; or

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

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

18. 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 person except such as are mentioned in this Ordinance
and thDsc claiming by, from or under them.

As amended by Law Rev. Ord., 1939 Supp. Sched.
[Origianlly No. 6 of 1929. Law Rev. Ord., 1939.] Short title. Interpretation. Ordinance No. 2 of 1866. Incorporation. Ordinance No. 2 of 1866. Regulations of the bank. Ordinance and regulations binding on all persons; power to amend regulations; proof of regulations. Objects of the bank and conduct of its business; power to close establishments. Power to sell and convert property taken as security. Present capital; increase of capital. Alteration of capital. Reorganization of captial. Power to issue bearer notes. [cf. No. 54 of 1935, s. 2.] Amount of and security fro note issue. [cf. No. 54 of 1935, s. 4.] [s. 11. contd.] Liability of shareholders. Form of contracts. Bills of exchange and promissory notes. Limit of accommodation to directors and officers. Limit of debts and liabilities. Winding up and application of Ordinance No. 39 of 1932 thereto. Saving of rights of the Crown and certain other rights.

[Origianlly No. 6 of 1929. Law Rev. Ord., 1939.] Short title. Interpretation. Ordinance No. 2 of 1866. Incorporation. Ordinance No. 2 of 1866. Regulations of the bank. Ordinance and regulations binding on all persons; power to amend regulations; proof of regulations. Objects of the bank and conduct of its business; power to close establishments. Power to sell and convert property taken as security. Present capital; increase of capital. Alteration of capital. Reorganization of captial. Power to issue bearer notes. [cf. No. 54 of 1935, s. 2.] Amount of and security fro note issue. [cf. No. 54 of 1935, s. 4.] [s. 11. contd.] Liability of shareholders. Form of contracts. Bills of exchange and promissory notes. Limit of accommodation to directors and officers. Limit of debts and liabilities. Winding up and application of Ordinance No. 39 of 1932 thereto. Saving of rights of the Crown and certain other rights.

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