HONGKONG AND SHANGHAI BANK ORDINANCE

HONGKONG AND SHANGHAI BANK ORDINANCE

CHAPTER 70.

THE HONGKONG AND SHANGHAI BANK.

To amend the constitution of The Hongkong and Shanghai Banking
Corporation.

[17th May, 1929.]

1. This Ordinance may be cited as The Hongkong

and Shanghai Banking Corporation Ordinance.

2. In this Ordinance

'auditor' means auditor of the bank;

'bank' means 'The Hongkong and Shanghai Banking Corporation'
created by virtue of the provisions of the Hongkong and
Shanghai Bank Ordinance, 1866, and continued by this
Ordinance;

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

'capital' means the share capital for the time being of the bank;

'chairman' means the chairman or his deputy presiding at any meeting
of shareholders or of the board;

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

'chief manager' means the person for the time being performing the
duties of chief manager, and 'acting chief manager' means the
person for the time being performing the duties of acting chief
manager of the bank;

'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.

'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;

'dividend' includes any interim dividend, bonus or profits on any
share;

'dollar' means dollar in Hong Kong currency;

'general meeting' means a general meeting of shareholders;

'head office' means the principal place of business in the Colony for
the time being of the bank;





'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;

'Ordinance' or 'the Ordinance' means this Ordinance;

'ordinary resolution' means a resolution of a simple majority of
shareholders at a general meeting; 'person' includes a firm,
company or corporation; ttregulations' means the regulations of
the bank for the time being in force;

'share' means share in the sharecapital of the bank;

'Shareholder' or 'holder of a share' or 'holder of any share' means
every person whose name is entered in any register of
shareholders of the bank as a holder of any share or shares;

3. Notwithstanding the repeal of the Hongkong and Shanghai
Bank Ordinance, 1866, the bank shall continue to be incorporated by
the name of 'The Hongkong and Shanghai 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 frorn 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 have any 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 regulations 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, agencies and sub-agencies
whether in the Colony or elsewhere which may hereafter
be established: 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 establishments.

6. It shall be lawful for the bank to sell, dispose of and convert
into money any real or personal property of whatever decription,
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 twenty million dollars, divided into
one hundred and sixty thousand shares of one hundred and
twenty-five dollars 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 fifty million
dollars.

8. The shareholders in general meeting 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 amount 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 resolution shall be filed with the Colonial
Secretary within seven days after the passing of the same or within
such further time 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, 1951, Or such later
date as may be fixed under the provisions of section 5 of the Bank
Notes Issue Ordinance, it shall be lawful for the bank to make, issue
and circulate notes of the bank payable to bearer on demand at the
place of issue 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
&nomination than five dollars issued by the bank shall be limited to
such number as 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 circulation shall subject to the provisions of
subsection (3) not at any time exceed the equivalent of the sum of forty-
six million dollars.

(2) The bank 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,
securities to be approved by the Secretary of State equal in value to the
sum of twentythree million three hundred and thirty-three thousand
three hundred and thirty-three dollars, such 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
becorning involvent, to be applied accordingly so far as may be
necessary, but without prejudice to the rights of the holders of such
notes to rank with other creditors of the bank against the assets of the
bank.

(3) Notwithstanding the provisions of subsection (i), notes of the
bank 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
forty-six million dollars, if there has been paid in accordance with
subsection (i) of section 4 of the Exchange Fund Ordinance to the
Financial Secretary of the Hong Kong Government for the account of
the Exchange Fund referred to in such Ordinance and





against the issue to the bank of certificates of indebtedness as
provided in such Ordinance an amount equal to the face value of such
excess issue for the time being actually in circulation to be held by
such Exchange Fund exclusively for the redemption of such notes.

12. (1) In the event of the bank being dissolved the shareholders
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 II applied in the first instance in
payment of the liability on such notes.

(2) Every shareholder shall in addition to his liability in respect of
its notes, under subsection (i) 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 contracts 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 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 notes or other negotiable paper in
or upon which the name 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 of the debts and liabilities of the bank of what
nature or kind soever shall not at any time exceed the aggregate
arnount of the then existing bona 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 Court, and all the provisions of the Companies Ordinance, 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 ceasing 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 or
Successors, or the rights of any body politic or corporate
or of any other persons except such as are mentioned in this
Ordinance and those claiming by, from or under them.
Originally 6 of 1929. Fraser 6 of 1929. 8 of 1946. 37 of 1950. Short title. 37 of 1950, Schedule. Interpretation. 37 of 1950, Schedule. (2 of 1866.) 8 of 1946, s. 2, Schedule. [s. 2 cont.] Incorporation. (2 of 1866.) 37 of 1950, Schedule. Regulations of the bank. Ordinance and regulations binding on all person; power to amend regulations; proof of regulations. Objects of the bank and conduct of its business; 37 of 1950, Schedule. Power to close establishments. Power to sell and convert property taken as security. Present capital; increase of capital. [s. 7 cont.] Alteration of capital. Reorganization of capital. Power to issue bearer notes. (Cap. 65.) 37 of 1950, Schedule. Amount of and security for note issue. 8 of 1946, s. 2, Schedule. 37 of 1950, Schedule. 37 of 1950, Schedule. 37 of 1950, Schedule. (Cap. 66.) [s. 11 cont.] 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. (Cap. 32.) [s. 17 cont.] Saving.

Originally 6 of 1929. Fraser 6 of 1929. 8 of 1946. 37 of 1950. Short title. 37 of 1950, Schedule. Interpretation. 37 of 1950, Schedule. (2 of 1866.) 8 of 1946, s. 2, Schedule. [s. 2 cont.] Incorporation. (2 of 1866.) 37 of 1950, Schedule. Regulations of the bank. Ordinance and regulations binding on all person; power to amend regulations; proof of regulations. Objects of the bank and conduct of its business; 37 of 1950, Schedule. Power to close establishments. Power to sell and convert property taken as security. Present capital; increase of capital. [s. 7 cont.] Alteration of capital. Reorganization of capital. Power to issue bearer notes. (Cap. 65.) 37 of 1950, Schedule. Amount of and security for note issue. 8 of 1946, s. 2, Schedule. 37 of 1950, Schedule. 37 of 1950, Schedule. 37 of 1950, Schedule. (Cap. 66.) [s. 11 cont.] 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. (Cap. 32.) [s. 17 cont.] Saving.

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