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Following is the speech by the Acting Secretary for Financial Services, Mrs Rebecca Lai, in moving the amendments to Clauses 5, 25, 26 and 27 of the Companies (Amendment) Bill 1999 in the Legislative Council today (Wednesday):

Madam President,

I move that Clauses 5, 25, 26 and 27 be amended as set out in the paper circulated to Members.

Clause 5 is related to the "merger relief" proposed provisions. The new section 48F of the Companies Ordinance empowers the Financial Secretary to make regulations to relieve companies from the requirements of section 48B in relation to premiums other than cash premiums, and to restrict or modify any merger relief from those requirements specified under new sections 48C to 48E. These regulations allow different provisions be made for individual cases, including incidental and supplementary provisions. They also allow flexible modifications of the relevant requirements set out under the principal ordinance. It is stated in the proposed bill that "Where there is any conflict between any of the provisions of sections 48B to 48E and any of the provisions made under this section, the latter shall prevail."

During the scrutiny of the Bill, the Committee commented that it should not be expressly stipulated that where there is conflict between the provisions, the regulations made by the Financial Secretary shall prevail. After careful consideration and further research, the government has agreed to amend Section 48F (3), specifying draft regulations proposed by the Financial Secretary have to be laid before and approved by resolution of the Legislative Council. This requirement is in line with the provisions on merger relief under the Company Law of the United Kingdom and is similar to the enabling provisions used in other sections of the Companies Ordinance.

The proposed amendment to Clause 25 is made in response to a suggestion by the Bills Committee. Firstly, the proposed amendment improves the wording of sub-section 303B(1) in the Bill and sets out the protection over personal liability afforded to the Registrar of Companies or a relevant person in respect of an error or omission made when providing information or services involving computers. The proposed amendment also adds a new sub-section 303B(1A) which stipulates that the protection over personal liability afforded to the relevant person shall not in any way affect any liability of the Government in tort for the error or omission.

The proposed amendments to Clauses 26 and 27 have been made in response to the comments submitted by the Law Society of Hong Kong. The reference to "the liabilities of husbands and wives respectively" relating to the winding up of a registered and an unregistered company in Sections 322(3)(g) and 328(2) of the Companies Ordinance should have been repealed at the time when section 175 of the Ordinance was repealed. The proposed amendment deals with this technical omission. It also improves the drafting of the two sections.

Thank you, Madam President.

End/Wednesday, June 23, 1999

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