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Consequential and Other Amendments

Companies Ordinance

1. Preferential payments

Section 265 of the Companies Ordinance (Cap. 32) is amended—

(a) in subsection (1)(db), by repealing everything after “, held” and substituting—

“deposits, to each depositor—

(i) in respect of the deposits, or portion thereof, that the depositor holds in his own right, the aggregate amount so held on deposit, up to $100,000, regardless of the number of deposits;

(ii) in respect of the deposits, or portion thereof, that the depositor holds as a bare trustee for each of the beneficiaries, the aggregate amount so held on deposit, up to, subject to subsection (5J), $100,000, regardless of the number of deposits so held for the beneficiary;

(iii) in respect of the deposits, or portion thereof, that the depositor holds in a client account for each of the clients, the aggregate amount so held on deposit, up to, subject to subsection (5J), $100,000, regardless of the number of deposits so held for the client; and

(iv) in respect of the deposits, or portion thereof, that the depositor holds as a trustee (but not a bare trustee) under each of the trusts, the aggregate amount so held on deposit, up to $100,000, regardless of the number of deposits so held under the trust;”;

(b) in subsection (5D)(a), by repealing “戶” and substituting “款人”;

(c) by repealing subsections (5E) and (5F) and substituting—

“(5E) If—

(a) an arrangement has been entered into or carried out on or after the specified date in relation to a deposit with the company except where the arrangement is one in pursuance of a legally enforceable obligation incurred prior to that date;

(b) the arrangement has, or would have had but for this subsection, the effect of enabling a person to become entitled to priority under subsection (1)(db), to which the person would otherwise not be entitled; and

(c) it would be concluded, having regard to—

(i) the manner in which, and the circumstances under which, the arrangement was entered into or carried out;

(ii) the form and substance of the arrangement; and

(iii) the result in relation to the operation of this Ordinance that, but for this subsection, would have been achieved by the arrangement,

that the arrangement was entered into or carried out for the sole or dominant purpose of enabling the person, either alone or in conjunction with other persons, to become entitled to priority under subsection (1)(db), to which the person would otherwise not be entitled,

the priority given under subsection (1)(db) shall apply as if the arrangement or any part thereof had not been entered into or carried out.

(5F) Deposits given priority under subsection (1)(db) do not include—

(a) a deposit held for the account of the Exchange Fund established by the Exchange Fund Ordinance (Cap. 66);