SECRETARY for Financial Services Michael Cartland says that while it is premature to determine if the Companies Ordinance needs an extensive overhaul or simply minor modifications, a thorough review is necessary to ensure it reflects today's business environment.
Mr Cartland said yesterday that while the number of registered companies in Hong Kong had jumped from 26,000 to 416,000 in the past 22 years, the Companies Ordinance had last been reviewed in 1984.
However, he said that review was skewed because it was based on changes which were 10 to 20 years old.
''We have updated legislation covering listed companies and banks and there are elaborate regulatory systems, but most companies fall out of this net and half of the listed companies are incorporated overseas,'' he said.
Mr Cartland said it was also important to remember that new legislation covering listed companies and the banking sector had been a result of major crises - the 1987 stock market crash and the banking system's collapse in the mid-'80s.
As a result, it was important to make improvements to guard against this type of events rather than reacting when they occurred, he said.
