The Secretary for Financial Services & the Treasury has specified July 15 as the commencement date for the shareholder remedies-related provisions in the Schedule 3 to the Companies (Amendment) Ordinance 2004.

The schedule contains a number of amendments to the Companies Ordinance aiming to enhance shareholder remedies.

The major amendments relate to statutory derivative action, unfair prejudice remedies, orders for inspection of company records, and injunction orders.

Changes enhance corporate governance regime

The amendments will also empower the court to award damages to the members of a company where it is found that their interests have been unfairly prejudiced.

With the implementation of amendments on shareholder remedies, such as statutory derivative action, Hong Kong's corporate governance regime will be further enhanced, the Financial Services & the Treasury Bureau said.

Such moves will improve Hong Kong's market quality and attractiveness to local and international investors, the bureau added.

To enable the schedule to commence, two pieces of technical subsidiary legislation - the Rules of the High Court (Amendment) Rules 2005 and the Companies (Amendment) Ordinance 2004 (Amendment of Schedule 3) Notice 2005 - are gazetted today and will be tabled before the Legislative Council on May 18. 

Technical subsidiary laws modified

The amendment rules aim to put beyond doubt that an application for leave to dispense with the service of a written notice relating to a statutory derivative action may be made by ex parte originating summons.

The amendment notice modifies the new definition of "specified corporation" to cater for the order in which the schedules to the amendment ordinance will respectively commence.

The amendment ordinance, enacted in July, 2004, contains a number of legislative amendments. Other than the enhancement of shareholders' remedies, it also improves the prospectus regime and the registration requirements for overseas companies.