Cap 346 s 6 Power to control and wind up certain businesses (TRADING WITH THE ENEMY ORDINANCE)

Contents of Section

Chapter:	346	Title:	TRADING WITH THE ENEMY ORDINANCE	Gazette Number:	71 of 1999
Section:	6	Heading:	Power to control and wind up certain businesses	Version Date:	01/07/1997

Remarks:

Adaptation amendments retroactively made - see 71 of 1999 s. 3

(1) Where any business is being carried on in Hong Kong by, or on behalf of, or under the direction of, persons all or any of whom are enemies or enemy subjects or appear to the Chief Executive to be associated with enemies, the Chief Executive may, if he thinks it expedient so to do, make-

(a) a restriction order prohibiting the carrying on of the business either absolutely or except for such purposes and subject to such conditions as may be specified in the order; or

(b) a winding-up order requiring the business to be wound up,

and the making of a restriction order as respects any business shall not prejudice the power of the Chief Executive, if he thinks it expedient so to do, at any subsequent date to make a winding-up order in respect of that business.
(2) Where an order under subsection (1) is made in respect of any business, the Chief Executive, by that order or by a subsequent order, may appoint a controller to control and supervise the carrying out of the order, and, in the case of a winding-up order, to conduct the winding-up of the business, and may confer on the controller any such powers in relation to the business as are exercisable by a liquidator, in the voluntary winding-up of a company, in relation to the company, including power in the name of the person carrying on the business or in his own name, and by deed or otherwise, to convey or transfer any property and power to apply to the Court to determine any question arising in the carrying out of the order, and may by the order confer on the controller such powers as the Chief Executive thinks necessary or convenient for the purpose of giving full effect to the order.
(3) Where a restriction order or a winding-up order is made in respect of any business, the distribution of any assets of the business which are distributed while the order is in force shall be subject to the same rules as to preferential payment as are applicable to the distribution of the assets of a company which is being wound up, and the said assets of the business shall, so far as they are available for discharging unsecured debts, be applied in discharging unsecured debts due to creditors of the business who are not enemies in priority to unsecured debts due to any other creditors, and any balance, after providing for the discharge of all liabilities of the business, shall be distributed among the persons interested in the business in such manner as the Chief Executive may direct:
Provided that the provisions of this subsection shall, in their application to the distribution of any money or other property which would, in accordance with those provisions, fall to be paid or transferred to an enemy, whether as a creditor or otherwise, have effect subject to the provisions of section 10 and of any order made under that section.
(4) Where any business in respect of which a controller has been appointed under this section has assets in enemy territory, the controller, if in his opinion it is practicable so to do, shall cause an estimate to be prepared-

(a) of the value of those assets;

(b) of the amount of any liabilities of the business to creditors, whether secured or unsecured, who are enemies;

(c) of the amount of the claims of persons who are enemies to participate, otherwise than as creditors of the business, in any distribution of assets of the business made while an order under subsection (1) is in force in respect of the business,

and, where such an estimate is made, the said liabilities and claims shall, for the purposes of this section, be deemed to have been satisfied out of the said assets of the business in enemy territory, or to have been satisfied thereout so far as those assets will go, and only the balance, if any, shall rank for satisfaction out of the other assets of the business.
(5) Where an estimate has been prepared under subsection (4), a certificate of the controller as to the value or amount of any assets, claims or liabilities to which the estimate relates shall be conclusive for the purpose of determining the amount of the assets of the business available for discharging the other liabilities of the business and for distribution amongst other persons claiming to be interested in the business:
Provided that nothing in this subsection shall affect the rights of creditors of, and other persons interested in, the business against the assets of the business in enemy territory.
(6) The Chief Executive, on an application made by the controller appointed under this section and after considering the application and any objections which may be made by any person who appears to him to be interested, may by order grant to the controller a release, and an order of the Chief Executive under this subsection shall discharge the controller from all liability in respect of any act done or default made by him in the exercise and performance of his powers and duties as controller:
Provided that any such order may be revoked by the Chief Executive on proof that it was obtained by fraud or by suppression or concealment of any material fact.
(7) Any person who contravenes, or fails to comply with, the provisions of any order made under subsection (1) shall be guilty of an offence of trading with the enemy.
(8) Where an order under subsection (1) has been made in respect of a business carried on by an individual or by a company, no bankruptcy petition or petition for sequestration or summary sequestration against the individual, or petition for the winding-up of the company, shall be presented, or resolution for the winding-up of the company passed, or steps for the enforcement of the rights of any creditors of the individual or of the company shall be taken without the consent of the Chief Executive, but where the business is carried on by a company the controller may present a petition for the winding-up of the company by the Court, and the making of an order under this section shall be a ground on which the company may be wound up by the Court.
(9) Where an order is made under this section appointing a controller for any business, any remuneration of, and any costs, charges and expenses incurred by, the controller, and any other costs, charges and expenses incurred in connection with the control and supervision of the carrying out of the order, to such amount as may be certified by the Chief Executive, shall be defrayed out of the assets of the business, and, as from the date of the certificate, shall be charged on those assets in priority to any other charges thereon.

(Amended 71 of 1999 s. 3)
[cf. 1939 c. 89 s. 3A U.K.]