The Financial Services & the Treasury Bureau has proposed retaining the headcount test used in company privatisation or restructuring plans, for approving a scheme of arrangement under section 166 of the Companies Ordinance.

Releasing the consultation conclusions of the first phase consultation on the Draft Companies Bill today, the bureau said there are merits in retaining the headcount test as it can protect minority shareholders' and small creditors' interests.

Nevertheless, it proposed to give the court discretion to dispense with the test for members' schemes in special circumstances, such as where there is evidence that parties opposing the scheme have unfairly influenced the vote result by share splitting.

Directors' information

Another recommendation is to restrict the access to directors' residential addresses and the full identification numbers of directors and company secretaries kept at the Companies Registry's public register. 

To strike a balance between protecting privacy and access to such information on bona fide grounds, certain organisations or people, including public authorities, specified regulators, liquidators and provisional liquidators, as well as those who have obtained a court order, can access the residential addresses and full identification numbers.

Other recommendations include subjecting private companies which are subsidiaries of a listed or public company to more stringent regulations similar to public companies for the purposes of the provisions on fair dealings by directors, and retaining the existing right for shareholders to take common law derivative action.

The second phase consultation was completed on August 6. The bureau will revise the bill incorporating the proposals and other comments received in both phases. It plans to introduce the Companies Bill into the Legislative Council as soon as possible.