Standard Codes


EXPLANATORY NOTES TO DI NOTICES

FORM 3B  – DIRECTOR’S/CHIEF EXECUTIVE’S NOTICE

 

NOTIFICATION OF  INTERESTS IN SHARES OF AN ASSOCIATED CORPORATION

OF A LISTED  CORPORATION

 

 

General Notes

 

 

1.                    These Explanatory Notes explain the entries that can be seen on a search report that shows a DI notice “Form 3B – Director’s/Chief Executive’s Notice”.  Form 3B is for use by a director or chief executive disclosing an interest in shares of an associated corporation of a Hong Kong listed corporation of which he/she is a director or chief executive under Part XV of the Securities and Futures Ordinance (Cap.571)(“the Ordinance”).  For ease of reference in these explanatory notes we will refer simply to director and not “director/chief executive”. The director must file the notice with The Stock Exchange of Hong Kong Limited (“SEHK”) and the listed corporation concerned at the same time or one immediately after the other. 

 

2.                    A series of numbers and titles appears on the screen starting with “1. Name of listed corporation”. The numbers correspond to the numbers on the boxes of Form 3B and the titles are the descriptions of the boxes on Form 3B. The information opposite the titles, or shown in the boxes on the search report, is the information that has been entered by the director on the Form. The information on the form is not checked before being entered on the database and if incorrect information is disclosed by the director then the same information will be reproduced in the search result, uncorrected.

 

3.                    Directorss are only required to complete boxes that apply to them so you may find several numbers/boxes are blank. In addition, boxes 12, 16, 17 and part of box 24 (the address of a spouse or minor child that has an interest or a short position in shares of the same listed corporation) contain personal data that cannot be viewed by the public. Unless a director has disclosed that he has a short position the rows on Form 3B entitled “short position” are also not shown on the search report. You can download a blank copy of Form 3B and the detailed Notes giving directions and instructions on completing the Form by visiting the HKEx web-site at  https://sdinotice.hkex.com.hk

 

4.                    Each Form 3B should have been completed in accordance with the directions and instructions in the Notes to the form. These explanatory notes mirror the directions and instructions in the Notes to Form 3B. The information on the form can also be viewed by inspecting the register of Register of Register of Directors’ and Chief Executives’ Interests Short Positions maintained by the listed corporation concerned. 

 

 

Meaning of  “shares” and  “associated corporation” in Form 3B and these Notes.

 

5.                    In Form 3B and these Notes the term “shares” describes interests in the shares of an associated corporation of the listed corporation of which the person who reported the interest is a director or a chief executive.

 

6.                    An “associated corporation” is –

 

(i)                   a subsidiary, or holding company, of the listed corporation;

(ii)                 a subsidiary of the listed corporation’s holding company (e.g. a fellow subsidiary); or

(iii)                a corporation in which the listed corporation holds 20% or more of the issued shares of any class of its share capital.

 

“Relevant event”

 

7.                    A director must give notification of interests in shares of an associated corporation of a listed corporation, and any “short position” (explained in Note 14 below) on the occurrence of certain events - called “relevant events” (see s. 308 of the Ordinance). If he is a director or chief executive of a listed corporation relevant events include :

 

(i)                   When he becomes interested in the shares of the any associated corporation of the listed corporation.

(ii)                 When he ceases to be interested in such shares.

(iii)                When he enters into a contract to sell any such shares.

(iv)               When an associated corporation grants him a right to subscribe for shares in the associated corporation, or he exercises or assigns such rights.

(v)                 When the nature of his interest in such shares changes ( e.g. on exercise of an option).

(vi)               When he comes to have, or ceases to have, a short position in the shares of  an associated corporation.

(vii)              If he has an interest, or if he has a short position, in shares of an associated corporation of a listed corporation at a time when the listed corporation becomes a listed corporation.

(viii)            On commencement of the Ordinance, if he has an interest, or if he has a short position, in shares of an associated corporation, which has not previously been disclosed.

(ix)                If he has an interest, or if he has a short position, in shares of an associated corporation when he becomes he or chief executive of a listed corporation.

(x)                  If he has an interest, or if he has a short position, in shares of an associated corporation when it becomes an associated corporation.

 

A notification of relevant events (vii) to (x) is described in Form 3B and these Notes as an “Initial Notification”.

 

Timing of notification

 

8.                    In the case of events (i) to (vi) in Note 5, a director must give the notification within 3 business days of the day he becames aware of the relevant event. The term “business day” means a day other than a public holiday and a day on which a black rainstorm warning, or a gale warning, is in force i.e. it would normally include Saturdays but not Sundays. The period is calculated excluding the day that the relevant event occurred.

 

9.                    For an Initial Notification, a director must normally give the notification on Form 3B within 10 business days after the relevant event.  However, if at that date he was not aware that he had an interest, or a short position, then he must give the notification within 10 business days of the day he became aware that he had such an interest.

 

The period allowed for filing a notice runs from the time the director knows of the facts that constitute the event (e.g. the purchase of the shares or the delivery of the shares), not the day that he realizes that the event gave rise to a duty of disclosure under Part XV.

 

Working out the percentage level of his interest

 

10.                 In Boxes 21 to 22 of Form 3B he is asked to state the percentage level of his interest in shares of the associated corporation. To work this out you express the total number of shares in which he is interested as a percentage of the number of shares of the associated corporation in issue (i.e. the number in Box 7). Round this figure to two decimal places.

 

11.                 In calculating the total number of shares in which he is interested he must include all joint interests (see Note to Box 27 below) interests through derivatives (see Note 12 below) and any interests, and derivative interests, in shares of the same listed corporation ( or the same associated corporation) that any of the following persons and trusts have :

 

(i)                   His spouse and any child of his under the age of 18 (see notes to Box 25);

(ii)                 A corporation which he controls (i.e. . a corporation is a “controlled corporation” if he control one-third or more of the voting power at general meetings of the corporation, or if the corporation or its directors are accustomed to act in accordance with his directions) (see notes to Box 26);

(iii)                A trust, if he is a trustee of the trust (other than a trust where he is a bare trustee i.e. where he has no powers or duties except to transfer the shares according to the directions of the beneficial owner) (see notes to Box 28);

(iv)               A discretionary trust, if he is the “founder” of the trust (e.g. he had the trust set up or put assets into it and can influence how the trustee exercises his discretion (see notes to Box 28);

(v)                 A trust of which he is a beneficiary.

 

12.                 A director must also count as his short position any short positions that the persons and trusts mentioned in Note 11 have.  This may create a short position (if he does not have a short position already) or increases the size of his short position.

 

13.                 In calculating the level of his interest in shares a director must add together both direct and indirect interests. He must not net off long positions and short positions but must disclose these separately.  Indirect interests include interests in shares underlying “equity derivatives”. Equity derivatives include instruments such as options, warrants, stock futures and are referred to in these notes as “derivatives”. “Underlying shares” are the shares that may be required to be delivered to a person, or by a person, under the derivatives, and include the shares used to determine the price or value of the derivatives (e.g. In the case of an issue of “European Style Cash Settled Call Warrants 2001 - 2002 relating to ordinary shares of HK$10.00 each in XYZ Ltd. issued by ABC Investment Bank” the “underlying shares” are ordinary shares of HK$10.00 each in XYZ Ltd.).

 

“Long positions” and “short positions”

 

14.                 A director has a “long position” if he has an interest in shares, including interests through holding, writing or issuing derivatives under which, for example:

 

(i)                   he has a right to take the underlying shares;

(ii)                 he is under an obligation to take the underlying shares;

(iii)                he has a right to receive money if the price of the underlying shares increases; or

(iv)               he has a right to avoid or reduce a loss if the price of the underlying shares increases.

 

15.                 A director has a “short position” if he borrows shares under a securities borrowing and lending agreement, or if he holds, writes or issues financial instruments (including derivatives) under which, for example :

 

(i)                   he has a right to require another person to take the underlying shares;

(ii)                 he is under an obligation to deliver the underlying shares;

(iii)                he has a right to receive money if the price of the underlying shares declines; or

(iv)               he has a right to avoid a loss if the price of the underlying shares declines.

 

16.                 The number of shares in which a director is taken to be interested, or to have a short position, through derivatives is :

 

(i)                   the number of shares which are required to be delivered to him, or by him, under the derivatives;

(ii)                 the number of shares by reference to which the amount payable under the derivatives is derived or determined; or

(iii)                (in the case of stock futures contracts) the contract multiplier times the number of contracts he holds. 

If any party to a derivative can choose whether to settle in cash or by delivery then use (i) to work out the number of shares in which he is interested. If it is not possible to determine the number of shares in which a substantial shareholder is taken to be interested (or have a short position) at the date when he first acquires an interest in the underlying shares through an equity derivative then he need not file a notice. However, he should file a notice when he first becomes aware of the number of shares that will be delivered to him/will be required to be delivered by him. For example, if the number of shares that he will receive under an equity derivative is determined by the price of the shares on a given date in the future (and there is no minimum or maximum number that he is bound to get) then no duty of disclosure arises on entering into the derivative. Once the number of shares that he will receive is known a duty of disclosure arises.

 

 

17.                 Directors are asked not to send copies of any purchase agreements and other documents to SEHK or the listed corporation concerned when filing this Form 3B.  Attaching a document that explains the transaction in question does not discharge the duty to complete the prescribed form. Copies of any documents that are sent to SEHK are maintained in a register and are available for inspection by the public. To inspect these documents please contact SEHK.

 

18.           The “Outline of Part XV” (“Outline”) published by the Securities and Futures Commission (“SFC”) gives further guidance on the situations in which a notice has to be filed under Part XV. A copy of the Outline can be downloaded from the SFC’s web site http://www.hksfc.org.hk.

 

 

 

Specific Notes

 

 

If a director is giving notification that he has ceased to have a notifiable interest then he need only complete Boxes 1 to 22 and 29  of Form 3B.  In the case of other events he should have completed all boxes that apply to him.  If there are some boxes in the Form that do not apply to a director he is instructed that these should be either left blank or he should insert “NIL”.

 

Information relating to the listed corporation

 

Box 1      This is the name of the listed corporation of which he is a director or chief executive.

 

Box 2      This is the stock code of the listed corporation in whose shares he is interested.

 

Information relating to an associated corporation of the listed corporation

 

Boxes 3 to 10. A director is instructed to state the details of the associated corporation as indicated.

 

Box 6      A few corporations have two classes of share capital, each with voting rights (e.g. “A” and “B” shares).  A director is instructed to state the class of shares in which he is interested.  If he has an interest in two classes of shares he should have completed a separate notice for each class of shares.

 

Box 7      He should have stated the number of shares (in the class of shares in which he is interested) which have been issued at the date of the relevant event.  If the number of shares in issue is greater immediately after the relevant event than it was immediately before that event then he should have stated the higher figure.

Box 8      Boxes 8 and 9 contain non public data.

 

Box 10    If the associated corporation is a listed corporation a director is instructed to state the name of the exchange on which it is listed and if the associated corporation is listed on several exchanges, give the primary listing.

 

Information relating to the director or chief executive

 

Boxes 11 to 17. A director is instructed to state the details as indicated. He should have stated his name in full as it appears on his Hong Kong identity card.  If he has no Hong Kong identity card he should have stated his name in full as it appears on his passport, with his surname first.  For example, a director whose name appears on his HKID Card as “ Wong Ging Teng Anthony” would complete Box 11 as follows :

               

11.  Name of director (English) as printed on HKID/Passport

Wong

Ging Teng Anthony

(Surname)

 (Other names)

 

                Whereas a director who has no HKID Card and whose name appears in his passport as “Anthony James Hay Wood” would complete Box 11 as follows :

 

11.  Name of director (English) as printed on HKID/Passport

Wood

Anthony James Hay

(Surname)

(Other names)

 

A director need not fill in Boxes 14 and 15 if he does not have a Chinese name. Equally he need not fill in Box 11 if he does not have an English name. Box 17 is optional.  The data entered in Boxes 12, 16 and 17 is not available for viewing by the public when searching the DI pages of the HKEx web-site. 

 

Information relating to the relevant event

 

Box 18    A director is instructed to state the date of the relevant event (explained in Note 5) which gave rise to the Notice. 

 

Box 19    In the case of events (i) to (vi) in Note 5, if a director became aware of the relevant event on a date later than the date that it occurred, then he should have put the date that he became aware of the  event that triggers the reporting obligation in Box 19.

 

For an Initial Notification, if he were not aware that he had an interest, or a short position, at the date of the relevant event then the director should have put the date that he became aware that he had such an interest in the shares of the associated corporation in Box 19.

 

Box 20    Box 20 asks for details of the relevant event. This is the event that triggers the Notice. In the case of relevant events (i) to (vi) in Note 5 the details that the director should have given in Box 20 relate to the shares bought/sold or involved at that time – not the shares which he already has.

 

In the case of an Initial Notification the details that he must give relate to the shares bought by the director in the 4 months immediately before the date of the relevant event.

 

In Box 20 column 2 the director is instructed to enter the Code from Table 1 below which best describes the relevant event. You will see from Note 9 above that if a person connected with the director acquires an interest in shares their interest will be treated as his interest.  For example, if a company that he controls acquires shares of the listed corporation he should treat the acquisition as his acquisition and use the appropriate code – in this case 140. 

 

A director is instructed to use the row entitled “Short position” in Box 20 if he is filing the notice because of a change in a short position. The normal position is that either a long position or a short position will give rise to a duty of disclosure (not both simultaneously). However if the transaction creates both a long and a short position simultaneously (such as borrowing shares which gives rise to both a long and a short position) then he can complete both rows.  

 

 

 

Table 1 – Event or change

 

Code

LONG POSITIONS

 

Acquiring an interest

 

Becoming interested in shares of the associated corporation.  This includes all acquisitions whether by purchase or gift, or by rights/bonus issue or taking a security interest in shares

141

Ceasing to have an  interest

 

Ceasing to have an interest in shares of the associated corporation

142

 Changes in nature of an interest

 

Entering into a contract to sell shares of the associated corporation

143

 

 

Exercising a right or an option in respect of shares of the associated corporation

144

Lending of shares of the associated corporation under a securities borrowing and lending agreement

145

Return of shares of the associated corporation lent under a securities borrowing and lending agreement

146

Other events

 

Granting by the associated corporation of a right to subscribe for shares in that associated corporation, the exercise of such a right and the assignment of such a right

147

On listing of the listed corporation of which he is a director or chief executive if he has an interest in shares of the associated corporation

148

On commencement of the Ordinance if he has an interest in shares of the associated corporation

149

On becoming a director or chief executive of the listed corporation if he has an interest in shares of the associated corporation

150

On a corporation becoming an associated corporation if he has an interest in shares of the associated corporation

151

SHORT POSITIONS

 

Coming to have a short position in shares of the associated corporation.  This includes a short position through holding derivatives and borrowing shares under a securities borrowing and lending agreement

152

Ceasing to have a short position in shares of the associated corporation

153

On listing of the corporation if he has a short position in shares of the associated corporation

154

On commencement of the Ordinance if he has a short position in the shares of the associated corporation

155

On becoming a director or chief executive if he has a short position in shares of the associated corporation

156

MISCELLANEOUS(long and short positions)

 

Other (This covers any notifiable event not mentioned above)

157

 

A director is instructed to select from Table 2 below the Code which best describes the capacity or nature of his interest and enter the Code in Box 20 column 3 and/or 4. If he has disposed of an interest in shares he should choose the Code describing the capacity in which he held the shares immediately before he disposed of them and enter this Code in Box 20 column 3. If he has acquired an interest in shares he should have chosen the Code describing the capacity in which he held the shares immediately after he acquired them and entered this Code in Box 20 column 4. If he was giving notice of a change in the nature of his interest in shares, he should have completed the Codes describing the capacity in which he held his interest in those shares before and after the relevant event i.e he should have completed both columns 3 and 4.  If he is the beneficial owner but another Code also applies, he should have used the latter Code rather than Code 201.

 

A director is instructed to use the row entitled “short position” if he is filing the notice because of a change in a short position.

 

Table 2 – Capacity

 

Code

Beneficial owner

201

Person having a security interest in shares

203

Interests by attribution

 

Interest of his child under 18 or spouse

204

Interest of corporation controlled by the director

205

Trusts and similar interests

 

Nominee for another person (other than a bare trustee)

206

Trustee (other than a bare trustee)

207

Custodian 

208

Founder of a discretionary trust (see General Note 11(iv))

209

Beneficiary of a trust

210

Miscellaneous

 

Interest held jointly with another person

213

Other 

214

 

In Box 20 column 5 a director is instructed to state the number of shares concerned (e.g. the number of shares the director bought that triggered the Notice). For a change in the nature of an interest (e.g. on exercise of an option) he should have stated the number of shares affected by the change.

 

In Box 20 column 6 he should have chosen the currency in which the price for the interest in shares described in column 5 was paid or received. 

 

Lastly, he should have stated the consideration per share paid or received (for the interest in shares described in column 5) in columns 7/8 or 9/10 of Box 20 under “On Exchange” or “Off Exchange” as appropriate. In column 7 the director should have stated the highest price per share whilst in columns 8 and 9 he  should state the average price/consideration per share.  An acquisition or disposal is made “On-Exchange” when the transaction took place in the ordinary course of trading on a recognized exchange and “Off-Exchange” covers all other transactions. If no price or consideration has been paid or received, or if the consideration is services provided,  the price or consideration should have been stated as “0”. Codes describing the principal types of consideration for Off-Exchange transactions are set out in Table 3 below. Using Table 3 the director is instructed to select the Code that best describes the nature of the consideration he paid or received and enter it in Box 20 column 10.

 

In the case of an Initial Notification the details that must be given in column 8 or 9 of the average prices/consideration paid for the interest in shares described in column 5 relate to the average prices/consideration paid by the director  in the 4 months immediately before the relevant date. Similarly the nature of the consideration given in column 10 relates to the nature of the consideration paid by him in the 4 months immediately before the relevant date. If the transaction that prompts disclosure is a change in the nature of his interest in shares (e.g. a securities borrowing and lending transaction), a transaction in derivatives, or a change in a short position, the highest price per share and the average price per share (average amount and nature of the consideration for off-exchange trades) should have been left blank.

 

 

 

 

 

 

 

Table 3 - Nature of consideration

Code

Nature of consideration

 

Code

Cash

301

Surrender of rights to shares

303

Assets other than cash

302

Services

304

               

Examples for completing Box 20

 

The first example shows how Box 20 should be completed for relevant events (i) to (vi) in Note 5.  Assume that the person completing the form is a director of a listed corporation who already owns 4,500,000 shares in an associated corporation of the listed corporation. On 31st December 2003 he purchased (off-Exchange) 400,000 shares for HK$800,000 and 100,000 shares for HK$210,000 (all shares to be held beneficially).  The relevant date to be inserted in Box 18 would be “31.12.2003” and he should complete Box 20 in the following manner. 

 

20. Details of relevant event

 

 

Relevant event  code describing circumstances ( see Table 1)

Code describing capacity in which shares were held (see Table 2)

Number of shares bought/ sold or involved

Currency

On Exchange

Off Exchange

Before relevant event

After relevant event

Highest price per share

Average price per share

Average consideration per share

Consideration Code

(see Table 3)

Long position

101

 

201

500,000

HKD

0

0

2.02

301

Short position

 

 

 

 

 

 

 

 

 

 

 

The second example shows how Box 20 should be completed in the case of an Initial Notification.  Assume that the person completing the form is a shareholder who, prior to 1st September 2003 owns 4,500,000 shares in an associated corporation of the listed corporation. On 31st December 2003 he is appointed a director of the listed corporation.  On 15th September 2003 he had purchased (Off-Exchange) 400,000 shares in the associated corporation for HK$800,000 and 100,000 shares for HK$210,000 (all shares held as trustee).  The relevant date to be inserted in Box 18 would be “31.12.2003” and he should complete Box 20 in the following manner.

 

20. Details of relevant event

 

 

Relevant event  code describing circumstances ( see Table 1)

Code describing capacity in which shares were held (see Table 2)

Number of shares bought/ sold or involved

Currency

On Exchange

Off Exchange

Before relevant event

After relevant event

Highest price per share

Average price per share

Average consideration per share

Consideration Code

(see Table 3)

Long position

110

 

207

500,000

HKD

0

0

2.02

301

Short position

 

 

 

 

 

 

 

 

 

 

Box 21    In Box 21 column 2 the director should have stated the total number of shares in the associated corporation concerned in which he was interested, and those in which he had a short position, immediately before the relevant event.  This figure includes all joint interests, interests through equity derivatives and deemed interests (see note 9). In column 3 he should have stated the percentage figure of his interest immediately before the relevant event. Note 8 explains how to calculate the percentage figure.

 

Box 22    Complete Box 22 in the same manner as Box 21 specifying the number of shares in the associated corporation concerned in which he was interested, and those in which he had a short position immediately after the date of the relevant event. This figure includes all joint interests, interests through equity derivatives and deemed interests (see note 9).

 

Capacity in which interests in Box 22 are held – required for Initial Notification only

 

Box 23    If the notification is an Initial Notification  a director is instructed to complete Box 23.  He should have selected from table 2 the Code which best describes the capacity in which he held the shares listed in Box 22 and entered that Code in Box 23 column 1.  If he held some of his interests in one capacity (e.g. as beneficial owner), and other interests in another capacity (e.g. as trustee) then he should have used two Codes (on different rows) and stated the number of the interests in shares held in each capacity (on different rows) in column 2.     

 

If he also has a short position he should have stated the capacity or capacities in which he held that short position, using the appropriate Code(s), in column 3.

 

Derivative interests

 

Box 24    If this is an Initial Notification, he should have given details in relation to all the shares in which he is interested through derivatives.

 

                If this is not an Initial Notification, he should only have given details in relation to the shares involved in the relevant event.

 

                In either case, he should have selected from Table 4 the code which best describes those derivatives and entered it in Box 24 column 2.

 

Table 4 – Category of derivatives

Code

Category of derivatives

 

Code

Derivatives listed or traded on a Stock Exchange or traded on a Futures Exchange

 

Unlisted derivatives

 

Physically settled options

405

Physically settled options

409

Cash settled options

406

Cash settled options

410

Cash settled futures

407

Other

411

Other

408

 

 

 

If any party to a derivative can choose whether to settle in cash or by delivery then he should treat that derivative as physically settled.

 

If he has an option,  he should have stated the first date that the option can be exercised in Box 24 column 3 and the last date on which any option can be exercised in column 4. If he has another type of derivative he should have stated the maturity date in column 4.

 

A director should have stated the number of shares in which he derived an interest (or a short position) from the derivatives in column 11.  Note 13 explains how this is worked out. If he had more than one derivative of the same category, he should have added them together and stated the total number (in one row) in column 11.  If he had more than one derivative but they are in different categories use 2 or more codes (on different rows) and he should have stated the number of shares for each category of derivative (on different rows) in column 11.

 

Derivatives granted by the associated corporation

 

If the derivatives have been granted to the director by the associated corporation then he must give details of those equity derivatives on a separate row in Box 24 if the relevant event was :

 

(i)                   the grant of derivatives or rights under the derivatives - when he should state the price per share paid or received, or the consideration per share given or received, for the grant of the derivatives or rights under the derivatives in column 6. 

(ii)                 the exercise of rights under the derivatives - when he should state the price per share paid or received, or the consideration per share given or received, on the exercise of rights under the derivatives in column 8.

(iii)                the assignment of the derivatives or of rights under the derivatives - when he should state the price per share paid or received, or the consideration per share given or received, on the assignment of the derivatives or rights under the derivatives in column 10. 

 

If no price was paid or received, and no consideration given or received, then he should insert the figure “0” in the column which applies to him. 

 

                In columns 5, 7, 9 a director is instructed to choose the currency in which the price for the derivatives and the exercise price and (if applicable) the price on assignment is, or was, payable. 

 

If the derivatives were granted to any of the persons mentioned in Note 9 by the associated corporation, and the relevant event is the grant, the exercise of rights under or the assignment of those derivatives then he should have given the details mentioned in the preceding paragraph.

 

Interests of children under 18 and/or spouse

 

Box 25    If the director’s spouse (or child under 18) is interested in shares in the same listed corporation then his spouse’s interest/his child’s interest is taken to be his interest. Details of that interest should also have been taken into account in completing Boxes 21 and 22.

 

                If this is an Initial Notification, the director should have completed Box 25 if his spouse/child has shares in the associated corporation.  He should also have stated the name and address of the spouse (or child under 18), his/her address and the number of shares in which he is interested through his spouse (or child under 18) in Box 25. 

 

                If this is not an Initial Notification, he must only give details if his spouse (or child under 18) was interested in the shares involved in the relevant event. He should have stated the name and address of the spouse (or child under 18), his/her address and the number of shares involved in the relevant event in which he/she was interested.

 

                If his family member has a short position then the same principles apply.

 

                The data entered in column 2 of Box 25 (the address of children and/or spouse) is not be available for viewing by the public when searching the DI pages of the HKEx web-site. 

 

Interests held by a corporation that the director controls

 

Box 26    If the director is (a) entitled to exercise, or control the exercise of, one-third or more of the voting power at general meetings of a corporation, or (b) a corporation or its directors are accustomed to act in accordance with his directions, and that corporation is interested in shares of the associated corporation concerned then the corporation’s interest will be taken to be his interest. Details of that interest must also be taken into account in completing Boxes 21 and 22. 

 

If this is an Initial Notification, he must complete Box 26 if a corporation that he controls (referred to in these notes as a “controlled corporation”) has shares in the associated corporation..  If there is more than one corporation then details of each corporation must be stated separately.

 

                If this is not an Initial Notification, he must only give details if a corporation that he controls was interested in the shares involved in the relevant event. A director is instructed to state the name and address of the corporation that he controls and the number of shares involved in the relevant event in which it was interested.

 

                If the corporation that he controls has a short position then the same principles apply.

 

The director is instructed to complete Box 26 as follows -

 

Column 1 :  State the name of the controlled corporation starting with the top controlled corporation in the group (if you control more than one corporation).

Column 2 :  State the address and place of incorporation (in brackets) of the controlled corporation.

Column 3 :  If you control the controlled corporation state his name in column 3.  If another corporation named in column 1 of Box 26 controls the controlled corporation then state that corporation’s name in column 3. (The substantial shareholder’s name will normally appear in the first row of column 3. The controlled corporation named in the first row of column 1 normally appears in the second row of column 3 and so on). 

Column 4 : State the percentage of the shares in the controlled corporation that the person named in column 3 of the same row controls.

Column 5 : If the controlled corporation holds the interest in shares of the listed corporation directly (as opposed to the interest being a deemed interest) please place a ”Y” in column 5, if the interest is a deemed interest place a “N” in column 5. If the controlled corporation holds some shares of the listed corporation directly, and some shares indirectly, details of the interest held directly should be given in one row of Box 26 and the shares held indirectly (the deemed interest) should be given in the following row .

Columns 6 and 7 :  State the number of shares of the listed corporation in which the controlled corporation is interested (has a short position). 

 

Example of how Box 26 should have been completed. 

 

Assume that Mr. Wong Ging Teng, is appointed as a director of XYZ Ltd. (a listed corporation).  Mr Wong owns 100% of the shares in a private corporation ABC (Hong Kong) Ltd. which owns 51% of the shares in DEF (Hong Kong) Ltd. which owns 35% of GHI (Hong Kong) Ltd. and 65% of Wong Industries Ltd. Wong Industries Ltd. in turn owns 100% of the shares in Wong Asset Management Ltd. The group holdings in XYZ Ltd. are as follows GHI (Hong Kong) Ltd. owns 25,000,000 shares and has a short position in 10,000,000 shares. Wong Industries Ltd. owns 10,000,000 shares and Wong Asset Management Ltd. owns 15,000,000 shares.

 

XYZ Ltd. owns 6,000 shares in a private company, XYZ.Com Ltd. that has an issued share capital of 10,000 shares  i.e. it owns 60% of the issued shares making XYZ.Com an associated corporation.  On 1st April 2002 XYZ Ltd. granted Wong Asset Management Ltd. an option to acquire from XYZ Ltd. 900 shares or 9% of the shares of XYZ.Com Ltd. in issue. The option has not yet been exercised.  Details of this option will have been disclosed in Box 24.  

 

 

 

Group structure and holdings

 

 

 

 

 

 

  Wong Geng Ting Anthony

    ( a director of XYZ Ltd. )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

100%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     ABC ( Hong Kong ) Ltd.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

51%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     DEF ( Hong Kong ) Ltd.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

35%

 

 

 

 

 

 

65%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      GHI ( Hong Kong ) Ltd.

 

 

          Wong Industries Ltd.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

25,000,000 shares

 

 

 

 

 

 

100%

 

 

 

 

(10,000,000 short position )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10,000,000 shares

 

Wong Asset Management Ltd.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

15,000,000 shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                  XYZ Ltd.

                        ( A listed corporation )

 

 

 

 

 

 

 

 

 

900 shares

(i.e. 9%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6,000 shares (i.e. 60%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                       XYZ.Com Ltd.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In this example the entries in Box 26 of this Form 3B would be as follows –

 

 

26. Further information in relation to interests of corporations controlled by director

 

Name of controlled corporation

Address and place of incorporation

Name of controlling

Shareholder

 

   %

control

Direct

Interest

(Y/N)

Number of shares

Long Positions

Short positions

ABC (Hong Kong) Ltd.

Unit 1, 26/F Wong Industrial Bldg

Chai Wan, HK (Hong Kong)

Wong Ging Teng

Anthony

100%

N

900

 

DEF (Hong Kong) Ltd.

Unit 1, 26/F Wong Industrial Bldg

Chai Wan, HK (Hong Kong)

ABC (Hong Kong) Ltd.

51%

N

900

 

Wong Industries Ltd.

Unit 1, 26/F Wong Industrial Bldg

Chai Wan, HK (Bermuda)

DEF (Hong Kong) Ltd.

65%

N

900

 

Wong Asset

Management Ltd.

Unit 1, 26/F Wong Industrial Bldg

Chai Wan, HK (British Virgin

Islands)

Wong Industries Ltd.

100%

Y

900

 

 

Note that the interests in shares of XYZ Ltd. need not be disclosed in this Form 3B and the event prompting disclosure is not an initial notification.  If the event prompting disclosure was the appointment of Mr. Wong as a director of XYZ Ltd. this would be an Initial Notification requiring disclosure of all his interests in shares of the listed corporation of which he is a director, and interests in any associated corporations. Those interests should have been disclosed separately using 2 forms - Form 3B and Form 3B.

 

 

Joint interests

 

Box 27    If the director is interested in shares of the associated corporation concerned jointly with another person then they are both taken to be interested in all of the shares held jointly. Details of that interest must also be taken into account in completing Boxes 21 and 22.

 

If this is an Initial Notification, he must complete Box 27 if he is interested in shares of the associated corporation concerned jointly with another person. State the name of the person who owns the interest in the shares jointly with the director, his/her address and the number of shares in which he/she is interested in Box 27.

 

                If this is not an Initial Notification, the director must only give details if the shares in which he is interested jointly with another person were involved in the relevant event. A director is instructed to state the name of the person who owns the interest in the shares jointly with the director, his/her address and the number of shares involved in the relevant event in which he/she was interested.

 

The same principles apply to short positions held jointly.

 

Interests of trustee or beneficiary of a trust or person who has set up a discretionary trust

 

Box 28    If the director is : (a) a trustee of a trust, (b) a beneficiary of a trust, or (c) a person who is the “founder” of a discretionary trust ( e.g. he has had a discretionary trust set up or put assets into a discretionary trust) and can influence how the trustee exercises his discretion, then he is taken to be interested in all of the shares of the listed corporation in which the trust has an interest (or a short position). Details of that interest should also have been taken into account in completing Boxes 21 and 22. He should ignore an interest in reversion or remainder, an interest of a bare trustee.

 

If this is an Initial Notification, the director must complete Box 28 if he is interested in shares of an associated corporation through a trust. He may have stated the name of the Trust which owns the interest in the shares and its address in Box 28 columns 1 and 2 but is not required to do so if he wishes these details to remain private. He should have selected from Table 5 below the Code which best describes his status in relation to the trust and entered the Code in Box 28 column 3. The director is instructed to state the number of shares in which the trust is interested (has a short position) in Box 28 column 4 (and 5) .

 

Table 5 - Status in relation to a trust

 

Code

Trustee of a trust

501

Beneficiary of a trust

502

Founder of a discretionary trust

503

 

                If this is not an Initial Notification, the director must only give details if the shares in which he is interested through a trust were the shares involved in the relevant event. He should state the name of the Trust which owns the interest in the shares, its address and the number of shares involved in the relevant event in which the trust was interested.

 

Box 29    Form 3B should have been dated the same day as it is filed with SEHK.

 

Box 30    This number relates to the number of continuation sheets the director has completed. These are already displayed automatically in the search results.

 

Box 31    The director should have stated the number of attachments filed with the form.  There should be no attachments save in exceptional circumstances.  If he is filing electronically, or if there are no attachments, the director need not complete Box 31.