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17 Hong Kong L.J. 24 (1987)
Hong Kong Code on Takeovers and Mergers: - Toothless Watchdog of Handmaiden of Equality

handle is hein.journals/honkon17 and id is 44 raw text is: Hong Kong Code on Takeovers and Mergers:- Toothless Watchdog or Handmaiden of Equality? Alan Au* I INTRODUCTION IN THE area of company law and securities regulation, the Hong Kong Code on Takeovers and Mergers can be regarded as having acquired an alien and pioneering status.' It is, first of all, a voluntary code without the force of law. More important, it leads us beyond the disclosure philosophy2 which forms the guiding principle for company law legislation3 and introduces the novel idea that all shareholders should be treated alike on the transfer of control in a company.4 This principle of equal treatment, combined with the disclosure principle and the principle of shareholder decision-making, are three constituent themes running through the code and form the framework of shareholder protection in take-overs. The first edition of the code was drawn up in 1975,6 followed by a second edition in 1978.7 The present (third) edition was published in October 1981 with amendments issued in 1983. The * BA (Columb), BA (Oxon); Solicitor of England and Wales. The author is grateful to Mr Carson Wen for his assistance and encouragement; and to Mr Peter Lee, Deputy Director of the London take-over panel, and Mr Dan Prentice, Fellow of Pembroke College, Oxford, for their invaluable comments on an earlier draft of this paper. 'In this article, 'the code' and 'the Hong Kong code' refer to the Hong Kong Code on Takeovers and Mergers; 'the City code' refers to the (London) City Code on Takeovers and Mergers; 'the committee' refers to the body responsible for administering the Hong Kong code; 'the London panel' refers to the body responsible for administering the City code; 'the chairman' refers to the chairman of the committee; 'release' refers to release of the committee; 'panel statement' refers to releases of the London panel; and 'rules,' 'general principles' and 'practice notes' refer to rules, general principles and practice notes of the Hong Kong code, except where stated otherwise. 2See Note, 'Disclosure as a Legislative Device' (1963) 76 Harv L Rev 1279; see also Sealy, 'The Disclosure Philosophy and Company Law Reform' (1981) 2 Co Lawyer 51. 3 Companies Ordinance (cap 32, LHK 1984 ed). 4 See generally Andrews, 'The Stockholder's Right to Equal Opportunity in the Sale of Shares' (1964-65) 78 Harv L Rev 505. 5 See Davies The Regulation of Take-overs and Mergers (London: Sweet & Maxwell, 1976) 59-60; Blank, 'Defences to Take-overs: The United Kingdom' (1979) 7 Int Bus Lawyer, 287, 288. 6 The first edition comprised 9 general principles and 28 rules. 7 The second edition comprised 10 general principles and 34 rules.

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