MeNeill to give his reasons for bring-{pg In the Finance Banking Corpors-Tu reply Mr. McNeil sala his views were based upon the views enunciated by Sir Haviland de Sausmaurez, which were to the effect that the objects of the Order were provide facilities for the registra~ tion of bona fide British companies in Shanghai, and to ensure that such companies are when registered, and that they continue, British.
He brought in the Finance Bank-Ing Corporation to. show that, the Guaranty Underwriters of China Ltd, was not a bona fide British company. The larier company held the majority of shares in the former company, which had been formed by and was entirely the property of the China Finance Corporation. And that tended to show that the whole of the Dusiness and assets of the Guaranty Underwriters of China Lid, were contiolied by the China Finance Corporation.
"These two companies he said, the Guaranty Underwriters of China Ltd, and the Finance Banking Cor-portion, were so bound up that it was impossible for him to arrive at para the crux of the matter without bring-Ing in the Finance Banking Corpor tion. The climax of the cross-examination, he said, was the sale agreements" made ' between the Guarunty Underwriters "of China Corporation. The aggregate sum paid by the China Finance Corporation in respect of the two, contracts was $420,000, which was the exact sum paid bythe China Finance Corporation for the" shares. of the Guarenty "Underwriters of China Lid, upon incorporation.
Mr. 8. A. A. Seth, director of the defending company, and also a direc or, of both the China" Finance Corporation and the Finance Banking Corporation, then entered the box to be further cross-examined by Mr, McNeill Wilness said that_upon the incorporation of the Finance Banking Corporation in 1982 the China Finance Corporation held 39,600 shares. That July 1082, 20500 shares were sold by the China Finance Corporation to he Guaranty Underwriters of China Me. an American company). Fur-her that in August 1984 the Guaranty Underwriters of China ne. sold 30,400 shares to the Guaranty Underwriters of China Ltd, (British).
Mr. Seth said he though Tls. 300,000 ($420,000) was the amount of apitol required for the British com~ pany because that was the amount paid up capital of the American Guaranty company.
Counsel: Am T not right in saying that the total sum expended by the China Finance Corporation since the incorporation of the Finance Bank-Ing Corporation is $420,000?—Yes, but It probably included 'a number of other items. The actual capital outlay was $420,000.
Counsel: Is it not correct that upon the carrying out of the agree-jum ment between the China Finance Corporation, the Guaranty Underwriters of China Ltd," and the Finance Banking Corporation, the nett result is that the China Finance Corporation receives two businesses, one insurance and the other banking without paying out any money? Yer, except that the China Finance Corporation assumes. all Uabiities. They not only take the business over but they undertake to meet all Habili-
Mr. Seth agreed to the next sugges Hon put by Mr. McNeill namely that the Articles of Association of the company, which was a private one, Jcontained restrictions on the right of transfer of shares.
Regarding the voluntary liquidation of the Guaranty Underwriters of China, Ltd, Mr. Seth said that the frst notice the Deputy Registrar of Companies would receive was when the statutory declaration of solvency was filed on May 14.
Counsel: You say you received no instruction from the China Finance Corporation with regard to the conducting of the business? T was never actually instructed with regard the business of the Guaranty Underwriters of China, Ltd.
Witness said if any instructions were to be given he would receive them from the Board of Directors. Mr. Seth said he was occupying the position of executive director of the China Finance Corporation.
Counsel: As executive director of the China Finance Corporation was your office in the China Finance Corporation's offices—I have a pri-vote partitioned room in the offices of the China Finance Corporation.
Counsel: When you sit at that desk, do you sit there as executive direc-for of the China Finafice Corporatlon?—And as managing director of the Guaranty Underwriters of China /Lta, and the Finance Banking Corporation, Ltd.
Counsel: Now, Mr. Seth, T am not attempting to attack your bona fides, but T put it to you that it is a little dimeult to believe that in the offices fof the China Finance Corporation, from which you directed the business
Text read from the printed page and cleaned; old type leaves the occasional error.