External Auditor's Report on Bank of China (Hong Kong)

Commenting on the statement issued yesterday (Tuesday) by BOC Hong Kong (Holdings) Limited, a spokesperson for the Hong Kong Monetary Authority (HKMA) has today (Wednesday) confirmed that the Monetary Authority (MA), last Friday (6 June), asked Bank of China (Hong Kong) (BOCHK) to submit to him a report under section 59 of the Banking Ordinance (Cap. 155) by an external auditor on its internal control systems and other relevant matters. This report will be in addition to the HKMA's own ongoing enquiries into matters concerning BOCHK.

The MA is empowered under section 59 of the Banking Ordinance to require an authorized institution to submit a report by an external auditor on such matters as the MA may reasonably require for the exercise of his functions under the Ordinance. The auditor appointed for this purpose must be approved by the MA.

The spokesperson said that the HKMA wished to be as forthcoming as possible on the enquiries it has initiated into recent events relating to BOCHK, including the action under section 59, particularly in view of the considerable interest among members of the public. However, since investigations by other authorities were in progress, and because of the official secrecy provisions under section 120 of the Banking Ordinance, the HKMA was constrained in what it could say. The spokesperson added that, in particular, it was not possible for the HKMA to say any more on the specific details of the action under section 59 than had already been said by BOCHK.

For further enquiries, please contact:

Jasmin Fung, Manager (Press), at 2878 8246 or
Thomas Chan, Senior Manager (Press), at 2878 1480

Hong Kong Monetary Authority
11 June 2003