Chit-Fund Businesses (Prohibition) Ordinance


Published: 1997-06-30

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Cap 262 - CHIT-FUND BUSINESSES (PROHIBITION) ORDINANCE 1

Chapter: 262 CHIT-FUND BUSINESSES (PROHIBITION)
ORDINANCE

Gazette Number Version Date


Long title 30/06/1997


To prohibit chit-fund businesses and to make provision for other connected purposes.


[12 May 1972]

(Originally 29 of 1972)

Section: 1 Short title 30/06/1997


This Ordinance may be cited as the Chit-Fund Businesses (Prohibition) Ordinance.

Section: 2 Interpretation 30/06/1997


In this Ordinance, unless the context otherwise requires-
"chit-fund" (銀會) means a scheme or arrangement, whether known as chit-fund or "hwei" or by any other name,

whereby or as part of which the participants subscribe periodically or otherwise to a common fund and that
common fund is put up for sale or payment to the participants by auction, tender, bid, ballot or otherwise;

"operate" (經營) includes manage, form, conduct, organize, advertise and aid, assist or take part in operating.

Section: 3 Chit-fund business an offence E.R. 2 of 2014 10/04/2014


(1) Subject to section 5 and to subsection (2), any person who operates a chit-fund commits an offence and is
liable to a fine at level 4 and to imprisonment for 3 years.

(2) Notwithstanding subsection (1), if an offence is committed under this section by reason only of the breach
of one or both of paragraphs (a) and (c) of section 5(2), the offender is liable to a fine at level 1 and to imprisonment
for 1 year.

(Amended 71 of 1985 s. 2; E.R. 2 of 2014)

Section: 4 (Repealed 71 of 1985 s. 3) 30/06/1997




Section: 5 Application of section 3 E.R. 2 of 2014 10/04/2014


(1) Section 3 shall not have effect-
(a)-(b) (Repealed 71 of 1985 s. 4)
(c) in respect of a chit-fund operated in accordance with subsection (2).

(2) A chit-fund may be operated if-
(a) there are not more than 30 participants;
(b) the operator is not at the same time operating another chit-fund;
(c) the common fund put up for sale or payment to the participants does not exceed $20000; and
(d) no benefit accrues to the operator other than a right to receive the first subscription free of interest.

(3) Notwithstanding anything contained in this section any person who advertises a chit-fund, whether in a
newspaper or by any other means, commits an offence and is liable to a fine at level 4 and to imprisonment for 3
years.

(4) The Legislative Council may, by resolution, amend the amount specified in subsection (2)(c). (Added 71 of
1985 s. 4)

(Amended 71 of 1985 s. 4; E.R. 2 of 2014)




Cap 262 - CHIT-FUND BUSINESSES (PROHIBITION) ORDINANCE 2

Section: 6 Prohibition on registration of chit-fund companies L.N. 163 of 2013 03/03/2014


A company which has as its object or as one of its objects the operation of chit-funds must not be registered
under the Companies Ordinance (Cap 622).

(Amended 28 of 2012 ss. 912 & 920)

Section: 7 (Repealed 71 of 1985 s. 5) 30/06/1997




Section: 8 (Repealed 71 of 1985 s. 6) 30/06/1997




Section: 9 Liability of directors, managers, etc., under sections 3 and
4

30/06/1997



(1) If an offence under this Ordinance has been committed by a body of persons, whether corporate or
unincorporate, any person who was, at the time of the offence, a director, partner, member, manager, secretary or
principal officer of or employed by such body, or who was purporting to act in any such capacity, shall be guilty of a
like offence.

(2) Where any person referred to in subsection (1) is charged with an offence under this Ordinance, it shall be a
defence for him to prove that the offence was committed without his consent or connivance, and that he exercised
such diligence to prevent the commission of the offence as he ought to have exercised having regard to the nature of
his functions and to all other circumstances.

(3) Where the agent or servant of a person (hereinafter referred to in this section as "the principal") does or
omits to do anything which, if done or omitted to be done by the principal, would constitute an offence under this
Ordinance, then the agent or servant and the principal shall be deemed to have committed an offence and shall be
liable to be proceeded against and punished accordingly.

(4) Where the principal is charged with an offence under this Ordinance, it shall be a defence for him to prove-
(a) that he did not ratify the act or omission complained of; and
(b) that the act or omission was not within the ordinary scope of the employment of the agent or servant,

but it shall be no defence that he had no knowledge of the act or omission.

Section: 10 Saving of rights and claims 30/06/1997


Nothing in this Ordinance shall prejudice the enforcement by any person of any right or claim against any person
ceasing to carry on business or to operate chit-funds, by virtue of this Ordinance.