Explain how you would deal with the following situations. Give reasons for your answers. a. Chan, who
Question:
Explain how you would deal with the following situations. Give reasons for your answers.
a.
Chan, who has been a customer with your branch for a number of years, called at the branch last Thursday and asked to open a limited company account. He is known to be an electrician and has decided to start a business on his own as an electrical contractor. He has provided the name of his solicitor, who is dealing with the formalities. The solicitor tells the branch that the certificate of incorporation and articles of association is expected to be issued by the Companies Registry next week. Based on the above information from the solicitor, your assistant accepted the completed form of mandate and the deposit of a cheque payable to "Chan Electrical Contractor Company Limited". Today, you notice that cheques for HK$50,000 have been presented through clearing. The balance on the account is HK$150,000 credit.
b.
This morning, the branch manager of DEF Bank called your assistant to confirm whether a cheque for the amount of HK$10,000 drawn by your customer, Wong was good for payment. The balance of Wong's account is HK$85,000 credit and the cheque is, in all respects, in order. Over the phone, your assistant has confirmed payment of this cheque. Later the same morning, Wong comes and asks to stop payment of this cheque and another cheque. After enquiry, you find that one of the cheques which has been verbally confirmed good for payment by your assistant.
Corporate Finance A Focused Approach
ISBN: 978-1439078082
4th Edition
Authors: Michael C. Ehrhardt, Eugene F. Brigham