Re: Legal Opinion regarding Deed of Appointment of Substitute Attorney.
We refer to your e-mail dated 11 April 2007 on the above subject.
From your letter it appears that, the Investment Banking Department of the Bank 1 (“Bank 1”) has decided to subscribe to the custody service of the Bank 2 (“Bank 2”).
As per the standard list of required documents for providing the custody service Bank 2 normally takes Power of Attorney from the customer.
But as Bank 1 and Bank 2 both belong to the same legal entity, i.e. the Company 1, Bank 1 has decided to execute a Delegation of Authority instead of the standard power of attorney.
In these circumstances, you have asked our legal opinion as to whether Bank 2 may accept the Delegation of Authority.
As Bank 1 and HSCB Bangladesh both to the same legal entity, i.e. the Company 1, we agree that Bank 1 should not give power of attorney to BANK 2.
From perusal of the documents it appears that, Bank 1 appointed Mr. X as attorney by a Power of Attorney dated 26 July 2004 (“POA”). We have not been provided with a copy of this POA. Please check this POA to see whether Mr.Y has been given the power to sub – delegate his power to attorney(s). Legally a person can only sub-delegate powers which were delegated to him by the power of attorney. Therefore, please check to ensure that the powers sub – delegated by Mr. Y through the Deed of Appointment of Substitute Attorney are powers he himself has under the POA.
Provided Mr. X has been given the power to sub – delegate by the POA, he may execute the Deed of Appointment of Substitute Attorney.
Our opinion of the Deed of Appointment of Substitute Attorney is given below.
Please give the particulars of Mr. X, Mr. y, Mr. A, Mr. B, Mr. C, Mr. D and Mr. E. Particulars should include their designation in HSBC (if they are employees of HSBC, if not their father’s name) and their address.
In the fifth line of paragraph one, please delete “to sign, execute and deliver on behalf of the Corporation the following powers in the Bangladesh market:” and replace it with “to exercise all or any of the following acts, deeds and power on behalf of the Corporation in Bangladesh:”
In clause 1, the term “all companies concerned” has been used. This term is not defined and as such in future there may be dispute as to which companies fall under this definition. We suggest you to define this term. However, please note that, if in the POA, this term was not defined, then it will not be possible to define this term in this Deed of Appointment of Substitute Attorney; then the possible course of action would be to ask Bank 1 to execute a fresh POA, which shall clearly define this term.
If you have any further query, please do not hesitate to contact the undersigned.
For: “The Lawyers & Jurists”