What happens when an investigation is ordered by court?

• A. The board conducts internal audit.
• B. The company must appoint external auditors.
• C. The director's liability is suspended.
• D. The Financial Secretary appoints inspectors to investigate and report on the affairs.

Answer: (D)

When the court orders an investigation into a company's affairs, it triggers a formal, official inquiry rather than any internal process. In Hong Kong, the Financial Secretary steps in to appoint inspectors who will thoroughly investigate the company’s affairs and report their findings to the court. This arrangement provides an independent examination of potential mismanagement or malfeasance, with inspectors having broad powers to access books, summon witnesses, and require documentation. The goal is to uncover facts and guide any court-ordered remedies, not to perform an internal audit, automatically appoint external auditors, or suspend directors’ liability.