by granting clemency to a nationalist spy.

It would also have undesirable effects on the

Hong Kong Police Force in general and on the

Special Branch in particular both of whom

regarded Chu Loung at the time of the

disciplinary inquiry as a spy and still so

regard him

7. If Mr Jenkin asks what security

implications there are

in the case,

the Minister might say

that when

he mentioned there implications in

his letter of

30th July,

he had in

mind the general situation arising

from

the fact

that the Special Branch

had been penetrated by

K.M.I. agent

(of which there was evidence apart from

this

case). This

wes a

farticularly

not

sensitive subject

which he was

anxious to discuss.

NOTHING TO BE WRITTEN IN THIS MARGIN

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