C.
CONFIDENTIAL
INWARD TELEGRAM
TO THE COMMONWEALTH OFFICE (The Secretary of State)
FROM HONG KONG (Sir D. Trench)
D. 6th April, 1967.
Cypher
R.
11 6th
#1 11.25 hrs.
APP
1967
n
23
IMMEDIATE
CONFIDENTIAL
No. 434.
HUB21/5
Addressed to Export Credit Guarantee Department. Repeated " Board of Trade
(Commonwealth Office please pass
to both).
From B.T.C. Hong Kong.
EXPORTCRED 53.
Elliott from Hannam.
Tunnel.
I was summoned unexpectedly at noon to a Tunnel Company board meeting, being held prior to the departure abroad of Clague and Kadoorie.
2. The board have received a telegram from Scales reporting_your position roughly on the lines of paragraph 3 of Commonwealth Office telegram No. 649 to Governor Hong Kong.
3. After discussion they authorised me to tell you (on condition that the information does not (repeat not) reach Costains with whom further negotiations on detail are needed) that they intend to give the contract to Costains provided you compromise further. Lengthy discussion ensued which I report in my immediately following telegram leading to their presenting me with a message for you.
4.
Begins.
We cannot assume responsibility for political risk.
5. We cannot speak for the Government or the bank at this stage (for whom 221% of the equity is reserved) but the present shareholders are prepared to give a proportionate guarantee totalling 771% of the shortfall between the tunnel revenue and the amount due to E.C.G.D. as the notes fall due, until such time as shares have to be offered to the public under franchise requirements, which only practicable if tunnel a financial success. It would not be equitable for original participants to carry a greater risk than other shareholders who acquire shares through the market.
Ende.
6. Please see my immediately following telegram.
LAST
REF.
CONFIDENTIAL
18
/Copies