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CONFIDENTIAL

Mi Wilford Si D. Watson.

Mr. Crowson (H.K.I.O.D.)

Mi Goodfell 213.

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Miss Kelly

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MR. ROYLE'S TALKS WITH SIR MURRAY MACLEHOSE

1. Mr. Royle rang me to make the following comments on his talks last night with Sir Murray MacLehose.

Police Corruption in Hong Kong

2.

The Governor intends to set up an anti- corruption unit to investigate allegations of corruption in the police. He intends to appoint John Prendergast who will be known to you who is now retired in Malta. The Governor is writing a letter to Prendergast today. Mr. Royle has given him permission to use his name in support of the appointment. The Governor intends to make an announcement that the unit has been set up (providing Prendergast agrees) around 16 October to coincide with the beginning of the short session of Parliament on that date.

3. The Governor is totally opposed to an outside enquiry. Mr. Royle says that this idea should now be dropped.

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4.

The Governor also commented that he had been shaken by the extent of corruption which had been revealed in the police force He said that one more case would probably soon become public. addition Sutcliffe, the Commissioner of Police, had recently "bared his heart" to him and had told him that there might be another twelve senior police officers who might have been involved in corrupt activities. It was unlikely, however, that their names will be made public.

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Sterling Agreements

5. The Governor had been extremely annoyed by the attitude of Mr. Nott and Derek Mitchell at his meeting yesterday with them in the Treasury. They had made no attempt to be courteous or to see the Governor's view. Sir Murray had therefore

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CONFIDENTIAL

14/8

/decided

13.Vill

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