SECRET
ھے
IMMEDIATE
CYPHER CAT A
FM F C 0 271700Z MAR
SECRET
ORWELL
DESKBY 283100Z
RE
IN
PA
REGI
51
1- Ark 17/4
HKK 5/10
TO IMMEDIATE HONG KONG TELNO 314 OF 27 MARCH 1974.
28.11
31
لله
FOR HADDONCAVE
YOUR TELNO 375: PRESENT STERLING GUARANTEE
LAST
REF
30
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32 43
1. YOUR TELEGRAM DOES INDEED CONFIRM THAT THERE HAS BEEN MISUNDERSTANDING ON THE ACCIDENTAL BREACH PROVISION. BUT WE DO NOT HAVE MUCH TO ADD TO PARA 2 OF OUR TELNO 389 OF MARCH. THE ONLY PROVISION FOR ACCIDENTAL BREACHES THAT WE HAVE EXTENDED TO ANY PARTICIPANT IN THE CURRENT GUARANTEE
NAF
IS THAT DESCRIBED IN SUBSTANCE IN PARA 2 OF CUR TELNO 1209 (225) HKK ST..
CF 26 NOVEMBER 1973, AND WE ARE AWARE OF NO OTHER CASE IN MICH IT HAS LED TO MISUNDERSTANDING OR DIFFICULTY.
2. AS TO THE POSITION AT THE END OF THIS MONTH, WE WOULD BE PREPARED TO COMPENSATE ON THE BASIS SET OUT IN PARA 3 OF CUR TELNO 309 BUT, IN THE LIGHT OF YOUR TELNO 375, WITH AN ADJUSTMENT TO TAKE ACCOUNT OF STERLING INTEREST ACCRUALS DURING MARCH. WE TOOK IT THAT IN CALCULATING THE AMOUNT OF STERLING WHICH YOU WOULD NEED TO HAVE PURCHASED IN MARCH UNDER YOUR INTERPRETATION OF THE ACCIDENTAL BREACH PROVISION YOU WOULD HAVE TAKEN ACCOUNT OF EXPECTED INTEREST ACCRUALS IN STERLING. TO COVER THIS MORE EXPLICITLY, THE FORMULA SET OUT IN PARA 3 OF OUR TELNO 309 SHOULD NOW READ AFTER ''ON THAT DAY CR'':
''THE AMOUNT HELD ON 28 FEBRUARY PLUS THE STERLING INTEREST
RECEIVED DURING MARCH, WHICH IS MAINTAINED IN STERLING PLUS THE STERLING WHICH, 13 ACCORDANCE WITH YOUR INTERPRETATION OF THE ACCIDENTAL BREACH PROVISION, WAS PURCHASED DURING MARCH IN ORDER TO COMPLY WITH THAT PROVISION, WHICHEVER AMCUNT IS LOVER, FOR THIS PURPOSE, VALUATION,..
3. PROVIDED THAT YOUR PURCHASES PLUS INTEREST ACCRUALS IN MARCH ARE SUFFICIENT TO RE-ESTABLISH YOUR END-FEBRUARY POSITION (ON THE BASIS OF YOUR INTERPRETATION OF THE ACCIDENTAL BREACH
(1973)
SECRET
/PROVISION