A RELIABLE SOURCE WITHIN THE LEGCO FINANCE COMMITTEE (HOSE PROCEEDINGS ARE NOT PUBLISHED) HAS CONFIDENTIALLY INFORMED US THAT IN DISCUSSION OF THE LETTER OF INTENT TWO DAYS AGO IN FINANCE COMMITTEE HADDON-CAVE, IN ANSWER TO QUESTIONS, REVEALED THAT THE CONTRACT PRICE IS 286 3ILLION YEN REPEAT TWO EIGHT SIX PILLION YEN AND THAT HONG KONG BEARS
THE RISK OF ANY ADVERSE CHANGES IN THE EXCHANGE RATE. ASKED
WHETHER THERE WAS A GUARANTEE AND IF SO WHETHER THIS DID NOT GO AGAINST EARLIER ASSURANCES THAT THE RESERVES WOULD NOT BE JEOPARDI SED, HADDON-CAVE IS REPORTED TO HAVE CONFIRMED THAT THERE 13 A CUARANTEE AND THAT IT IS ON THE CONTRACT AS A WHOLE.
HE ARGUED THAT IT DOES NOT IN ANY WAY AFFECT THE UNDERTAKING ON THE RESERVES SINCE IT WILL NOT BE COVERED BY THE RESERVES. INSTEAD IT WILL BE COVERED BY AN IMMEDIATE FUNDING OF HONG KONG DOLLARS 1,500 MILLION FROM CENERAL REVENUE, WITH A FURTHER FUNDING LATER AND TH UNDERWRITING BY HONG KONG AND SHANGHAI BANK (INFORMANT WAS RATHER VAGUE ON HOW THIS WAS INTENDED TO WORK).
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3′′ INCIDENTALLY, I UNDERSTAND THAT ALL MEMBERS OF LEGCO HAVE SEEN EXCO PAPERS WHICH, ACCORDING TO INFORMANT, ONLY GAVE THE MAXIMUM UK FIGURE AND THEREFORE LEFT EVEN HIM (A FRIEND OF UK)
WITH THE IMPRESSION THAT THERE WAS NO ALTERNATIVE BUT TO TAKE
THE JAPANESE PROPOSAL. HE HAS NOW BEEN GIVEN OUR SIDE OF THE PICTURE IN CONFIDENCE AND IN BROAD TERMS (BY LEVER) AND IS
CONSIDERING WHETHER TO ASK SOME QUESTIONS.
4.
Yes, See
Gostamos
I AM TRYING TO GET SOME FURTHER INFORMATION ON THE LETTER
OF INTENT AND WILL INFORM YOU OF ANYTHING FURTHER THAT COMES
OUR WAY, BUT THOUGHT YOU MIGHT LIKE TO HAVE THIS FORTHWITH IN CASE SUBJECT COMES UP DURING COURSE OF WEEDON'S PRESENT VISIT
TO STANHOPE GATE ON OTHER MATTERS.
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ASTON