CONFIDENTIAL
Foreign and Commonwealth Office
London SW1A 2AH
(15)
22 February 1977
Sir M MacLehose, GBE KCMG KCVO
HONG KONG
RE
RECE IN
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10. 01
25 FEB 1977
Dear Mannen, Нишения
INVESTMENT IN SOUTH AFRICAN STOCK
AKK 102/1
1. We have noticed from the reports for the years 1974-5 and 1975-6 submitted by the Hong Kong Government's Director of Auditing Services that your Government holds approximately £2.8 million sterling of its surplus financial balances. invested in South African stocks. You will be aware of the sensitivity felt in certain circles in Britain about any investment in South Africa and Lord Goronwy-Roberts has asked me to write to you to draw your attention to the investments and to the fact that their existence might leave you and, of course, the Secretary of State in Parliament vulnerable to some embarrassing criticism on this score.
2.
You
Having said that, I should underline immediately that we do not suggest that these holdings are so potentially embarrass- ing for us as to suggest that the Hong Kong Government should divest itself of them immediately, certainly not under any circumstances which could cause a financial disadvantage. may feel, however, that it would be politically unwise to expand the portfolio of South African stocks and that the path of wisdom would be a gradual phased reduction of the holdings at a rhythm compatible with your own local considerations.
3. You will have been aware of the fuss made about the recent investment by Barclay's Bank in South African Defence Bonds. You in Hong Kong have no holding in Defence Bonds, I know, but Lord Goronwy-Roberts thought it right to draw your attention to this particularly sensitive type of investment. All of us here, do, as you know, feel that part of our duty is to draw to your attention any Hong Kong matter which may have significance in the British political scene.
Yours wat
CONFIDENTIAL
DF Murray
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