4100
(four stocks in one case and two in the other).
There are no Hong Kong Government holdings in South
African defence bonds to our Kunwledge. ARGUMENT
autonomy,
Urue....
3. It is clear that the Hong Kong Government has been
within its rights in investing funds in South African
stocks. It would not be consistent with the degree of
financial economy that the Hong Kong Government hase
been allowed to acquire during the post-war period for
us to attempt to influence its decisions on the placing
of investments, which have presumably been determined
Ruancial by normal commercial considerations. Nor is there ---
anything objectionable in what the Hong Kong Government have has done so far as sterling is concerned. Following the
ending of the Sterling Guarantee Arrangements in late
1974, the Treasury have accepted that the Hong Kong Government may diversify their sterling holdings. When
the question arose in another context last summer the
Treasury informed us that the gradual and careful way in
which the Hong Kong Government had diversified out of
sterling left "no cause for repproach". Moreover, the
Treasury are kept regularly informed of the Hong Kong
Government's investment policies and have been aware of
the investments in South African stocks. The Treasury
have said that they have no complaints to offer from **
their point of view.
4.
This said, the Hong Kong Government's investment in
because & South African stocks is a sensitive matter given the
our commercial relations with South Africa which a wand attack sensitivity of the whole question of British investment bost at home and abroad For these rasmo HMG what is
in South Africa/HMG responsible to Parliament for
the actions of the Hong Kong Government and could come
under embarrassing criticism if it became known that the
ÀSA* *ZAK PRGIEAMZPE H# invested in South African
It is not Gunment pokay
to place
restintime o
m
normal
civil trade and investment in Santt Aforia. But investment in South Aforier Pronment strek bu
ка
JG-
ко
very different mults from investment by
ma
business coconD.
And, as the recent
こ
Case of investment =
SAJ Defence Bont
by Barlay's Banks
Sant Aforier/Subistuing