CONFIDENTIAL
布政司署
香港下亞畢道
GOVERNMENT SECRETARIAT
LOWER ALBERT ROAD
HONG KONG
本署檔號 OUR REF.: SCR 1/5321/79
ний
36111
15 August, 1981
*YOUR Ref.:
!
7 % AUG 1981
D. Enti
Mr. Fjár
R D Clift Esq
مرا
छिल
Hong Kong & General Department
FCO
Pl. discuss X
with
Pl. dgr
ec
Jeck,
FED. I ond reply.
CHINESE CLAIMS TO PROPERTY IN HONG KONG:
THE PAO HSING COTTON MILL CASE
2118
See
I think you should be aware of a case pending in the High Court concerning a local cotton mill called Pao Hsing and the claim by its allegedly parent company in China, the Pao Yuen Tung Hsing Yieh Company.
2.
The case is complex and I will not trouble you with all the detail. The essential point is that the company in China claims that it set up a subsidiary company in Hong Kong in 1948 and that the directors of the Hong Kong company, during the 1950s, fraudulently took control. The 'parent" company in China is now
The
owned by the State (the Ministry of Commerce). original three directors in Hong Kong are dead. Their estates are apparently seeking to sell the Hong Kong property.
3.
At this stage the China company issued a writ in the Hong Kong court. This writ states that the plaintiff (i.e. the company in China) is owned entirely by the PRC. In a preliminary hearing the judge ruled that there was no case against the cotton mill itself although there was a possible case against the estates of the three original directors. Appeals have been launched by both sides. The China company has also now put in a second writ with an amended statement of claim. Unlike the first, this writ does not refer specifically to ownership by the PRC.
4.
During my absence the NCNA called on Iain Orr to express concern about the case. They said that it involved the property of the Chinese Government. They asked that the Acting Governor should be made aware of their concern and that the Hong Kong Government should "uphold justice" and "prevent the sale and transfer" of
/contd.
CONFIDENTIAL
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