OCMIAN 8702
SECRET
PP HOKON
FM FCOLN TO HOKON
271630Z AUG
GRS 259
SECRET
FM FCO
TO PRIORITY HONG KONG
TELNO 1823
OF 271630Z AUGUST 86
SECRET
TOP
COPY
58702 1
YOUR TELNO 2448: STANDARD CHARTERED
1.
WE HAVE CONSULTED THE BANK OF ENGLAND, WHO TELL US THAT
SIR Y K PAO CALLED ON THE GOVERNOR OF THE BANK ON 29 JULY.
NEITHER IN HIS CONVERSATION THEN (NOR IT WOULD SEEM IN
CONVERSATIONS WITH STANDARD CHARTERED) DID SIR Y K PAO INDICATE
THAT HE HAD STRONG VIEWS ABOUT A MAJOR RESTRUCTURING. HE
INDICATED THAT HE COULD BE REGARDED AS A LONG-TERM INVESTOR AND
THAT UNTIL HE HAD TAKEN UP HIS SEAT ON THE BOARD, HE WAS IN NO
POSITION TO MAKE JUDGMENTS ABOUT THE STRATEGY WHICH STANDARD
CHARTERED MIGHT NOW OR IN THE FUTURE BE FOLLOWING.
HE WILL,
HOWEVER BE RETURNING AT HIS REQUEST ON 10 SEPTEMBER TO SEE THE
GOVERNOR OF THE BANK AGAIN: SHOULD ANY FIRMER INDICATIONS OF HIS
INTENTIONS BE REVEALED AT THAT MEETING WE SHALL INFORM YOU.
2.
THE SCENARIO PAINTED IN YOUR CABLE IS, AS YOU POINT OUT,
SPECULATIVE. WHILE UNDERSTANDING THE PROBLEMS WHICH SUCH A
DEVELOPMENT MIGHT GIVE RISE TO IN HONG KONG THE BANK OF ENGLAND
SAY THEY ARE IN NO POSITION TO COMMENT ON IT UNTIL THEY HAVE SOME
DETAIL OF WHAT MAY BE PROPOSED BY THE STANDARD CHARTERED BOARD
NOT JUST IN RELATION TO HONG KONG BUT ALSO MORE GENERALLY FOR
THEIR BUSINESS WORLDWIDE. UNTIL HARD FACTS AND PROPOSALS ARE
AVAILABLE IT IS DIFFICULT TO REACT AT ALL SENSIBLY TO WHAT MAY BE
ONLY ONE OF A NUMBER OF HYPOTHETICAL SITUATIONS AND ONE WHICH
HKK 102/1
2 8 AUG 1986
AJB 288
1
SECRET
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