CONFIDENTIAL

proposal from Sir Michael Sandberg (previous Chairman of the Hong Kong and Shanghai Bank and a past member of ExCo) to the Home Secretary and Prime Minister.

A

5.

The Prime Minister was initially attracted by this idea, but the Home Secretary strongly opposed it on the grounds that to have met the request would have necessitated his using his discretionary powers in a way contrary to the principle underlying the BNA 1981 that British citizenship should reflect a close link with the UK. We and the late Governor were unhappy on grounds relating to confidence in Hong Kong. Following consultation with the Secretary of State the Home Secretary set out their agreed views in a letter of 27 June 1986, to the Prime Minister. The Prime Minister accepted

this advice.

d) Civil Aviation: Dragonair

6.

Li Ka-Shing is a shareholder in the Hong Kong-based aviation

company Dragonair.

THIS IS A COPY THE ORIGINAL HAS BEEN

CLOSED UNDER

FOI EXEMPTION NO.

240(2)

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