!

SECRET

1435

MDHOAN 6552

4.

WE HAVE THE FOLLOWING COMMENTS ON THE DEFENSIVE POINTS:

(B) ADD THE FOLLOWING AFTER FINAL SENTENCE: QUOTE 10 SEATS WOULD REPRESENT ONE-SIXTH OF THE MEMBERSHIP OF LEGCO, A PROPORTION SIGNIFICANTLY LOWER THAN THE 25 PER CENT WHICH IS THE MINIMUM PROPORTION SPECIFIED IN ALL THE MAINSTREAM OPTIONS DISCUSSED BY THE BLDC IN DECEMBER UNQUOTE.

(E) ADD THE FOLLOWING AFTER THE FINAL SENTENCE: QUOTE ANY LESS FIRM COMMITMENT WOULD ONLY PROLONG PRESENT UNCERTAINTY AND DEBATE. IMPORTANT FOR CONFIDENCE AND STABILITY THAT THIS PHASE SHOULD NOW BE BROUGHT TO AN END UNQUOTE.

HOWE

YYYY

ΜΑΙΝ

25

DISTRIBUTION

26

HONG KONG AGREEMENT RESTRICTED

LIMITED

HKD

HD/FED

RESEARCH (FE)

HD/PUSD

DEP HD/PUSD

PS/LORD GLENARTHUR

PS/MR EGGAR

MR MCLAREN

MR GILLMORE

ADDITIONAL

1

MR FIFOOT, LEGAL ADVISERS

NNNN

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