EC 11 87 17:55 HK GOVT. SF
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Fax No. 669
Our Ref: SFG 3/7 To: SASI (Teao) From: D(SF) (Lam)
Rept M(W), D(NY) c.c. C(L), M(B), PRG (G)
Date: December 11, 1987
F.1
PEI
Stock Exchange Closure and Related Matters: Your telex Nov. 23
A
The immediate media response was covered in paragraph 1 of my GF 597 of November 10 and our initial action, prior to the establishment of the Review Committee, was described in para. 2 of the same fax. Subsequently, when we briefed journalists and our contacts, we followed the advice given in your fax of Nov. 12 and that in the telex of Nov.
2.
14.
As regards the questions posed in your telex, our observations generally fall in line with those contained in NYO's
We would very comprehensive report contained in his fax of NY2137. just like to highlight the following points :-
(a) It is unfortunate that whilst the closure has
been widely publicized, the Review Committee appears to have received relatively very little attention. Some of the contacts we met recently, e.g. Richard Olsen, Senior Vice President of Transamerica Corporation headquartered at San Francisco (which is listed in London, New York and Tokyo and is considering listing their stock in Singapore or Hong Kong), were unaware of this remedial measure.
(b) There is a general feeling that Ronald Li and his
Board of Directors are running (and closing) the
Tom Seip, Senior Exchange for their own benefit. Vice President of Charles Schwab (the biggest discount broker in the US headquartered in San Francisco and operating a branch in Hong Kong), felt that the Government should step in and force the Exchange to regulate itself more stringently, One example is to include seats in the Board for outside international players, such as Merrill Lynch:
(c) It would appear that most observers do not realise that the credit facilities which have been made available to the Guarantee Corporation by the Exchange Fund and by others are a loan, not a gift. There is considerable amazement at this money being
to defaulters.
'given'
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:
/(a)