CODE 18-77
Reference
subjects; the trust objects are legally sufficient to allow the trust to be operated; and the trustee is, I think, the person named in the deposit receipt in the bank in Hong Kong.
10. There are, however, three problems in particular:-
(a) we do not have satisfactory documentary proof of the creation of the trust, and certainly not of the purposes of the trust. So far as I am aware, the only evidence we have of the purposes of the trust is the telegram from Hong Kong which appears at Flag M (though there is discussion of possible objects of the trust in the telegram at K). It is disappointing that the Hong Kong authorities cannot unearth the correspondence between the Chief Secretary and Sir S K Tang; indeed, it is surprising that correspondence relating to such a large amount of money has disappeared in only three years. As things are at the moment, we cannot even put the telegrams we have to the Charity Commissioners, were we minded to do so, because they are, for some reason, classified as RESTRICTED. (Some of the other correspondence is classified CONFIDENTIAL, though it is hard to see why this was thought necessary.) It does seem to me that there could be a problem in providing what the trust purposes are, and it may be worth giving thought to obtaining affidavits from officials in Hong Kong who were involved in the transaction, so that we have some evidence of what was agreed.
(b) In these circumstances, it would be unwise to distribute any of the money until the whole arrangement can be placed on a more formal basis. This should be taken forward as soon as possible, perhaps along the lines suggested in paragraph 10 below.
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(c) It is for consideration whether we should seek some kind of renunciation of rights or disclaimer from the executrix and the heirs. This would remove any possibility of challenge of the trust from that direction. On the other hand, I think there can be little doubt that the money was transferred to HMG for the purposes indicated in the telegrams, and to go back to the executrix now might stir up matters unnecessarily, and plant the seeds of a challenge which would otherwise not have been thought of. My inclination would be to let sleeping dogs lie, but I would be grateful for your views.
11. Action
There is no doubt at all that a formal trust arrangement has to be set up, as soon as possible, clearly indicating the purposes for which the money can be used, the trustees who are to administer the trust and making the usual technical
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