CONFIDENTIAL
43
016162
MDLOAN 6848
CONFIDENTIAL
FM FCO
TO PRIORITY HONG KONG
TELNO 1704
OF 10120OZ SEPTEMBER 90
HKB 290
TOP CCPY
190
Q DIST ?
INFO PRIORITY BTC HONG KONG, UKREP JLG HONG KONG
25
YOUR TELNO 2020: FUTURE OF THE BRITISH COUNCIL IN HONG KONG
1.
APOLOGIES FOR THE DELAY IN REVERTING ON THIS SUBJECT. WE HAVE NOW CONSULTED OUR LEGAL ADVISERS AND THE BRITISH COUNCIL'S HEAD OFFICE.
2. EHRMAN'S CORRESPONDENCE WITH JULIAN DAVEY SEEMS TO US TO RAISE TWO KEY ISSUES:
(I) WHAT LEGAL STATUS THE BRITISH COUNCIL HAS IN HONG KONG NOW AND WHETHER IT IS NECESSARY OR DESIRABLE TO DO ANYTHING TO SAFEGUARD OR IMPROVE THAT STATUS AGAINST THE RESUMPTION OF CHINESE SOVEREIGNTY: AND
(II) WHETHER WE SHOULD TAKE THIS MATTER UP WITH THE CHINESE.
3. ON THE FIRST POINT, OUR LEGAL ADVISERS ARE SOMEWHAT PUZZLED BY THE STATEMENT IN JULIAN DAVEY'S LETTER OF 7 JUNE THAT THE BRITISH COUNCIL'S LEGAL BASIS IN HONG KONG WILL DISAPPEAR IN 1997. THE BRITISH COUNCIL IS A BODY CORPORATE ESTABLISHED BY ROYAL CHARTER IN THE COUNTRY OF ITS INCORPORATION. THAT IS ITS POSITION TODAY AND WILL REMAIN ITS POSITION IN 1997. IF THAT LEGAL BASIS IS CONSIDERED TO BE SUFFICIENT TODAY IT IS NOT CLEAR WHY THINGS SHOULD BE DIFFERENT IN 1997.
4. IT MAY BE THAT THERE ARE PROCEDURAL OR TECHNICAL ADVANTAGES IN REGISTERING OR 'REINCORPORATING UNDER HONG KONG LAW. BUT THESE CONSIDERATIONS ARE PRESUMABLY EQUALLY APPLICABLE NOW AS IN 1997. AS TO THE CHOICE BETWEEN THE VARIOUS MEANS OPEN TO THE BRITISH COUNCIL TO CONSOLIDATE ITS CORPORATE STATUS, THIS IS OBVIOUSLY A MATTER FOR THE COUNCIL'S OWN LAWYERS. BUT WE AGREE WITH YOUR ADVICE THAT REGISTRATION UNDER THE COMPANIES ORDINANCE, IF SLIGHTLY ANOMALOUS, WOULD BE THE LEAST VISIBLE OPTION.
5.
ON THE SECOND POINT, WE THINK THAT THE QUESTION OF WHETHER
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