CONFIDENTIAL
021237
MDHIAN 9467
CONFIDENTIAL
FM HONG KONG
TO IMMEDIATE F C O
TELNO 2623
OF 21051OZ AUGUST 91
YOUR TELNO 1512: BANK OF CREDIT AND COMMERCE HONG KONG LIMITED (BCC HK)
1.
2.
WE ARE CONTENT WITH YOUR PROPOSED REPLY TO KEITH VAZ.
THE PARTY WILL BE ARRIVING IN HONG KONG OVER A HOLIDAY WEEKEND, NEVERTHELESS THE COMMISSIONER OF BANKING (C OF B) HAS AGREED TO SEE THEM ON SATURDAY 24 AUGUST AND EXPLAIN THE PRESENT POSITION TO THEM. WE HAVE HAD NO DIRECT APPROACH FROM MR VAZ HIMSELF: THE ARRANGEMENTS WITH C OF B WERE MADE BY DEPOSITORS OF
BCC HK.
3 =
FOR YOUR INFORMATION, SINCE OUR TELNO 2510 DISCUSSIONS HAVE BEEN TAKING PLACE BETWEEN THE PROVISIONAL LIQUIDATOR, C OF B AND SEVERAL POTENTIAL PURCHASERS OF BCC HK BUT IT IS BY NO MEANS CLEAR AT THIS STAGE WHETHER OR NOT A DEAL CAN BE FINALISED. C OF B WILL NEED TO BE FULLY SATISFIED OVER THE SHAREHOLDER, MANAGEMENT AND CAPITAL STRUCTURE OF A RESURRECTED BANK AND THE PURCHASERS MAY WELL REQUIRE GREATER COMFORT IN RESPECT OF THE NET ASSET VALUE OF THE BANK THAN THE RULER OF ABU DHABI IS CURRENTLY PREPARED TO PROVIDE. HE HAS SO FAR ONLY OFFERED AN INDEMNITY AGAINST ANY UNDISCLOSED LIABILITIES. CLEARLY WE CAN ONLY PERMIT A NEW BCC HK TO OPERATE WHICH IS SOUND AND VIABLE AND LEAVES US WITH NO PROSPECT OF FUTURE PROBLEMS.
4.
CURRENTLY WE WOULD PUT THE CHANCES OF A SUCCESSFUL DEAL AT 50/50. KEEPING THE BANK IN SUSPENDED ANIMATION IS INCURRING SUBSTANTIAL OVERHEADS AND, UNLESS THE LIKELIHOOD OF A SUCCESSFUL RESCUE OPERATION STRENGTHENS OVER THE NEXT WEEK OR SO, IT WILL BE IN THE INTERESTS OF CREDITORS FOR THE BANK TO BE WOUND UP. AT THE COURT HEARING ON 27 AUGUST THE PROVISIONAL LIQUIDATOR INTENDS TO ASK FOR THE HEARING TO BE ADJOURNED FOR ABOUT TWO WEEKS SO THAT
HE HAS MORE TIME TO EVALUATE THE OFFERS.
FORD