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28. It is difficult to produce any accurate analysis of
withdrawals by type of depositor. However, based on classification by principal place of business for companies and by address for individuals, it appears that the vast bulk of withdrawals were made by companies or individuals based in Hong Kong, with local companies accounting for about 66% of the total. No withdrawals by Hong Kong Government entities in excess of $1000 have been identified (the two cheques referred to in paragraph 23 were not drawn by Government but by another party in favour of Government).
29. It can be concluded therefore that the decision to
allow BCCHK to remain open on Saturday did not result in a major loss of deposits and thus liquid assets from the bank and the position of depositors as a whole was not therefore materially worsened. Moreover, although it is the case that some depositors placed deposits in cash with the bank on Saturday which subsequently became locked in, the overall amount was not substantial ($1)mn). There is also no clear evidence, on the basis of the available information, of a pattern of large withdrawals by certain depositors which might indicate that they had inside knowledge.
The decision to close the doors of the bank on Monday
30. The operations of the bank on Saturday provided
inconclusive ev.dence as to what might happen if the bank opened its doors on Monday. At that stage, relatively litt..e publicity had been given to the
losure of BCC operations elsewhere. However, during Saturday I rece..ved the news that Visa International had decided to block BCCHK credit cards, of which there were about 7000 in circulation. This meant that cards would be seized when used in ATM machines or in shops. The company felt: unable to distinguish between different entit:.es in the BCC Group and was only prepared to lift. the restrictions if it received an ndemnity from the Hong Kong Government against the B3CCHK card programme. I discussed the evolving situation over the weekend with members of my staff, Price Waterhouse and the management of the bank. Concern was expressed that, in the absence of clear support from the shareholders, other counterparties of the bank might follow Visa's example and withhold performance of their obligations. If they did, the bank's profitability and ultimately, its solvency would
suffer.
J
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