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for the winding-up of the authorised institution. The recessary steps to initiate the presentation of a report into BCCHK, including the giving of the required period of notice, were commenced on Monday, 8 July as a contingency measure.
39. Meanwhile, however, attempts were made to achieve the sale of the bank. During the period 8-10 July, three institutions expressed interest, one of whom confirmed in writing its serious intention to acquire the bank.
40. The situation was, however, complicated by the position
cf BCCHK's Luxembourg-based holding company which, we discovered on Tuesday 9 July, was about to be placed into administration. As a result, on Wednesday, 10 July I dispatched two of my officers to Luxembourg to make contact with the administrator-designate and to establish the legal position there. My officers met the administrator in Luxembourg and subsequently went with him to London where they also met a representative of the Abu Dhabi shareholders. Both the administrator and the representative agreed to work towards a sale of BCCHK.
41. The bank which had made the written offer to buy BCCHK
also travelled to London to take part in negotiations on a sale during the period 12-14 July. However,
However, there were a number of difficulties to be overcome. In particular, the potential purchaser wished to protect itself against performing loans which might turn out to be bad and doubtful and against any unrecorded liabilities which did not appear on the balance sheet of the bank at the time of sale. The question was raised of whether the Hong Kong Government would be prepared to provide an indemnity in respect of the latter and when it was confirmed that it would not, the negotiations broke down on Sunday, 14 July.
42. Discussions subsequently took place in Hong Kong with two other interested parties, but it was not possible to find a technical solution to the problems of a sale which did not involve the Government of Hong Kong acting either as indemnifier or as purchaser, either in whole or in part A late offer by the Government of Abu Dhabi of an .ndemnity simply in respect of any possible unrecorded liabilities of BCCHK was communicated by my office to interested parties, but did not prove to be acceptable to the potential purchasers.
A
S660 SP8 ZS8
(SпOH INOD) 3013JO SWWOO
£Z:81 60-80-166T
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