CONFIDENTIAL
020467
MDHIAN 2675
PLANNING TO ASK THE COMMITTEE TO LOOK AT THIS AGAIN AT OUR NEXT MEETING. THE CURRENT MOVE BY HUTCHISON TO TAKE OVER COMPLETE OWNERSHIP OF CAVENDISH WOULD FURTHER STRENGTHEN THE CAVENDISH CLAIM. ON THE OTHER HAND THE COMMITTEE TOOK THE VIEW, WITH SOME LOGIC, THAT WHEREAS HUTCHISON QUALIFIED ON GROUNDS OF IMPORTS FROM THE UK AND JOINT VENTURES CD (III) AND D (IV) OF OUR CRITERIA), AND HONG KONG ELECTRIC ON GROUNDS OF IMPORTS AND THEIR OWNERSHIP BY HUTCHISON (CRITERIA D (II) AND D (IV)), NEITHER CHEUNG KONG, WHICH IS PRIMARILY A LOCAL PROPERTY COMPANY, NOR CAVENDISH, WHICH HAS LOCAL PROPERTY INTERESTS AND STRONG LINKS OVERSEAS, (EG HUSKY OIL IN CANADA) BUT NOT WITH THE UK, HAS SUFFICIENT LINKS, AND CERTAINLY LITTLE OR NOTHING IN THE WAY OF TRADE, TO QUALIFY. THESE FACTORS WILL REMAIN. THEREFORE EVEN IF THE COMMITTEE TAKES ANOTHER LOOK AT CAVENDISH THEY STILL MAY NOT BE APPROVED. ALL PARTS OF THESE GROUPS ARE QUITE FINELY BALANCED AND THERE ARE NO EASY ANSWERS. HUTCHISON AND HONG KONG ELECTRIC, THE COMMITTEE BELIEVES, ARE MUCH BIGGER EMPLOYERS THAN CAVENDISH OR CHEUNG KONG.
3. IF LORD DERWENT AND SIMON MURRAY ASK THE MINISTER WHETHER OR NOT THE LI KA SHING COMPANIES HAVE BEEN DEEDED BRITISH UNDERTAKINGS, IT WOULD BE QUITE POSSIBLE TO STICK ON SAYING THAT THEY HAVE BEEN CONSIDERED CAREFULLY AND SYMPATHETICALLY, THAT THE HONG KONG GOVERNMENT IS LIKELY TO PUBLISH THE LIST OF APPROVED BRITISH UNDERTAKINGS QUITE SHORTLY, AND THAT WE ARE NOT MAKING PUBLIC THE OUTCOME UNTIL THEN, AND THAT WE HAVE NOT BEEN TELLING FIRMS INDIVIDUALLY ABOUT THE COMMITTEE'S FINDINGS. SINCE HOWEVER THE LIST IS LIKELY TO BE PUBLISHED VERY SHORTLY IT WOULD CLEARLY BE MORE FRIENDLY TO TELL THEM IN CONFIDENCE PRIOR TO PUBLICATION THAT HUTCHISON AND HONG KONG ELECTRIC HAVE BEEN APPROVED, TOGETHER WITH ALL THEIR SUBSIDIARY COMPANIES, AND THAT CAVENDISH 'AND CHEUNG KONG HAVE NOT: THAT THE DIFFERENCE IS LARGELY BECAUSE THE FIRST TWO TRADE SUBSTANTIALLY WITH THE UK AND THE LATTER TWO DO NOT: BUT THAT IT IS ALWAYS OPEN TO THE COMMITTEE TO TAKE ANOTHER LOOK AT COMPANIES NOT ON THE LIST ESPECIALLY IF CIRCUMSTANCES CHANGE, AND THAT THE CURRENT MOVE BY HUTCHISON TO . BUY OUT THE REMAINING SHARES OF CAVENDISH COULD BE SUCH A FACTOR. I HOPE ANY VERY DETAILED DISCUSSION OF THE REASONS BEHIND THE COMMITTEE'S FINDINGS CAN BE AVOIDED. THERE IS NO PLAN TO PUBLISH THE CRITERIA WE HAVE BEEN USING, AND I HOPE THEREFORE THAT WE WILL NOT HAVE TO TRY TO JUSTIFY OUR DECISIONS ON AN INDIVIDUAL
BASIS OTHER THAN IN FAIRLY GENERALISED TERMS.
4. I HAVE ALSO RECEIVED A LETTER FROM LORD MACLEHOSE OF 26
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CONFIDENTIAL