CONFIDENTIAL
FM BTC HONG KONG
TO IMMEDIATE F CO
TELNO 62
OF 21090OZ FEBRUARY 91
AND TO IMMEDIATE DTI
CONFIDENTIAL
ADVANCE COPY
065753 MDADAN 9363
Mr. Mogris 21/2
DTI FOR LOVE, OT2
BRITISH UNDERTAKINGS
THE ADVISORY GROUP MET ON 20 FEBRUARY AND APPROVED A FURTHER
55 BRITISH UNDERTAKINGS.
1.
2. DETAILS OF THE COMPANIES CONCERNED AND THE BASIS FOR THEIR APPROVAL WILL BE SENT BY FAX TODAY 21 FEBRUARY. MOST WERE RELATIVELY ROUTINE, BUT TWO MORE DIFFICULT CASES APPROVED AT THIS SESSION WERE THE HONG KONG AND CHINA GAS COMPANY (TOWN GAS) AND THE MTRC.
3. AS REPORTED IN MY TELNO 35 OF 29 JANUARY, HONG KONG GAS WAS DEEMED TO QUALIFY BECAUSE OF THEIR SUBSTANTIAL TRADE LINKS (D III) BUT THE COMMITTEE HAD QUESTIONED THE COMPANY'S CLAIMS CONCERNING ITS DEGREE OF BRITISH OWNERSHIP (D I) AND ASKED FOR CLARIFICATION. ADDITIONAL INFORMATION WAS PROVIDED BY THE COMPANY IN THE FORM OF AN ASSESSMENT BY SCHRODERS ON THE PERCENTAGE OF SHARES IN BRITISH HANDS WHICH ON BALANCE SATISFIED THE COMMITTEE.
4.
MTR WAS REVIEWED IN LIGHT OF ADDITIONAL LETTERS FROM THE COMPANY. I WAS ALSO MINDFUL OF PARA 3 OF YOUR TELNO 40 OF 29 JANUARY WHICH STATED COMPANIES COULD NOT BE RULED OUT BECAUSE THEY ARE NOT PERCEIVED TO BE BRITISH (THE MAIN FACTOR IN THEIR PREVIOUS REJECTION). THE COMMITTEE AFTER SOME DEBATE FAVOURED MTR'S INCLUSION ON GROUNDS OF BRITISH MANAGEMENT (D I), ALWAYS THEIR STRONG POINT, AND ALSO ON TRADE (D III), HAVING DECIDED THAT THE COMPANY'S VERY MAJOR PURCHASES FROM THE UK WERE INDEED SUFFICIENT TO JUSTIFY INCLUSION. WE DISCUSSED THE CONCEPT THAT SINCE THEIR MAIN BUSINESS IS MOVING PASSENGERS AND NOT TRADING THEN THEIR PURCHASES OF CAPITAL EQUIPMENT FROM THE UK WOULD NOT COUNT UNDER D III (WHICH I UNDERSTAND TO BE THE REASONING BEHIND THE VIEW OF THE LEGAL ADVISORS AS EXPRESSED IN PARA 4 (SIC) OF ALAN PAUL'S FAXED LETTER OF 7 JANUARY), BUT THE COMMITTEE TOOK THE VIEW THAT (A) THE PURCHASES FROM THE UK WERE SO LARGE THAT THEY SHOULD COUNT,
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