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Mr Ricketts
PS/Lord Caithness
miniti
FROM: T Furness
+KB 040/1
Hong Kong Department
DATE 11 February 1992
cc: Sir J Coles
Mr Burns
Mr Broadbent,
Economic Advisers,
Segred
खेसर
4 See
在
CALL ON LORD CAITHNESS BY SIR CHARLES POWELL AT 1000 ON 12 FEBRUARY 1992
1. In addition to raising general points on Hong Kong, Sir Charles Powell is likely to broach the Jardines delisting issue, and I attach his recent letter to Mr Ricketts.
2.
Although we await a more detailed read-out from Hong Kong on the result of the discussions which took place there recently between Jardines and the major HKG players, it is clear that agreement has now been reached between Jardines and the Stock Exchange Council on the rules for a secondary listing. The rules will now go to the Securities and Futures Commission and if they are content Jardines will then be able to ask their shareholders for their agreement to the secondary listing.
3. There is however one major potential problem which relates to an SFC idea for requiring a second shareholder vote before a company can terminate a secondary listing, a requirement which has not so far been imposed on other companies who seek a secondary listing. Sir Charles Powell argues that as Jardines shareholders will be asked to vote on the primary listing move to London, and on the adoption of the secondary listing, they will be fully aware of the implications of the secondary listing, which will include the power of directors to terminate such secondary listing after an appropriate period of notice (a three month period has been agreed). Thus any person buying shares in Jardines following the first vote will buy them in full awareness of the position including the "risk" of the company delisting from the Hong Kong exchange. Sir Charles Powell's arguments conclude that it is unnecessary to require a second vote of shareholders to confirm a matter on which they already decided upon previously. Sir Charles Powell's objection is based on unnecessary regulation. He is supported by the
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