CONFIDENTIAL
4143 040/1
176631
MDHIAN 9122
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CONFIDENTIAL
FM HONG KONG
TO IMMEDIATE FCO
TELNO 114
OF 14105OZ JANUARY 92
AND TO IMMEDIATE HKGO LONDON
PERSONAL FOR RICKETTS, HKD FROM GOVERNOR
HKGO PERSONAL FOR YAXLEY
ONALD
YOUR TELNO 23: JARDINES
1.
ми
TOP COPY Q DIST?
YOU ARE RIGHT IN SAYING THAT JARDINES HAVE HITHERTO SEEMED TO BE SET ON HAVING CERTAINTY THAT THEY WOULD CEASE TO BE COVERED BY THE HONG KONG TAKEOVER CODE AT SOME SPECIFIC POINT. HOWEVER, AT HIS MEETING WITH THE SFC, GREG TERRY OF JARDINES HAVE THE IMPRESSION THAT THE HONG KONG DIRECTORS OF JARDINES HAD ACCEPTED THAT FURTHER PUBLIC CONSULTATION ON THE SCOPE OF THE TAKEOVER CODE AT THIS STAGE WOULD BE CONTROVERSIAL AND UNLIKELY TO BE IN JARDINES' FAVOUR, AS THE ONLY OUTSTANDING ISSUE WAS HOW THE CODE WOULD APPLY TO JARDINES IN THE EVENT IT SHOULD DELIST. JARDINES MAY STILL EXERT PRESSURE FOR A PRIVATE DEAL, BUT THE SFC CONSIDERS THAT SUCH AN ARRANGEMENT WOULD BE IMPROPER AND UNACCEPTABLE. IT WOULD ALSO BE DIFFICULT TO RECONCILE WITH THE COMMITMENTS TO PUBLIC CONSULTATION MADE BY THE FINANCIAL SECRETARY IN THE COURSE OF THE LEGCO DEBATE ON 24 APRIL 1991.
3.
ROBERT OWEN'S ASSESSMENT IS THAT THE HONG KONG TAKEOVERS COMMITTEE MIGHT BE PREPARED TO LEAVE THE AMBIT OF THE TAKEOVER CODE AS IT IS PRESENTLY EXPRESSED, I.E. THAT IT APPLIES TO ''PUBLIC COMPANIES IN HONG KONG'' WITHOUT FURTHER ELABORATION. THE ADVANTAGE OF MAINTAINING THE PRESENT, SOMEWHAT AMBIGUOUS, DEFINITION OF THE CODE'S AMBIT IS THAT IT WOULD NOT PRECLUDE RAISING THE ISSUE OF THE APPLICATION OF THE CODE TO A DELISTED COMPANY AT A MORE OPPORTUNE TIME, IN THE LIGHT OF FUTURE DEVELOPMENTS IN THE MARKET GENERALLY AND IN JARDINES' OVERSEAS BUSINESS AND SHARE TRADING.
4.
LIKE YOU, WE ARE A LITTLE PUZZLED BY THE APPARENT CHANGE IN JARDINES' POSITION. IT IS OF COURSE POSSIBLE THAT TERRY MAY NOT BE SPEAKING WITH AUTHORITY. MATTERS SHOULD, HOWEVER, BECOME CLEARER WHEN HENRY KESWICK AND SIR CHARLES POWELL VISIT HONG KONG FROM 18-30 JANUARY. POWELL WILL BE CALLING ON THE FS ON 20
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CONFIDENTIAL
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