CONFIDENTIAL
FM HONG KONG
TO IMMEDIATE FCO
TELNO 38
OF 061104Z JANUARY 92
INFO IMMEDIATE HKGO LONDON
CONFIDENTIAL
153125
MDHIAN 8060
HMB 040/1
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HKGO PERSONAL FOR YAXLEY
PERSONAL FOR RICKETTS, HKD FROM GOVERNOR
204
MY TELNO 3889: JARDINES
1. YOU MIGHT LIKE TO KNOW THE LATEST STATE OF PLAY.
2. ROBERT OWEN WROTE TO GREG TERRY OF JARDINES ON 20 DECEMBER 1991 ON A PERSONAL AND CONFIDENTIAL BASIS TO FIND OUT FORMALLY
WHERE JARDINES NOW STAND ON THE TAKE-OVER ISSUE. JARDINE'S
RESPONSE IS STILL BEING AWAITED.
3. IN HIS LETTER, OWEN POINTED OUT THAT THE SFC'S DRAFT CONSULTATION PAPER ON THE TAKEOVERS CODE WAS PREPARED ON THE BASIS OF AN EXEMPT OR TRADING-ONLY LISTING STATUS, AND AS SUCH THE DRAFT WAS NO LONGER APPROPRIATE. IF JARDINES WISHED TO ASK SFC TO PROCEED WITH A PUBLIC CONSULTATION ON THE TAKEOVERS ASPECT, IT WOULD BE FOR THEM TO FORMULATE A NEW PROPOSAL WHICH WOULD ENABLE SFC TO PREPARE AN APPROPRIATE CONSULTATION DOCUMENT.
4. OWEN QUERIED IN HIS LETTER THE WISDOM OF HAVING ANOTHER PUBLIC CONSULTATION, GIVEN THAT MARKET SENTIMENT WOULD BE AGAINST THE CREATION OF A SPECIAL STATUS. IN THE ABSENCE OF A SPECIAL STATUS, IT IS DIFFICULT TO SEE THE TAKEOVERS COMMITTEE AND SFC ENDORSING
AN AMENDMENT TO THE AMBIT OF THE TAKEOVERS CODE WHICH WOULD
PERMIT CONTROLLING SHAREHOLDERS OF HONG KONG LISTED COMPANIES TO AVOID THE CODE SIMPLY BY DELISTING. THIS WOULD CREATE A VERY REAL INCENTIVE FOR COMPANIES TO DELIST FROM THE EXCHANGE. OWEN WARNED THAT ANY PUBLIC CONSULTATION EXERCISE MIGHT CREATE A REAL RISK OF REKINDLING SOME OF THE EMOTIONS SURROUNDING THE EXEMPT LISTING PROPOSAL. IN FACT, GIVEN JARDINE'S ACCEPTANCE THAT THE CODE APPLIES TO IT WHILE IT REMAINS LISTED ON THE EXCHANGE, THE AMBIT OF THE CODE IS NOW A HYPOTHETICAL QUESTION.
5. OWEN STRESSED THE PERSONAL NATURE OF HIS LETTER, ADDING THAT
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