CO129-431 - Governor Sir May - 1916 [1-2] — Page 17

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British shareholders could be safeguarded would be either to compel the companies to liquidate altogether and distribute their assets as suggested by Sir F.H. May, or to allow them to reconstruct on the condition that they paid off their British shareholders in cash

I have devoted some time to trying to find some more satisfactory solution of this problem, but

It would be useless to have been unable to do so. pass legislation on the lines of the "Trading with the Enemy Amendment Act 1916" with a view to enabling British authorities to liquidate these companies compulsorily, since owing to the peculiar conditions of the country, it would presumably be impossible to compel the enemy directors and members of a company to carry out the orders of liquidation. I am inclined

to think that we might, in sending a copy of the despatch

and enclosures to the Foreign Office, remark briefly

in the sense of the above minute and say that we propose, with the Foreign Office concurrence,

to tell

the Governor that the most satisfactory solution appears to be either to compel the companies to wind up altogether and distribute their assets, or to allow them to reconstruct on the condition of their buying out the interests of British shareholders for cash at a satisfactory rate of payment.

6.31011

Arl

4.3.16

Move Bd. 7.3

N°

&

Inclosures 17o4.

sir.

C. O.

15

8104

REC

REG 19 FEE 16

GOVERNMENT HOUSE,

HONGKONG. 4th. January, 1916.

Gov

15

864 76

Referring to my Despatch No. 377 of the 26th.

November, I have the honour to forward copies of further corres- -pondence with His Majesty's Consul-General at Shanghai relative to Hongkong registered Companies with a preponderint enemy interest

I may point out, with regard to paragraph 7 of

2.

my latter of the 24th. December that a winding up by the Court or under its supervision is a long and expensive process, and it has the further objection that it is doubtful what view the Court might take on the various questions arising out of the enemy character of some of the shareholders. It is possible that it would not recomise in them any locus standi.

I have the honour to be,

sir,

Your most obedient,

humble servant,

Donag

Governor,&c..

THE RICHT HONOURABLE

ANDRE" BONAR LAW, M.P.,

80..

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