CO129-433 - Governor Sir May - 1916 [5-6] — Page 565

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In reply to your letter of the 23rd, Marsh, I am instrusted to say that the Hongkong Government do not propose to offer any objection to your offering the new shares in question to any sharp-holders in your Oompany who are ameny subjects, if you are in a position to communisats with them or their attorneys, and that in any case the Hongkong Govern- ment will offer no objestion to your reserving the proper

number of new shares for any such shareholders.

I would point out that the prohibitions of the

Ürdinance dealing with trading with the enemy, speaking generally, apply only (s) to persons resident or sarrying on business in an enemy country or in territory in hostile occupation, and (b) to persons of enemy nationality resident or carrying on business in China, Siam, Persia, Morosso, Liberis or Portuguese East Africs. I am not definitely aSTATO where any of the persons specified in your letter reside or

Carry on business.

Inview of the above you will no doubt consider your position and obligations towards the shareholders in question and will again sonsult your legal advisors as to what souras

you should take. It would also be advisable for you to seek

the advice of the British authorities in China.

The legal position of shareholders who are divided

by the line of war from the company in which they hold shares is a question of much unsertainty, and ià is this useriainty and the serious question of polisy which is also involved that have led the Hongkong Government to take up the attitude which

they have adopted in this matter.