CO129-520-7 Public Utility companies- acquisition by foreign groups 4-12-1929 - 26-1-1930 — Page 15

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control and British management of færniga companies

thatxo xxxii ( even very important public

utility companies) operating in foreign territories

that the risk of reprisals was felt to be great.

On general-obvious-economic grounds, special action

was also deprecated.

3. In several recent cases, th Cos: have (by

appropriate means) introduced restrictions as to

share holding by foreigners. The Calcutta Electric duffly 20

Tramways, for example, limit foreign held or controll-

ed shares to 20% of the total issues; and the directors

must be British subjects. This was done, I remember,

on an intimation from the G of I that it was desir-

able. The Burma Corporation -again I think on an

intimation from the G of India that this was desir-

able--give foreign shareholders no vote.

4.

This method--whichavoids very many difficult-

ies--would probably be successful in a large number

of cases, and particularly where no suggestion of

the acquiring of foreign control has as yet been

made. Much, obviously, would depend on the relations

between the Govt: and the Co:,and the degree of

practical influence which the Govt: possessed.

5. A number of important Swedish Cos: adopt

another method--again, I understand, on an intimation

from their Govt:, though there may have been more

than an intimation behind it. The Swedish Patch

Co:, for example, divides its capital into A and B

shares:--92 million kr: of the former,38 million

kr: of the latter. The shares are equal in all res-

pects, except that the A holder has one vote, and the

B holder 1/1000 of a vote. (The B shares usually

stand materially higher than the A shares)

The information to be received from the other,

Depts: should be awaited.

11-3-30.

11/3/36