CO129-571-14 Sino-Japanese War- protection of interests in the Sincerity Company 19-12-1938 - 13-1-1939 — Page 7

3.

(2) Nothing in this article shall affect the right

of the Secretary of State to direct that British protection shall not be accorded to a company,

even though it has been registered under this Order."

(3) Certainly, in all cases where there is no genuine British interest, (.e.g. Oversea Chinese Banking Corporation Ltd., incorporated in Singapore; ing On Company, (Shanghai) Ltd., incorporated in Hongkong; Moscow Narodny Bank Ltd., incorporated in England; Bata Shoe Company Ltd., incorporated in Singapore; Bank of Canton, Ltd., and Bank of East Asia Ltd., both incorporated

in Hongkong, and many other similar cases). In the instance

quoted by Sir Vandeleur Grayburn, namely, the Hongkong and Shanghai Hotels Ltd., the company does not appear to have registered in accordance with the provisions of the China Order-

in-Council of March 17th, 1938, Articles 216 to 222 (see "List of British Companies operating in China as on October 1st, 1938") and would therefore not be entitled to be recognised or protected in China as a British company.

5. The question of the protection of the Sincere Company in China does not seem to me to affect the bank's mortgage and I agree on this point with His Majesty's Consul-General at Shanghai (see his letter of November 23rd to Your Excellency). The position therefore is that the bank holds a mortgage on a Chinese concern, and our only concern is the protection of the Bank's interests. While I cannot tell the Japanese that the

property of the Sincere Company at Canton is British and under the protection of His Majesty's Government, since such is not the case, I informed them as soon as they were installed at Canton of the Bank's interest in this property, and forwarded to the Japanese Consulate-General at Canton copies of the mortgage deeds as soon as I received them from the Bank's Canton agent.

I....

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