XN000022-1987-02-06 — Page 12

11

*

FRIDAY, FEBRUARY 6, 1987

PRESS STATEMENT ON EDA AND CARRIAN INVESTIGATIONS

*****

THE COMMISSIONER FOR SECURITIES, MR RAY ASTIN, ANNOUNCED TODAY (FRIDAY) THAT THE STATUTORY REPORT OF THE INSPECTORS APPOINTED BY THE SECURITIES COMMISSION TO INVESTIGATE THE AFFAIRS OF EDA INVESTMENTS LIMITED, ITS SUBSIDIARIES,

ASSOCIATED

AND RELATED COMPANIES (+THE EDA GROUP+), HAS BEEN RECEIVED BY THE SECURITIES COMMISSION, AND A COPY HAS BEEN DELIVERED TO THE ATTORNEY GENERAL BY THE INSPECTORS, AS REQUIRED BY SECTION 130 OF THE SECURITIES ORDINANCE.

THE INSPECTORS CONCERNED, MR ROBERT C. TANG, QC, AND MR MICHAEL JOHNSON, WERE FIRST APPOINTED ON MARCH 7, 1983 TO INVESTIGATE THE EDA GROUP, AND THIS WAS FOLLOWED BY A FURT HER APPOINTMENT ON APRIL 29, 1983 TO INVESTIGATE THE AFFAIRS OF CARRIAN HOLDINGS LIMITED, CARRIAN INVESTMENTS LIMITED, AND THEIR SUBSIDIARIES, ASSOCIATED AND RELATED COMPANIES (+THE CARRIAN GROUP+) BECAUSE OF THE CLOSE CONNECTIONS BETWEEN THE AFFAIRS OF THE EDA GROUP AND THE CARRIAN GROUP.

IN NOVEMBER 1985, THE SECURITIES COMMISSION, WITH THE AGREEMENT OF THE ADMINISTRATION, INSTRUCTED THE INSPECTORS TO CONCENTRATE ON COMPLETING THE EDA GROUP INVESTIGATION AS QUICKLY AS POSSIBLE, AND TO SUSPEND THE CARRIAN GROUP INVESTIGATION FOR THE TIME BEING. THE SECURITIES COMMISSION ALSO AGREED WITH THE ADMINISTRATION THAT, ON COMPLETION OF THE EDA GROUP INVESTIGATION, THEY WOULD REVIEW FURTHER THE POSITION WITH REGARD TO THE CARRIAN GROUP INVESTIGATION IN LIGHT OF THE FUNDS THEN REMAINING, AND OPTIONS AVAILABLE.

THE POSITION WAS RECONSIDERED BY THE ADMINISTRATION AND THE SECURITIES COMMISSION BEGINNING IN OCTOBER 1986 WHEN THE EDA GROUP INVESTIGATION WAS NEAKING COMPLETION AND A REASONABLY ACCURATE ESTIMATE COULD BE MADE AS TO THE BALANCE OF APPROVED FUNDS REMAINING AFTER COMPLETION OF THE EDA GROUP INVESTIGATION. ON DECEMBER 4, 1986, THE SECURITIES COMMISSION, WITH THE AGREEMENT OF THE ADMINISTRATION, DECIDED TO TERMINATE THE APPOINTMENT OF THE INSPECTORS IN RESPECT OF THE CARRIAN GROUP INVESTIGATION WITHOUT REQUIRING THE STATUTORY REPORT IN ACCORDANCE WITH SECTION 130 OF THE SECURITIES ORDINANCE. THIS COULD ONLY HAVE BEEN PRODUCED HAD THE INSPECTORS COMPLETED THEIR INVESTIGATION OF THE CARRIAN GROUP.

THE SECURITIES COMMISSION HAD NOTED THAT POLICE INVESTIGATIONS HAD LED TO THE INSTITUTION OF CRIMINAL PROCEEDINGS AND THAT THE INSPECTORS THEMSELVES HAD IDENTIFIED THE BROADER FEATURES OF WHAT HAD GONE WRONG IN CARRIAN AND WHY, AND THUS THE ESSENTIAL PURPOSE OF THEIR INVESTIGATION HAD BEEN ACHIEVED. IN THE LIGHT OF THESE FACTORS AND THE STILL FURTHER WORK THAT WOULD BE REQUIRED TO BE DONE BY THE INSPECTORS TO COMPLETE A STATUTORY REPORT, WITH CONSEQUENT FURTHER CONSIDERABLE PUBLIC EXPENDITURE, THE SECURITIES COMMISSION CONCLUDED THAT IT WOULD BE IN THE PUBLIC INTEREST TO DRAW THE INSPECTORS' CARRIAN INVESTIGATION TO AN EARLY CLOSE.

/TH. INSPECTORS