XN000022-1991-07-05 — Page 3

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FRIDAY, JULY 5, 1991

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BANK OF CREDIT AND COMMERCE HONG KONG LIMITED

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THE

COMMISSIONER OF BANKING, MR DAVID CARSE, HAS

TODAY

(FRIDAY) MADE A STATEMENT ON THE IMPLICATIONS FOR BANK OF CREDIT AND COMMERCE HONG KONG LTD (BCCHK) OF THE PROBLEMS WHICH HAVE ARISEN ELSEWHERE IN THE BCC GROUP. HE HAS MADE IT CLEAR THAT THE ORIGIN OF THESE PROBLEMS LIES OUTSIDE HONG KONG, THEY CAST NO DOUBTS ON THE HONG KONG BANKING SYSTEM WHICH REMAINS HEALTHY AND SOUND.

BCCHK IS AN ENTIRELY SEPARATE ENTITY FROM THOSE PARTS OF THE RCC GROUP WHERE THE PROBLEMS HAVE ARISEN AND SHOULD NOT BE AFFECTED BY THESE PROBLEMS. THE COMMISSIONER HAS GIVEN HIS ASSURANCE THAT THE OPERATIONS OF BCCHK REMAIN SOUND AND VIABLE.

SUSPECTED

MR CARSE SAID: "THERE IS NO EVIDENCE HERE OF THE FRAUD WHICH HAS LED TO THE DIFFICULTIES IN THE REST OF THE BCC GROUP. FOLLOWING THE AUDIT OF ITS 1990 ACCOUNTS, BCCHK HAS A CUSHION OF PROVISIONS AGAINST BAD AND DOUBTFUL DEBTS AND STILL REGARDED AS ADEQUATE."

SUBSTANTIAL THESE ARE

COMMISSIONER'S

AND

"AT PRESENT, BCCHK IS MEETING ALL THE PRUDENTIAL REQUIREMENTS, INCLUDING THOSE RELATING TO LIQUIDITY CAPITAL ADEQUACY. BCCHK HAS ONLY MINOR DEALINGS WITH THE REST OF THE BCC GROUP,

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THE OFFICE OF THE COMMISSIONER OF BANKING IS SEEKING TO MEET WITH THE GOVERNMENT OF ABU DHABI, WHICH IS THE ULTIMATE MAJORITY OWNER OF BCCHK, TO DISCUSS THE EXTENT AND NATURE OF ANY FINANCIAL SUPPORT FOR BCCHK, IF ANY SHOULD BE REQUIRED. THE OFFICE OF THE EXCHANGE FUND HAS ALSO INDICATED ITS WILLINGNESS TO PLACE FUNDS WITH BCCHK, SHOULD THIS PROVE NECESSARY, ON NORMAL COMMERCIAL TERMS.

IN THE MEANTIME, TO PROVIDE FURTHER ASSURANCE THÁI THE INTERESTS OF DEPOSITORS ARE FULLY PROTECTED, THE COMMISSIONER HAS APPOINTED MR ALBERT CHEOK, THE DEPUTY COMMISSIONER OF BANKING, AND MR COLIN SELBY OF THE HONGKONG AND SHANGHAI BANKING CORPORATION LTD TO

AS ADVISERS TO THE MANAGEMENT OF BCCHK IN THE PRUDENT CONDUCT ITS BUSINESS. THE COMMISSIONER HAS TAKEN THIS ACTION UNDER SECTION 52(1)(B) OF THE BANKING ORDINANCE.

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NOTE TO EDITORS:

IN

IT HAS BEEN ANNOUNCED THAT THE SUPERVISORY AUTHORITIES LUXEMBOURG AND THE CAYMAN ISLANDS HAVE TAKEN ACTION TO SECURE CONTROL OF THE ASSETS OF, RESPECTIVELY, BCCI SA, A LUXEMBOURG-INCORPORATED BANK AND BCCI OVERSEAS LTD, A CAYMANS-INCORPORATED BANK. THESE BANKS ARE

SISTER COMPANIES OF BCCHK, ALL THREE INSTITUTIONS BEING OWNED BY SAME LUXEMBOURG HOLDING COMPANY, BCCI HOLDINGS SA. THE BUSINESS BCCHK IS, HOWEVER, ENTIRELY SEPARATE FROM THAT OF ITS SISTER COMPANIES. BCCI HOLDINGS SA IS 77% OWNED BY THE ABU DHABI GOVERNMENT.

THE OF

MR CHEOK IS ON SECONDMENT FROM THE RESERVE BANK OF AUSTRALIA WHERE HE WAS THE CHIEF MANAGER, BANK SUPERVISION DEPARTMENT. MR SELBY IS CURRENTLY HEAD OF INTERNAL AUDIT AT THE HONGKONG AND SHANGHAI BANKING CORPORATION LTD AND HAS BEEN WITH THE BANK FOR OVER THIRTY

YEARS.

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