XN000022-1995-02-27 — Page 6

T

5 -

FS: Well, I think it is clearly very unfortunate that Barings has got into trouble, apparently through their Singapore office. What we have done -- both the SFC and the Monetary Authority have acted very quickly. As you know, dealings of the various Barings Companies here have been suspended in respect of the Stock Exchange and the Futures Exchange. And the bank of course is closed. That will give us time to assess what the longer term implications are. So that's an interim measure really. The main action of course lies in London. The main bank is in London and the Bank of England is the main regulator. So we have to see how things develop in London. But meanwhile, it is very good that both the SFC and the Monetary Authority have acted swiftly and the assets will be protected in that way.

Question: Why do you think the closure of the normal business of Barings Brothers was the best way the safeguard the interest of the investors?

FS: Clearly, following the announcement in London that Barings in London, is also closed for business, we can't really have branches and subsidiaries going on when there is this doubt about the future of the bank, so that is the best thing. I should also make it clear, in the Hong Kong context. Barings is not a big bank. It is a restricted licence bank. That means it doesn't have small investors at all. It doesn't take small deposits.

Question: What is the impact on the investors?

FS: I think what investors will want to know over the next few days as the position gets a bit clear is not so much the position of the bank which is not a great interest to most people in Hong Kong, but the position of the various funds which Barings manage in Hong Kong. So we have to see what could be said on that.

Question: Is there something learnt from the case?

FS: So far there is no indication that there is any problem in Hong Kong. The problem as I say emerged in Singapore and then of course fed back into the parent bank in London. That's the cause of the problem. That's not a Hong Kong cause. But clearly we have to guard our own investors and that's why we've taken these steps. As the thing becomes clearer, I think we will be able to issue some more detailed announcements. Thank you very much.

End/Monday, February 27, 1995