A
Downing Street,
318
Rer the
376
3 July, 1968.
124
Hong Kong Harbour Tunnel
Further to my discussion with you yesterday I feel I should ask you to look once again at the terms on which the Export Credits Guarantee Department is offering to cover loan finance for the cross-harbour tunnel in Hong Kong, in particular at the requirement that the shareholders in the project should give joint as well as several guarantees for the loan.
The considerations that have led me to make this request arise from informal representations made to my department by representatives of the Tunnel Company. Colonel Clague (Chairman of Hutchison International Limited, a principal shareholder in the Tunnel Company) is in England at the present time, He has, as you know, already made representa- tions to the rime Minister and has indicated to my depart- ment that he is thinking of asking to see him again.
The representations made to us turn on the unreasonable- ness of the joint guarantee requirement. It has been urged that it is a very onerous and unusual requirement in commercial practice; and that, as a very considerable contingent liability in the balance sheets of each of the shareholders, it could seriously affect their credit- worthiness. The broader point has been made to us that, on the conditions ECGD seek to impose, it is difficult to see what risk they shoulder or function they perform in
/return
THE LORD BROWN, MBE.
LAST
REF.
RECEIVED IN
"CHIVES No.63
132
- 5 AUG 1968
HULA 2/5
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