TNAG-0103-FCO40-139-Briefs-and-background-notes-for-Lord-Shepherd-1967 — Page 4

details of he guarantee furt

eru to

wh the opposition will give a thorough airing,

4.

The unacceptable risk lies mot in the fact

that the Hong Kong Government must give a guaranteo

but in the demand that the guarantee should

enforceable against its London assets. The

implication that would immediately be road inte

this require

that H,k,ü, raakars

Colony's only worthwhile assets aro those which

are held in Landon, The impact of this on

confidence in and outside Hong Kong would be

dhatterinɛ] the whole purpose of be acaroise

would be lost.

5. We therefore welcome your alternative

proposal involving promissory notes.

arrangemont could equally attract publicity but it im

not susceptible of the dangerous inferences which

mant put the previous suggestion out of court.

The Hong Kong Government see no difficulty in

moeting your wish that your bankers should receive

paymont in London without further specific

suthorisation.

6. Thore is one further point in your letter

which we must take up and that concerns your

query na to how the Hong Kong GovoŊnsent will

satisfy Costains that the firm will be paid if

contract cost amsods £10 million.

point arises, of course, on the condition laid

down in paragraph 6(e) of the agreedbrief for

Lord Shephard. As Cettorill will recall,

Cowperthwaite made the peint that Costain's, and

CONFID ITIAL

/the