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Governor that this could still not happen through, for
past example, the/reports of the Director of Audit we would be in a position to say that whatever has happened in the past, the Hong Kong Government have no intention of purchasing South African stocks in future. It should also be noted that the total value of South African stocks (about £2.8 million at March 1976) accounts for less than 1% of the Hong Kong Government's total overseas. investments. In any case, the Governor has been told. that we would not wish to suggest that the Hong Kong Government's holdings of South African stocks are so potentially, embarrassing that they should be sold off immediately and "certainly not under any circumstances which could cause a financial disadvantage" (paragraph 2 of Mr Murray's letter). Since the Governor has indicated that the Hong Kong Government would make a financial loss if they were to dispose of their South African investments I do not think that we can press him further.
4.
Incantly
There is one point, however, that has emerged which gives grounds for concern. The Governor has said that four out of the, five South African stocks held by the Hong Kong Government were purchased by the Crown Agents "under their discretionary investment mandate
#1 The Hong Kong Secretary for Monetary Affairs informed Mr Smit Senior Economic Adviser, recently that the Crown Agents acquired these stocks without the knowledge of the Hong Kong Government. The Crown Agents would presumably not have done so if South Africa were not, at that time, included in the Hong Kong Government's list of designated
canba countries in which investments are made. Nevertheless,
it seem questionable whether the Crown Agents, for whose operations Ministers are answerable to Parliament,
should have/lunghdstill be purchasing South African stocks on behalf of the Governemnts of UK dependent Territories.. This arrangement is the more open to
hermore
/ criticism
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