TNAG-0944-FCO40-1163-Future-of-Hong-Kong-1980 — Page 23

BY BAG

CONFIDENTIAL

TIZA

布政司署

香

下亞畢道

HICK OHoll

本署檔號 OUR REF.:

**YOUR REF.:

CR 8/1476/79 RECEIVED IN REG.SIPY NO. 51

R D Clift

HK&G Dept FCO

INDEX

по

10 OCT 1980

JFACER

PA

REGISTRY Action Takert

GOVERNMENT SECRETARIAT

LOWER ALBERT ROAD

HONG KONG

29 September 1980

-18.10.80.

iR tome

Mr. Maglie

8/10-

lear

Jick,

m.

Williamot

6/10

e6122

TIN SHUI WAI

You may see press reports about China Resources "buying" for HK$600 million the land at Tin Shui Wai about which I have written previously.

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2. This is essentially a legal technicality. As I have reported, China Resources have already obtained a 51% share in the existing company which owned the land. There was a legal dispute, however, about a small number of untraced shares in that company owned by the families which originally lived in the area. The judge ordered a "dutch auction". This duly took place on 22 September. Only the consortium owning the site registered to take part and they automatically bought the existing company at the minimum price of $600 million. The present situation therefore is that the consortium, under the name of Beehive Enterprises Ltd., now own 52.5 million square feet of land at Tin Shui Wai. Shareholdings in Beehive are 51% China Resources; 25% Trafalgar Holdings (John Wu etc); 12.5% Cheung Kong (Li Ka-shing) and 4.5% Wheelock Marden. The remaining 7% is presumably available for the missing original shareholders.

3.

I have already commented on the possible significance of China Resources' involvement in a project of this sort where, besides the initial investment, development is expected to cost at least HK$32 billion and take many years to complete. It is also interesting that no other group were willing to challenge the consortium at the auction. In present Hong Kong terms, the land was cheap. But I doubt if even those with ready money would have been prepared to take on such a powerful grouping which was only obliged to go through the motions of a public auction because of a court ruling and would have taken it very amiss if others poached on their preserve.