TNAG-1030-FCO40-1280-Proposed-visit-by-Humphrey-Atkins--Lord-Privy-Seal--to-Hong--1981 — Page 163

DSR 11C

LORD PRIVY SEAL'S VISIT TO HONG KONG: 8 11 JANUARY 1982

BRIEF NO

:

Essential Facts:

HONGKONG AND SHANGHAI BANKING CORPORATION'S BID FOR ROYAL BANK OF SCOTLAND

1. The Hongkong and Shanghai Banking Corporation and the

Standard Chartered Bank have made bids for the Royal Bank

of Scotland. Both of these were referred on 1 May 1981

by the Secretary of State for Trade to the Monopolies and

Mergers Commission, which will report to him before

31 January, 1982.

2. The report will be confidential until publication, which

:

will be arranged as quickly as is practicable and no later

that the third week in February. The reference implied

no prejudice against either bid or any presumption that

either merger would operate against the public interest.

The bids do however raise important issues of public interest

which need examination by an independent quasi-judicial

body. It is now for the Monopolies and Mergers Commission

to consider all aspects of the public interest, and it would

not be appropriate to offer any comment until the Monopolies

and Mergers Commission's report has been published.

There was some press speculation in November about the

introduction of legislation to control bank mergers and

3.

takeovers to replace the present non-statutory arrangements

under which banks are expected to secure the Bank of England's

/approval