TNAG-1269-FCO40-1619-Banking-situation-in-Hong-Kong-1983 — Page 105

CONFIDENTIAL

2

records are correct, CHL was not aware that there had been a substantial transfer of debt to its books. In addition

CHL, CIL and CUL appear to have been unaware of the use made of their assets. This in itself has implications for the audit of these companies.

Clearly, the examination of conflicting records and statements is necessary before conclusions are reached. I consider, however, that I should put on record what it is we are examining and the possible implications of such examination. In the immediate reconciliation, if this in to be credible, it seems to me that the following will need

to be established: -

(a)

(b)

(c)

(d)

(e)

that the Board of Bank Bumiputra agree the transfer of debt required in their books and that such transfer of the debt and whatever its new security is notified to the regulatory authorities concerned,

that assets of the Carrian Companies are released as becomes appropriate;

that the Carrian Companies are satisfied beyond doubt that debts taken over by Mr. Tan etc. carry no liabilities for the Carrian Companies;

that Bank Bumiputra resolves that it will in no circumstances pursue any claims on Carrian Companies;

the eligible creditors are satisfactorily advised.

Such d reconciliation does not, however, mean that the examination of what has occurred between BMFL and Carrian is concluded.

Yours faithfully.

(Robert Fell)

Commissioner for Securities

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