TNAG-1416-FCO40-1897-The-financial-activities-of-Xu-Jiatun--Head-of-New-China-New-1985 — Page 17

THIS IS A COPY

THE ORIGINAL HAS BEEN RETAINED IN THE DEPARTMENT UNDER SECTION 3 (4) OF THE PUBLIC RECORDS ACT 1958

TG1ABY

alaman

SECRET

Spine

Not convinced the

Nopored maken

Dr Wilson

HKK 10413

Deale

ente

What in

вреска

Please

FROM: A C Galsworthy

DATE:

16 May 1985

CC: Mr Elliott, FED

654

HONG KONG FINANCIAL ACTIVITIES OF MR XU JIA TUN

1. Hong Kong may wish at a certain stage to speak to Mr Xu about

his financial activities in Hong Kong. Should we agree?

RECOMMENDATION

office

2. I recommend that we agree to the Poltiical Adviser's

speaking to the New China New Agency on the lines they have

proposed. I submit a draft telegram to Hong Kong to this effect.

BACKGROUND

3. Prior to the collapse last year of his ailing commercial empire

known as "Millie's Handbags and Shoes", Mr Alan Lau took steps to

ensure that one part of his empire, the left wing newspaper "Tin Tin

Daily News", was salvaged. To achieve this, he arranged a transfer

of ownership, and obtained a loan from the communist owned Kincheng

Bank.

The loan was personally guaranteed by Mr Xu Jiatun, Head of

the New China News Agency in Hong Kong.

4. The newspaper remains viable, (although

is still in some financial difficulty) and

there is no indiciation that Mr Xu's guarantee will be called in by

the bank. However, it seems somewhat rash of Mr Xu to have

personally committed himself in this way. If the newspaper folds, the bank could theoretically call in the loan (although it is

extremely unlikely that

to communist bank would wish thus a

embarrass the head of NCNA) and Mr Xu's name alone is on the

guarantee. This would then be a purely civil matter between Mr Xu

the Bank: there is no basis upon which the Hong Kong Government

could legally intervene to protect NCNA.

and

SECRET

"7:

€