radical restructuring of the airline's shareholding took place,
apparently with the aim of meeting the necessary ownership and
control criteria. Details provided by DAL now suggest that the
majority of shares are owned by British Nationals, with Sir Y K and
companies under his control accounting for about 35% of the total.
9.
Hong Kong have recently advised us that in their view
British Nationals now control some 68% of Dragonair's shares and
that adequate arrangements have been made within the company to
ensure that effective control will always rest with British
Nationals. Hong Kong is satisfied that Dragonair comply with the
ASA criteria and have asked us to proceed as quickly as possible
with the necessary bilateral negotiations at government level so
that Dragonair may operate schedule services to the PRC. We remain
responsible for negotiating these rights until such time as Hong Kong has its own bilateral ASA with the country concerned.
10. In the case of Thailand Dragonair has begun scheduled
services to Thailand following its designation under the
UK-Thailand ASA in October 1987.
11.
In the case of the PRC, we will be holding Government
consultations from 3-5 June at which securing rights for Dragonair
to serve points in China will be one of our objectives. We are of
course in close touch with the Hong Kong Government about these
matters. In the meantime, Dragonair is having preliminary airline
talks with Thai International to prepare the ground for government
talks with the Thais.
12.
Dragonair are highly critical of the Hong Kong Government's
aviation policy which is generally based on the designation of only one Hong Kong based airline per route. They argue the policy is not in the public interest and stifles competition and consumer choice.
F.
SINO-BRITISH FRIENDSHIP SCHOLARSHIP SCHEME
Under memorandum establishing this Scheme (signed by the Secretary
of State, Sir Y K Pao and Vice Premier Li Peng on 9 June 1986) China
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