TNAG-1650-FCO40-2297-Hongkong-and-Shanghai-Banking-Corporation-(HSBC)-1987 — Page 34

CONFIDENTIAL

GRS 300

CONFIDENT HAL

COMMERCIAL-IN-CONF÷#DENCE

FM HONG KONG

TO DESKBY 16080OZ FCO

TELNO 2774

OF 160605Z JULY 87

INFO *MMED DATE PEKHING

102/8

OP

TOP COPY Q DIST ?

HONG KONG BANK: PURCHASE OF ADDITIONAL SHARES # MARINE MIDLAND

1. THE HONG KONG AND SHANGHAM BANK HAVE TOLD THE COMMISSIONER OF BANKING THAT THEY ARE TELLING THE BOARD OF THE MARINE MIDLAND BANK HN NEW YORK AT 1300 NEW YORK TIME ON 15 JULY THAT THEY ARE BIDDING FOR THE REMAINING SHARES IN MARINE MUDLAND NOT NOW HELD BY

THEM.

2.

THE

AT PRESENT THE HKSB OWNS 52 PERCENT OF MARINE MIDLAND. RATIMONALE FOR THE NEW MOVE IS THAT MARINE MIDLAND ARE EXTENDING THER OPERATIONS THE STATES BY ACQUISITION. BECAUSE OF MARKET PERCEPTION OF THE HA ROLE THEY ARE MORALLY OBLINGED TO TAKE 100 PERCENT OF THE RESK BUT ONLY STAND TO GAIN 52 PERCENT OF THE BENEFIT. BY OBTAINING FULL CONTROL THEY WOULD BE ABLE BOTH TO DIRECT THE BANK AS THEY WISH AND TO BENEFIT IN FULL FROM ANY PROFITS. THE COST OF THE EXTRA SHARES MS LIKELY TO BE IN THE REGION OF US DOLLARS 600-700

MULL HON.

3.

HKSB (BARKER) SHOULD HAVE TOLD THE BANK OF ENGLAND ABOUT THIS MOVE YESTERDAY AFTERNOON.

CONFIDENTIAL