5 LI AND THE TWO SENIOR EXECUTIVES OF THE STOCK EXCHANGE HAVE BEEN RELEASED ON BAIL WITHOUT CHARGE PENDING FURTHER ENQUIRIES. THEIR PASSPORTS HAVE BEEN IMPOUNDED.
6 TODAY, THE NEW AND SUSPENDED CHAIRMAN OF THE EXCHANGE, CHARLES SIN, HAS ATTACKED THE GOVERNMENT FOR THE ARRESTS AND FAILURE TO LAY CHARGES AGAINST LI AND HIS COLLEAGUES. SIN HAS SAID THAT THESE DEVELOPMENTS AND THE GOVERNMENT'S MOVE TO EXCLUDE SOME MEMBERS OF THE EXCHANGE FROM ITS NEW MANAGEMENT COMMITTEE IS A ''SMEAR CAMPAIGN'' DESIGNED TO UNDERMINE THE STANDING OF CERTAIN PROMINENT HONG KONG BUSINESSMEN. SIN ALSO * FRARSLISSUE WITH THE CLAIM LAST WEEK BY THE FI
:+2:JGFH:.?A A GOVERNMENT HAD NOT BEEN PROPERLY CONSULTED BY LI PRIOR TO THE FOUR-DAY CLOSURE OF THE EXCHANGE IN OCTOBER AND WITH JACOBS' IMPLICATION THAT THE GOVERNMENT DID NOT REALLY APPROVE OF OR CONCUR IN THE MOVE. THE STAGE SEEMS SET FOR AN IMPORTANt strugglE BETWEEN THE GOVERNMENT AND SOME OF HONG KONG'S TYCOONS. A LOT WOULD SEEM TO BE AT STAKE FOR BOTH.
7 AS FOR 1997, IT MAY BE ASSUMED THAT THE PRC, WANTING TO TAKE OVER A HONG KONG THAT IS PROSPEROUS AND A LEADING INTERNATIONAL FINANCIAL CENTRE, WOULD WELCOME MOVES THAT MIGHT HELP ENSURE THIS. ON THE OTHER HAND, MANY OF HONG KONG'S LEADING CHINESE TYCOONS WHO HAVE REACHED EMINENT POSITIONS IN A BUSINESS SYSTEM THAT HAS NOT ALWAYS PAID REGARD TO THE STANDARD PROPRIETIES AND WHO MIGHT FIND THEIR BUSINESS ACTIVITIES CIRCUM- SCRIBED BY NEW REGULATIONS AND STRICT ENFORCEMENT, ARE PRECISELY THOSE WHO ARE THE STRONGEST SUPPORTERS OF THE PRC POSITION THAT A SUCCESSFUL TRANSITION IN 1997 DOES NOT REQUIRE ANY POLITICAL REFORMS OR ADJUSTMENTS.
* CORRECTION TO гонюш
8 THE DEMOCRATS' IN HONG KONG, WHO ARE PUSHING FOR POLITICAL REFORM IN THE LEAD UP TO 1997 IN ORDER TO MAKE BOTH THE LEGISLATURE MORE ACCOUNTABLE TO THE PEOPLE AND THE EXECUTIVE MORE ACCOUNTABLE TO THE LEGISLATURE, HAVE BEEN MAKING LITTLE HEADWAY AGAINST THE PRAGMATIC CONSERVATIVE BUSINESS FORCES WHO ARGUE THAT THERE IS NO NEED TO ROCK SUCH A SUCCESSFUL BOAT. THE ARREST OF LI, ONE OF THE STRONGEST OPPONENTS OF PRE-1997 REFORMS IN HONG KONG, WILL STRENGTHEN THE PLATFORM OF THE DEMOCRATS.
COL 421 00005 2 3 4 5 6 7 8
04/1630HKG
TORW 04/01/88
WLN 8366
UNCLASS SECURE
22:12:24
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