CONFIDENTIAL
111620 MDADAN 0785
CONFIDENTIAL
FM HONG KONG
TO DESKBY 02070OZ FCO
TELNO 11
OF 02050OZ JANUARY 88
INFO DESKBY 04010OZ PEKING
ADVANCE COPY
RESIDENT CLERK PLEASE PASS TO PAUL, HKD AT 0208OOZ
YOUR TELNO 3398: HONG KONG STOCK EXCHANGE: INVESTIGATION BY ICAC
1. THE OPERATION PROCEEDED THIS MORNING ACCORDING TO PLAN. IN THE EVENT, THE ICAC ONLY ARRESTED 3 PEOPLE: MR RONALD LI,
MR JEFFREY SUN AND MR DONALD TSANG. THE TWO SECRETARIES WERE
ASKED TO COME IN FOR QUESTIONING BUT WERE NOT ARRESTED AS THEY
ARE COOPERATING WITH THE ICAC.
2. MIFT CONTAINS THE TEXT OF THE TWO PRESS RELEASES ISSUED BY
ICAC THIS MORNING. MY SECOND IFT CONTAINS THE RESOLUTION PASSED
BY THE COMMITTEE OF THE STOCK EXCHANGE. MY THIRD IFT CONTAINS
THE TEXT OF A PRESS STATEMENT THAT HAS BEEN MADE BY THE FS. HE
DID NOT ANSWER ANY QUESTIONS. WE ARE SEPARATELY INFORMING THE
HEADS OF THE HONG KONG GOVERNMENT OFFICES OVERSEAS AND MR IAN HAY
DAVISON OF DEVELOPMENTS.
·
3. PA HAS ALSO BRIEFED THE NCNA. HE TOLD THEM THAT AN ICAC
INVESTIGATION INTO THE STOCK EXCHANGE IS IN PROGRESS AND THAT
MESSRS LI, SUN AND TSANG HAVE BEEN ARRESTED FOR QUESTIONING.
THE HONG KONG GOVERNMENT SAW THE NEED TO ENSURE THAT NORMAL
BUSINESS WAS MAINTAINED IN THE STOCK EXCHANGE AND THEREFORE
SUGGESTED TO THE COMMITTEE THAT A MANAGEMENT COMMITTEE BE SET
UP TO RUN THE EXCHANGE WHILE ICAC INVESTIGATIONS CONTINUE. HE
WILL ADD THAT WE WOULD HAVE TAKEN PARALLEL ACTION TO INFORM CHINESE OFFICIALS IN PEKING IF THE MFA HAD NOT BEEN CLOSED TODAY. IN ANSWER TO QUESTIONS, HE WILL SAY THAT THOSE MEMBERS OF THE COMMITTEE WHO ARE NOT MEMBERS OF THE MANAGEMENT COMMITTEE MAY BE QUESTIONED BY ICAC AND THAT THE INVESTIGATION HAS NOTHING TO DO
WITH THE STOCK MARKET FALL IN OCTOBER.
WILSON
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RESIDENT CLERK
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