TNAG-2028-FCO40-2890-Hong-Kong-freezing-of-Kuwaiti-and-Iraqi-assets-1990 — Page 76

6477R

14. 8.90

MR GREEN

FROM PD COMPTON

Copies to

Mr Crockett o/r* Mr Page o/r*

Mr Elston o/r*

Mr Gammon

Mr Milne

Mr L FT Smith Section 7

Mr Furness, FCO

(* without

attachments)

HONG KONG: KUWAITI ASSET FREEZE

1

Gordon Giles, Director, and Linda Davies, Legal Counsel, of Baring Asset Management Ltd called this morning to discuss a problem facing their Hong Kong subsidiary, Baring International Asset Administration Ltd (BIAAL).

2

BIAAL have a discretionary investment management agreement with the Kuwait Investment Authority and have sought permission from the Secretary of Monetary Affairs, Hong Kong to continue to manage the portfolio on behalf of the Kuwait Investment Office. Their application was based upon the Letter of Authority from the

Stefan Gannon, Legal Kuwait Minister of Finance dated 2 August. Adviser to the Monetary Affairs Branch has raised two questions:

(a)

improper witnessing of the Kuwait Minister of Finance's signature ie the witness is not named (the date would also appear to have been written by some other hand);

(b)

3

the constitutional relationship between the KIA and the KIO.

Barings are seeking quidance as to the way forward and led me to understanding that the Kuwaitis (the KIO?) were becoming frustrated with the delay, particularly since the US Treasury gave

approval on 7 August.

4

Following confirmation from Tony Gammon, I advised Giles that the Bank of England has not accepted the Letter of Authority from Kuwait Minister of Finance and recommended that he encourage