TNAG-2125-FCO40-3032-Banking-situation-in-Hong-Kong-1990 — Page 61

CONFIDENTIAL

fie.

Mkc 102/d.

нас

- MAY 1990

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ZE

062035

MDHOAN 8185

ci

PERSONAL FOR GOVERNOR FROM MARSDEN

2!

HKD

MIPT: FCO TELNO 879: JARDINE FLEMING BANKING LICENCE

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FOLLOWING IS THE TEXT OF HENRY KESWICK'S LETTER TO THE

PRIME MINISTER.

ITS VALUE TO BRITAIN'

QUOTE IN ITS BOOKLET HONGKONG

(PRODUCED TO INFLUENCE THE RIGHT OF ABODE DEBATE), THE HONG KONG GOVERNMENT CLAIMS THAT IT IS QUOTE ONE OF THE WORLD'S FREEST ECONOMIES UNQUOTE. YET ITS RECORD IN THE AREA OF FINANCIAL SERVICES LICENCING IS SADLY ALMOST AS CHAUVINISTIC AS JAPAN'S.

I AM WRITING TO ASK FOR YOUR HELP IN OBTAINING A FULL LOCAL LICENCE FOR JARDINE FLEMING. THIS BRITISH-CONTROLLED MERCHANT BANK IN HONG KONG HAS BEEN APPLYING FOR A LICENCE TO THE HONG KONG GOVERNMENT FOR EIGHT YEARS. THEY HAVE NOW BEEN TOLD THAT A RULING HAS AGAIN BEEN DEFERRED, BUT WILL NOT BE QUOTE LOST SIGHT OF UNQUOTE.

THESE REPEATED DEFERRALS ARE BASED ON THE ARGUMENT THAT JARDINE FLEMING IS QUOTE NOT PREDOMINANTLY OWNED BY HONG KONG INTERESTS UNQUOTE. WHETHER IT WOULD STAND UP TO JUDICIAL REVIEW TO DISCRIMINATE AGAINST BRITISH INTERESTS IN A BRITISH COLONY IN THIS WAY IS PERHAPS UNCERTAIN, BUT IF POSSIBLE WE WOULD VERY MUCH WISH TO AVOID PURSUING OUR APPLICATION ALONG CONSTITUTIONAL LEGAL LINES.

JARDINE FLEMING IS ONE OF THE LEADING MERCHANT BANKS IN THE ASIA PACIFIC REGION. SINCE ITS FOUNDING TWENTY YEARS AGO IT HAS BEEN A MAJOR FORCE IN DEVELOPING HONG KONG AS AN INTERNATIONAL

FINANCIAL CENTRE. IT WAS ALSO THE FIRST FOREIGN HOUSE TO OBTAIN A SEAT ON THE TOKYO STOCK EXCHANGE.

JARDINE MATHESON'S LINKS WITH HONG KONG GO BACK OVER 150

YEARS. IT IS TODAY THE BIGGEST PRIVATE SECTOR EMPLOYER IN HONG KONG EMPLOYING 46,000 PEOPLE. IT HAS 25,000 SHAREHOLDERS, MANY OF WHOM ARE HONG KONG RESIDENTS. IT SHOULD SURELY NOT BE

DISCRIMINATED AGAINST AS NOT BEING PREDOMINANTLY HONG KONG OWNED.

THERE IS SOMETHING SUPREMELY IRONIC IN A BRITISH-OWNED MERCHANT BANK HAVING TO APPEAL TO A BRITISH PRIME MINISTER FOR

HELP IN OBTAINING A LICENCE IN A BRITISH COLONY SEMI COLON

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CONFIDENTIAL