TNAG-2245-FCO40-3228-Bank-of-Credit-and-Commerce-Hong-Kong-Limited-(BCCHK)-1991 — Page 75

The events

Apparently they had not. The Secretary of State said that relations with the UAE were generally good and on a firm footing, enhanced by our role in the Gulf conflict. concerning the BCCI had come as a shock. The position was intricate. He was anxious to minimise any harm which might be

caused. It was a matter of judgement as to how best to do

this. HMA in Abu Dhabi had ben very active. The possibility

of Ministerial contacts was, of course, kept under

consideration. He said he expected to meet the UAE's Foreign

Minister Rashid Abdullah at the UN General Assembly later this

month. But Ministerial visits were not a substitute for the

important contacts that the Bank of England and the SFO had.

The consistent advice given locally to our Ambassador was that an early high level visit would not help. On the question of restructuring BCCI, the Secretary of State said he recognised

the difficulties and hardship which the BCCI crisis had created

for depositors and staff. He also would like to see a solution as soon as possible. The Government wanted depositors to get

back as much of their money as possible. But these were

matters for the Bank of England who had statutory

responsibility. There was a window of opportunity until the

court hearing on 2 December which allowed efforts to

restructure the bank to continue. This was not a matter HMG

could seek to influence. It was for the Bank of England to

make a judgement on whether the proposals were compatible with their statutory obligations. Any bank which was to operate in

the UK would have to be clean. There was no question of HMG

blocking moves towards reconstruction if the Bank of England

were satisfied with them. The Secretary of State undertook to

report this discussion to the Prime Minister, the Chancellor of

the Exchequer and the Governor of the Bank. The Secretary of State said that he had discussed BCCI (Hong Kong) informally

with the Hong Kong Government during his recent visit. He was

aware that the crisis had caused difficulties for the

authorities. His impression was that, although there was still

172asoj

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