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CONFIDENTIAL
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CONFIDENTIAL
FM BTC HONG KONG
TO IMMEDIATE FCO
TELNO 15
OF 14093OZ JANUARY 91
Q DIST?
,
AND TO IMMEDIATE DTI (FOR LOVE,
HKD 340/5 3140/5
RECE
TRY
FOR PAUL, HKD
BRITISH UNDERTAKINGS
Dis
INDEX
1. JAN '991
6
112634
MDHIAN 8275
Tel
+ pa.
15/1
1. THE ADVISORY COMMITTEE MET AGAIN ON 11 JANUARY AND APPROVED 17 ADDITIONAL COMPANIES. THERE ARE NOW JUST 18 COMPANIES REMAINING BUT THESE INCLUDE SOME OF THE MOST DIFFICULT, AND MOST OF OUR MEETING WAS SPENT CONSIDERING THEM. THOSE GIVING THE MOST DIFFICULTY ARE HUTCHISON, WHARF, MTR AND KCR.
2. NONE OF THESE WERE APPROVED BUT OPINIONS ARE BEGINNING TO FORM AND YOU MAY WELCOME AN UPDATE ON THE COMMITTEE'S THINKING. MEMBERS TOOK THE VIEW THAT THESE FOUR CAN ONLY QUALIFY UNDER SECTION D OF FCO TELNO 129 OF 24 AUGUST, AND ALTHOUGH IT WAS ACCEPTED THEY PASS CRITERION DIII IT IS NOT CERTAIN ANY WILL MEET ANOTHER OF THE REMAINING CONDITIONS. BRITISH MANAGEMENT WOULD SEEM TO OFFER THE BEST POSSIBILITY AND THE COMMITTEE SPENT SOME TIME ON THIS: THEY TOOK THE VIEW, DESPITE MY URGING A FLEXIBLE APPROACH, THAT THE BEST YARDSTICK, AND THE ONE ALREADY APPLIED TO MOST OF THE OTHER COMPANIES JUDGED ALREADY, WAS THE MAKE-UP OF THE BOARD OF EACH COMPANY, AND ACCEPTING AS BRITISH MANAGED THOSE THAT HAD A MAJORITY OF EXECUTIVE DIRECTORS WITH FULL BRITISH PASSPORTS.
3. THE COMMITTEE CAME CLOSE TO APPROVING WHARF SINCE THEY CONSIDER THE GROUP QUALIFIES UNDER SECTION DI AND ALMOST CERTAINLY UNDER SECTION DII. THE COMMITTEE HAS ASKED FOR MORE INFORMATION ON THE PERCENTAGE OF THE HOLDING IN THE GROUP HELD BY SIR Y K PAO AND THE OTHER MEMBERS OF HIS FAMILY HOLDING FULL BRITISH PASSPORTS. THIS IS THOUGHT TO BE IN THE REGION OF BETWEEN 30 AND 35 PER CENT. ONCE THIS INFORMATION IS RECEIVED WHARF COULD BE APPROVED.
4. THE HUTCHISON GROUP IS PROVING EVEN MORE DIFFICULT AND THEIR CASE HAS NOT BEEN HELPED BY THE GROUP'S FAILURE TO PROVIDE DETAILED INFORMATION ON MANAGEMENT AND SHAREHOLDINGS DESPITE
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CONFIDENTIAL
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