SECRETARY OF STATE'S MEETING WITH SIR CHARLES POWELL:
HONG KONG TAKKOVER CODE
Background
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Jardines have for some time been seeking exemption from the Hong Kong Takeover Code prior to 1997. This is a particular concern of Henry Keswick, who claims to fear any repetition of Chinese expropriation of Jardines' assets as happened in Shanghai in the 1940s.
On 28 May, Jardines made a public announcement that amendments would be introduced in Bermuda to the Jardine Matheson Holdings Act to incorporate the principle of the London Takeovers Code into the private company legislation governing the five Jardine companies. Jardines believe that with such provisions in the Bermuda law book, the companies could and should be regarded as if they were under the London Takeovers Code. The Securities and Futures Commission (SFC) have been informed by Jardines that the company would make an application for exemption from the Hong Kong Takeover and Mergers Code in due course, following enactment of the amendment legislation in Bermuda. In the meantime, there have been preliminary informal discussions between the SFC and Jardines.
SFC, who have taken a fairly negative view hitherto of Jardines' attempts to withdraw from the Hong Kong Code, have so far advised Jardines that they cannot see that the Bermuda proposal would make any substantial change to their position in Hong Kong. They argue that, as long as the substance of Jardines' business remains in Hong Kong, regulation from a distance would be a real problem. For example, in the case of a takeover bid for a Hong Kong business emanating from Hong Kong, all interested parties might have to be brought to Bermuda for hearings by courts and regulatory authorities unfamiliar with Hong Kong. SFC's present view is that it could not recommend to the Takeover Panel an exemption for Jardines without first seeking to amend the Takeover and Merger Code for which public consultation would be necessary.
No comments yet.
Private notes are available after approval.