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suggests that those foreign corporations (viz., Intercontinental,
Traveluck, Double Wealth, Merit, Pempire, and Forward) could not
have made direct loans to Radcliffe and BOT. Indeed, the record
indicates that one such loan was made by Intercontinental to
Radcliffe.96
With respect to Pioneer and its subsidiaries Multi-Credit
and Mandalay, as petitioner admits on brief, Hong Kong corporate
law prohibited them from making direct loans to Radcliffe. Sec.
157H(2), Companies Ordinance of Hong Kong. Petitioner also
concedes on brief that Hong Kong corporate law prohibited those
corporations from pledging collateral for loans to Radcliffe by
the U.S. banks in question. Because either form of assistance to
Radcliffe by Pioneer and its subsidiaries Multi-Credit and Man-
dalay was prohibited by Hong Kong corporate law, petitioner
cannot, and does not, argue that the transactions involving those
corporations took the form that they did in order to comply with
the requirements of Hong Kong corporate law.97
96 A financial statement of Radcliffe, dated Mar. 31, 1985, and
signed by petitioner, indicated that Intercontinental had a loan
outstanding in the amount of $1,625,000 to Radcliffe and that a
loan from Bangkok Bank LA branch to Radcliffe, presumably BB Loan
No. 2, was to be used to replace that loan from Intercontinental.
97 However, petitioner does contend on brief, relying in part on
his testimony, (1) that he replaced a direct loan from Pioneer to
Radcliffe with a loan from Union Bank (viz., the UB $1,300,000
loan) that was secured by a certificate of deposit in the name of
Mandalay because he believed that that form created a less
obvious conflict with Hong Kong corporate law and (2) that
Pioneer and its subsidiaries Multi-Credit and Mandalay also
(continued...)
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