HONG KONG -- Bermuda-based Hong Kong trading house Jardine Matheson Holdings dismissed a local newspaper report yesterday that negotiations with Hong Kong's securities watchdog have stalled and the group may respond by delisting its companies from the local exchange in retaliation.

"We are in discussion with the SFC (Securities and Futures Commission) in regard to the relationship between the Hong Kong code and the new statutory Bermuda code and those discussions are still continuing,'' Jardine Matheson spokesman Neil MacNamara said by telephone.

The English-language Eastern Express reported that Jardine had failed in its long-running bid to persuade the SFC to grant it exempt status from Hong Kong's takeovers code.

As a result, the paper said, the company's main board will discuss later this week whether to delist its six companies, which make up nearly seven percent of market capitalisation.

It said senior stockholders were fearful of China's intentions for the company after the 1997 handover and worry the Keswick family's less than 10 percent shareholding will not prove sufficient to maintain control.

MacNamara declined to comment on the newspaper report.

In 1984, Jardine shifted its domicile to Bermuda ahead of the 1997 handover of Hong Kong to China.

Though dozens of companies, including several controlled by pro-Beijing tycoons have followed suit, many believe China, which has pledged to permit Hong Kong's capitalist ways to continue unchanged for 50 years after the transfer, will not forget the snub.

Jardine has fought a long battle with the SFC and Stock Exchange for an "exempt'' listing under which its shares would continue to be traded in Hong Kong but London stock market regulations would take precedence over Hong Kong's codes.

It has previously threatened to delist but has gone no further than to switch its primary listing from Hong Kong to London in 1992.

"The Bermuda code is based on the London code and the view of the company is that we should harmonise our regulations with the regulatory authorities in London and Bermuda,'' MacNamara said.

"The aspect of the takeover code has been a matter of discussion for several years, and was specifically referred to at our shareholders meeting in December.'' -- Reuter