THE Castle Peak Power Company Ltd owes its origins in a peculiar way to threats in the late 1950s and early 1960s by the British Conservative Government to nationalise China Light and Power (CLP). CLP's chairman, Lawrence (now Lord) Kadoorie, came up with the concept of forming a new company in conjunction with American-owned Esso, the trade name for the overseas operations of parent company Exxon. This new company, to be called the Peninsula Electric Power Co Ltd (PEPCO), would produce electricity to be sold exclusively to China Light, which was developing its markets in China. Esso would own 60 per cent of the company and China Light 40 per cent. The British Government said it was happy with the start-up terms of PEPCO, which permitted reasonable fuel tariffs and an adequate return for shareholders, and withdrew its threat of nationalisation. PEPCO was set up in December 1964 and its success led to further joint ventures along similar lines and led eventually to the setting-up of the highly profitable Castle Peak Power Company Ltd in July 1981 to own Castle Peak 'B' power station. Again, Exxon got 60 per cent of the shares and CLP 40 per cent but CLP possessed proprietorial control. The allegations by Michael Ford were denied at Exxon Corporation's headquarters in Irving, Texas. Company spokesman Al Vella said Exxon would vigorously defend itself against the action. He added that as the case involved a power station operated by a Hong Kong incorporated company, Hong Kong and not Texas was the correct venue for the lawsuit.