THE final act in the 10-year drama surrounding Jardine Matheson's bid to escape Chinese rule was played yesterday when the powerful hong announced that its shares would not be traded on the Hong Kong Stock Exchange from December 31. The widely expected move to de-list the stock was announced at lunchtime, provoking some rapid reaction from local regulators who have been refusing to compromise with the group. The move ends a drive by the company to remove itself from Hong Kong legal jurisdiction, beginning with its famous shift of domicile from Hong Kong to Bermuda in 1984. Group managing director Nigel Rich and director Sir Charles Powell stressed the group still planned to invest in Hong Kong. Sir Charles said: ''It is not a drama.'' Mr Rich added: ''While there may be some impact on our business in China, we do not think it will be of a significant nature.'' The group does about US$1 billion (HK$7.72 billion) of business in gross revenues with China. The decision to de-list the company, with a market capitalisation of $38.8 billion representing 1.66 per cent of total market capitalisation, is expected to be followed by the similar de-listing of Jardine Strategic Holdings. But the Securities and Futures Commission has warned that Jardines will still come under its rules, even after the de-listing, because it is a public company in Hong Kong. The group, whose interests range from the Mandarin Oriental hotel to Wellcome Stores and Hongkong Land to Jardine Fleming, yesterday announced profits up 23 per cent last year to US$388.8 million. A public statement from the princely hong with 150 years' history said they were de-listing because they could not come to an agreement with the territory's chief regulator, the Securities and Futures Commission (SFC), on exemption from local rules involving a takeover code. Chairman Henry Keswick said: ''After extensive discussions, the SFC has concluded that exemptions or general waivers from the Hong Kong code are not appropriate. ''In the circumstances, the board [of Jardine Matheson] has reluctantly decided that it should terminate the company's contractual link to the Hong Kong code by withdrawing its secondary listing on the Hong Kong Stock Exchange.'' The statement triggered a series of quickly arranged meetings and a flurry of statements by key players. Jardines shares were suspended from trading on the exchange in the afternoon. The stock fell $4.75 to $49.25 in the morning session. The Hang Seng Index, after a jittery morning, leapt 465 points to 9,456. At 3.30 pm Financial Secretary Sir Hamish Macleod expressed his regret and sadness at the de-listing decision. ''Over the past three years, all parties concerned - the company, the SFC and the Government - have spared no effort to address Jardine Matheson's concerns, while at the same time ensuring that investors' interests would be adequately protected and the integrity of our market would not be compromised,'' Sir Hamish said. Later in the day, a vice-director of local Xinhua (the New China News Agency), Zheng Guoxiong, criticised Jardines' move as ''very irresponsible''. ''Between now and 1997 and beyond, it will take our concerted efforts to maintain Hong Kong's status as an international financial centre,'' said Mr Zheng. ''We don't want to see companies failing to take into account Hong Kong's economic development and Hong Kong people's interests and take very irresponsible action,'' he added. Senior British trade commissioner Francis Cornish said it was a pity that agreement over Jardine Matheson's plans could not be reached. ''But we need to be clear what Jardine are doing. ''They are adjusting their listing arrangements. They are not pulling out of Hong Kong.'' At merchant bank Morgan Grenfell, director Andrew Hall said: ''This is not as critical to Hong Kong confidence as the decision to move to Bermuda in 1984 or the decision to have a primary listing in London in 1992.'' In a packed press conference at the penthouse suite of Jardine House, Mr Rich and Sir Charles defended the move. ''This is a decision related to our listing. It does not affect our business. It is not a drama,'' said Sir Charles. After re-domiciling in 1984, the company obtained primary listing status in London in 1992 and obtained a secondary special status in Hong Kong exempting them from regulation by the stock exchange. The SFC remained the chief regulator on takeovers because under British law companies domiciled outside the United Kingdom are not covered by Britain's takeover code. Bermuda's takeover code stipulates that anyone acquiring 30 per cent of a company's shares must make a general offer, whereas Hong Kong's trigger point is 35 per cent. Jardines is said to believe the Bermudan formula makes them less vulnerable to a takeover raid. Jardine Matheson supported the setting up of the takeover code in Bermuda and argued this meant they could obtain exemption from Hong Kong's code governing such transactions. The SFC could not agree to this and as a public company, whether listed or not, maintained that it remained within Hong Kong jurisdiction in takeovers and mergers. SFC chairman Robert Nottle said takeover regulation from Bermuda was not practical because it was the other side of the globe and it did not sufficiently protect the interests of shareholders. The request for exemption was to create a unified British-based system of securities regulations governing the group companies. The objective reflects the company's British origins and its international character, the company said. Sir Charles denied the decision to de-list was linked to fears of what might happen to the group when territorial sovereignty goes to China. In his statement, Mr Keswick said: ''I would emphasise that our decision is related to the regulatory position of the company and does not signal any lack of confidence in the future of Hong Kong itself.'' ''Now that a new era is beginning we are as confident as ever in Hong Kong's future as a special administrative region of the Peoples Republic of China. ''We are today one of the largest investors in Hong Kong as well as being its largest private employer and we wish to continue to expand our investment in and business links with Hong Kong, China and the whole of Asia Pacific region.''