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Hong Kong investors demand split from HSBC: shareholder group pulls advertisement in newspaper and demands change
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HSBC is under renewed pressure to spin off its Asian business after a group of Hong Kong-based small investors ran a newspaper ad calling for change.
Ken Lui, a shareholder who leads the group, is pushing for a resolution to be tabled at the bank’s annual general meeting in April calling for the pre-pandemic dividend and plan to be reinstated for the split.
The ad stated that HSBC is ‘underperforming its peers, in violation of dividend obligations [and] ignores the interests of shareholders’.
Split decision: HSBC’s Hong Kong headquarters. A group of small investors is demanding that the bank spin off its Asian operations
An attempt for UK-based HSBC to spin off its Asian business, where it makes most of its money, began this year.
Prominent shareholder Ping An, a Chinese insurer, last month called for a break-up and job cuts to cut costs.
Lui, founder of the Hong Kong Investor and Entrepreneur Institute, said he contacted 500 shareholders as part of his campaign.
He did not contact Ping An, but said he would welcome him to the campaign.
Lui said that under UK company law, 100 minority shareholders could work together to propose a resolution.
HSBC’s large retail investor base in Hong Kong was upset when the Bank of England banned lenders from paying dividends during the pandemic.
It has now resumed payouts, but they are less frequent and generally smaller than before.
HSBC has resisted calls for a spin-off.
It read: ‘From the conversations we’ve had with other institutional investors, it appears that they also don’t believe there’s an economic case for splitting.’
Shares fell 1 percent or 5.05 pence to 492.65 pence yesterday.