24 Jan 2009
Sun Hung Kai Financial may be the first of several financial institutions to lose an award that honours their corporate social responsibility as a result of their involvement in the minibonds saga.
The Council of Social Service, which confers the annual Caring Company awards, is reviewing its decision to give the award to Sun Hung Kai, after its subsidiary Sun Hung Kai Investment Services was reprimanded by the Securities and Futures Commission for the way it sold the high-risk derivatives to customers.
Sun Hung Kai and more than a dozen banks accused of misleading vulnerable investors are understood to be among the winners who will be unveiled and honoured next month.
Cliff Choi Kim-wah, business director of the council, said the vetting committee would meet soon.
“Those being awarded know well that we reserve the right to strip them of their titles,” he said. A spokesman for Sun Hung Kai Financial declined to comment.
Christine Fang Meng-sang, chief executive of the council, said it was prepared to withdraw the honours if the banks were officially censured by relevant authorities, or if they were found to have committed criminal offences.
“We have received e-mails from some minibonds victims who were unhappy with the banks getting the award,” she said.
Any wrongdoing by the banks, however, could not wipe out the charitable work that they had done, she noted.
“ We can’t strike them off the award list just because people are protesting outside their branches. But we are prepared to review their awards if any of them is found by the authorities to have done wrong,” Ms Fang said.
The council will give out more than 1,700 awards this year to businesses and public organisations for demonstrating good corporate citizenship and their contributions in community work.
Among the 60-plus banks that were honoured last year, more than a dozen – including the Bank of China, DBS Bank and the Bank of East Asia – now face thousands of angry investors who are seeking compensation for their losses after the collapse of Lehman Brothers, which had issued or guaranteed the minibonds they bought.
Investors, some of them elderly, claimed the banks had lied about the investment risks when persuading them to buy the highly complex products. Many of them have filed complaints with the Monetary Authority, made police reports or resorted to the courts to seek redress.
Since the scheme was launched seven years ago, only one company has had its award withdrawn. No company with a criminal record or which has been officially censured by astatutory body in the previous three years can receive an award.
Lawmakers who are helping the minibond investors seek redress were outraged. Democrat Kam Naiwai said the council should rethink its awards plan.
“ How can these banks be so shameless and still have the guts to brandish the ‘caring company’ tag after conning old people into buying their poisoned minibonds?”
Audrey Eu Yuet-mee, leader of the Civic Party, said: “It is so ironic that the basics of a caring company, which is to care for the customers, are not reflected in the awards, while it recognises contributions to the environment and donations to charities.”
The Bank of China, Bank of East Asia and DBS all said their awards this year had nothing to do with the minibonds saga.
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