High-risk investor was told 'government would step in'

PUBLISHED : Wednesday, 16 May, 2012, 12:00am
UPDATED : Wednesday, 16 May, 2012, 12:00am


A wealthy DBS client who says she was misled into buying high-risk derivatives told a court that a customer relations manager had said the government would intervene if the market fell drastically.

Hao Ting, a Beijing businesswoman, was testifying under questioning by the bank's lawyer, Jat Sew-tong SC, in the Court of First Instance yesterday.

DBS Bank (Hong Kong) is suing Hao and her company, San-Hot HK, for repayment of more than HK$90 million that Hao lost on accumulators, an investment product, in the market crunch five years ago.

The case is the first known court hearing in Hong Kong in a dispute over accumulators, which critics have dubbed 'I kill you later'.

An accumulator is a high-risk vehicle in which investors buy a security, currency or commodity at regular intervals, at a fixed price below the prevailing market value for the term of the contract.

They make money if the market stays stable or rises, but losses can be huge if it falls steeply.

Hao's lawyers earlier told the court that the bank manager, Santos Wong Wai-yip, and his colleagues approached Hao repeatedly to introduce her to investment products.

'I'm sure Mr Wong did say it - he said the Hong Kong government would intervene to salvage [the market],' Hao recalled. 'He said it not just once. He went on to say that in the financial crisis of '97, the government took the initiative in intervening.'

Jat, the bank's lawyer, noted that Wong was a relationship manager and not the Hong Kong financial secretary, to which Hao replied: 'Right, but he's a [member of the bank's] staff; he's an adviser, a consultant for managing my wealth.'

Hao initially thought an accumulator was a 'discounted share', she said. 'Later, I realised ... one might not be able to stop it. If it can't be stopped, it can wipe away one's assets and belongings.'

Yat said Hao was an experienced businesswoman. He put it to her that, after doing well with two purchases of accumulators, she had gone back for more of her own accord. 'This was not because of Mr Wong; it was because you had tasted success.'

Earlier, the court heard that Hao had studied computer software to university level and had worked at a Sinopec subsidiary for 11 years before starting her own business.

The hearing continues before Mr Justice Jason Pow Wing-nin.