Chase around and give Scrooge a good name

PUBLISHED : Wednesday, 03 May, 1995, 12:00am
UPDATED : Wednesday, 03 May, 1995, 12:00am

WE make no apologies for returning to the case of Wendy Lau and Chase Manhattan Bank, and the bank's insistence that Wendy should be paying interest even after she's repaid the loan.

This is one of those obviously unfair practices that, once it's stopped, no one can believe ever took place, so unlikely does it sound.

Wendy told the bank she'd pay off her mortgage on her flat in Whampoa Gardens on the April 6. In full. In cash. Finito.

But Chase Manhattan said it would charge her interest up to April 13, the date her next repayment fell due, thus squeezing an extra $3,500 out of her.

They were charging interest on a loan actually repaid, and it's their policy to do so.

For the average mortgage and the average timing, Chase will make $17,000.

This is the explanation she got from Chase: 'Basically, mortgages are funded through taking both long-term and short-term deposits from the market and Interbank.

'With an early redemption of a long-term loan our bank will have a funding excess which it has to dispose of.

'Similarly, an early redemption of a long-term deposit will draw an interest penalty.

'The latter is stipulated in the 'Rules on interest rates and deposit charges' issued by Hong Kong Association of Banks.

So Chase is trying to make it sound as if it's the fault of global financial markets - indeed, they hint that Hong Kong banking regulations make it compulsory.

Nice try, Chase. In fact, neither Standard Chartered nor Hongkong Bank has this policy, despite having the same markets and the same regulations.

Perhaps Chase ought to try a more believable explanation: 'Even though it's not fair, it was in the small print of the contract. So pay up and smile.' Disastrous COMPUTER types who turned up at a seminar by data storage firm EMC got a surprise yesterday.

It was held at the Grand Salon of the Grand Hyatt, which naturally enough costs a grand fee to hire. But they discovered it looking like a complete mess.

EMC make data storage devices designed to serve as remote backups after a disaster, so staff were dressed like rescue workers, the Hyatt's upmarket paintings were covered by wrecked corrugated iron, the lights were off etc.

They could have achieved the same effect free by allowing the room to be used first by some visiting English soccer fans. Or tried to use a room at the Hilton.

Wanna bet? 'RENAULT bets local buyers $500 that they will go for its cars' is the latest puff from Renault, who are offering the following deal: test drive a Renault, and if you buy a car this year - Renault or non-Renault - they'll give you $500.

Errr, isn't betting illegal in Hong Kong except at the government-sponsored old boy betting shop known the the Royal Hong Kong Jockey Club? However, we think that Renault's deal isn't really betting. It's actually more akin to a derivative, a form of hedging on the outcome of a car purchasing decision.

It's a comment on the reputation of the derivatives business that Renault would rather be known as a dodgy betting shop than a derivatives operation.

We hear one very major Hong Kong bank has responded to the Barings collapse in a true market-led fashion by simply renaming their derivatives department 'financial products' without, of course, changing the nature of its business in any way.

Bank on it IS it the humidity that's brought them out? We don't know, but there sure seem to be a lot of directory publishers making appearances on fax machines over the past few weeks.

Latest is Almanac World Bankers Directory, which has been sending out faxes which look as if they're just checking addresses and telex numbers.

Study the microprint, though, and bankers will discover that by correcting their address they've just signed up for two entries a year all the way up to the year 2000, each entry costing US$998, a total of about $10,000.

There'd be an element of justice if Chase Manhattan were caught by this one because it's the same principle as the one in their mortgage contract.

Jeremy Claus ANY male who frequents the bar supplied at taxpayers' expense in the Supreme Court will discover the following topical comment in the toilets: Q: Why is Santa Claus different from Jeremy Mathews? A: Santa Claus is a mean old b*gger who doesn't give lawyers $17 million.