Lai See

Hong Kong Airlines: not the best but blessed

PUBLISHED : Friday, 07 September, 2012, 12:00am
UPDATED : Friday, 07 September, 2012, 9:17am

Readers will know that Hong Kong Airlines has suffered some turbulence recently - racking up bills with the Airport Authority; banned from using air bridges (which means it has to bus passengers to the terminal building); refused permission by the Civil Aviation Department from increasing flights; irritation on the part of passengers at the sudden cancellation of flights … and so on. Recently it announced it was stopping its business-class only long-haul flights to London.

However, measures have been taken to improve matters. We understand that Chen Feng, the chairman of HNA, the airline's parent company, has decreed that all Hong Kong Airline's aircraft should carry in their cockpits an image of the Avalokitesvara, a Buddhist image. It may not be a great airline, but now it is at least a blessed one.

Can you invest?

The Securities and Futures Commission says it has commenced criminal proceedings against Pacific Sun Advisors and its director Andrew Mantel in relation to four counts of issuing advertisements to promote a collective investment scheme without the authorisation of the SFC.

We see that the firm has two senior advisers who, in their different ways, are colourful characters. Marc Faber has built up a reputation as a canny contrarian investment adviser who despite his cheerful demeanour has acquired the sobriquet Dr Doom, and his newsletter The Gloom Boom & Doom Report is widely read.

The other adviser is chef Martin Yan who made a name for himself with his cooking programme Yan can cook. His inclusion as senior adviser is a bit of a surprise. We know he can cook but can he invest?

Dirty driving

We've been appalled at the recent spate of high-profile carnage involving Ferraris driven by the offspring of high-profile persons. There was the recent report of the black Ferrari that crashed in Beijing and later turned out was driven by Lin Gu, son of President Hu Jintao's right-hand man, Ling Jihua. Then in Thailand, Vorayuth Yoovidhya, grandson of the late billionaire founder of the Red Bull empire, hit and killed a policeman while driving his Ferrari. He tried to make out he wasn't the driver.

It reminds us of Canto-pop star Nicholas Tse Ting-fung who crashed his Ferrari in 2002 in Cotton Tree Drive and served time for obstructing the cause of justice. One conclusion to be drawn from this bad behaviour is that you know you've arrived when your offspring are crashing their Ferraris.

Banks courting problems

We were startled to see that between 2010 and the second quarter of 2012, Citi, Bank of America, and JP Morgan have taken nearly US$29 billion to build litigation reserves, according to Financial News, citing regulatory filings. This is more than a third of their combined net income for the same period.

In addition, the banks spent an additional US$4.5 billion during this period on legal expenses. This figure doesn't include additional reserves created for special situations such as the repurchase of shoddy mortgages. Bank of America has US$16 billion set aside for this.

In addition to dealing with subprime-related issues, the three banks have admitted that they are subject to investigations related to Libor which analysts say could collectively cost the banks between US$10 billion and US$200 billion.

Dpa goes off the record

Deutsche Presse-Agentur, the German news agency once fondly known for its wild and wacky global coverage of offbeat news, has become no laughing matter among its Asian bureaus and correspondents. The agency, recently adopted a more high-brow approach towards its coverage, focusing more on the trade and business news in an attempt to compete with its more well-resourced rivals such as Reuters and Bloomberg, but is now swinging the axe.

The Hong Kong bureau and its full-time Hong Kong correspondent have been chopped after more than 12 years, and the Taiwan operation in Taipei has also seen its ranks cut from two to one. With a reduction in news being produced from the region, staff at the agency's main regional bureau in Bangkok fear they are next in line for a spot of Teutonic trimming.