HSBC's head honchos, chairman Douglas Flint and chief executive Stuart Gulliver, submitted themselves to humiliating self-criticism recently in Britain's parliament.
The two were summoned to the parliamentary commission on banking standards. HSBC's structure "was not fit for purpose for a modern world", Gulliver told the commission. "To be honest, our geographic footprint became very attractive to transnational criminal organisations, whether they are terrorist in origin or criminal in origin," he added.
HSBC was fined US$1.9 billion (HK$14.7 billion) for its lax money laundering controls in its US banking operations. The problem centred on Mexico, where its operations were liberally used by drug cartels. HSBC had bought a Mexican bank, but "there were things we were not aware of, standards we believed were being applied that were not", Flint told the commission.
Lai See recalls a senior HSBC banker saying much the same thing when asked how it was that HSBC got into such a mess with subprime lending in the US. "We had no idea what they were up to," the banker told us.
Bank bonuses a force for good
Gulliver and Flint also raised a few eyebrows at the parliamentary commission on banking standards with their defence of bonus payments that could be many multiples of the basic salary.
"I think properly used it is very powerful for the good," Flint said. This was so apparently because it enabled the bank to demand that its employees act in accordance with certain values as well as meeting performance standards. He went on to say that "this gives protection to shareholders and the company and to the system generally".
This defence of bonuses did not go unchallenged by the commission, with one member pronouncing the system "completely weird". Pat McFadden noted that star football players like Barcelona's Lionel Messi received exceptional awards because they would be impossible to replace, adding somewhat tartly, that bankers "are more replaceable than they think".
You want ice with that?
Australian billionaire Clive Palmer is coming to Hong Kong to promote his plan to build a replica of the ill-fated Titanic in a mainland shipyard. He has already signed a first-stage agreement with the Nanjing-based CSC Jinling Shipyard to build the ship as part of a planned fleet of luxury liners.
Palmer is holding a press conference in Hong Kong next Saturday, to be followed by a gala dinner in Macau at which both the menu and the entertainment will represent what first-class passengers experienced on the original Titanic in 1912. It's one of a series of dinners taking place around the world to celebrate the Titanic.
We hope that Palmer's lawsuit against Citic Pacific in connection with the Sino Iron project in Western Australia's Pilbara region won't have any bearing on the success of this project. As we have noted before, suing Citic Pacific is like suing the Chinese state, which generally does not take kindly to this sort of behaviour.
Another possible drawback for the project is that it is considered seriously bad luck among seafarers to celebrate the Titanic since its tragic sinking. Such is the wariness with which the Titanic is viewed, some people in the industry wonder if Palmer will be able to attract seamen to crew the vessel.
Rugby chic with Shanghai Tang
Shanghai Tang, the purveyor of Chinese luxury chic, is giving rugby fans the opportunity to buy the most expensive rugby shirts in town.
It is partnering with the Shanghai Rugby Football Club to produce a collection of rugby shirts that commemorate the so-called interport rugby matches which took place among the Treaty Ports in the early 20th century. So there's the Shanghai Rugby Shirt which is a replica of the shirt worn during the club's match against the Hong Kong Football Club in 1939, and the Hankow 1921 series, which commemorates the first interport matches played after the first world war in 1921 between Shanghai and Hankow (present-day Wuhan).
The shirts cost HK$1,280 each and for each sale Shanghai Tang will make a donation to the Shanghai Rugby Football Club "to help preserve and continue its cherished history".