Opinion | Trust product sounds great, so long as you don't ask questions
It promises high returns with big-name backing, but a scheme touted at Ping An Bank highlights murky world of mainland investment offerings
Yuan accounts with mainland banks that bear high interest rates are increasingly popular in Hong Kong. So are the pitches of various investment proposals e-mailed or texted to depositors by bank sales staff.
Ever wonder how credible those products are? A friend of Money Matters, George, has a tale to share. Last year, a sales staffer at Ping An Bank, emailed him an investment proposal titled Ping An Wealth - Handan Hyundai Modern Logistic Port Project.
Hyundai? The South Korean conglomerate? That's interesting. George clicked on the e-mail to find a trust scheme that promised a fixed annual return of 9 per cent to 11 per cent over two years. It was looking for a total investment of 1.2 billion yuan (HK$1.5 billion).
The scheme looked real. The proposal said the project involved an investment by Hyundai RNC Investment, which was fully owned by Hyundai Engineering and Construction (Hyundai E&C) - an arm of Hyundai Group.
Where the money collected from this proposal will end up is anybody’s guess
Hyundai RNC guaranteed repayment with cash flow from Hyundai (Handan) International Auto Trade City, a US$1 billion project that included apartments, offices and hotels, according to the proposal seen by Money Matters.