Jake's View | Here is everything you need to know about the great MPF rip-off
The sale of Standard Chartered’s MPF business to Manulife and the strange reluctance of the two to disclose the price is very revealing
The company [Manulife International] had acquired StanChart’s MPF ... business in September 2015, without disclosing the price.
Business, November 17
This deal has now finally closed, more than a year later, and still both Manulife and Standard Chartered are strangely reluctant to disclose the price.
You would think that as public companies they would have an obligation to inform their shareholders at least. After all, this is a significant transaction and regulators are big on making listed companies report such things.
Never mind. A birdie tells me the price was
US$400 million and I trust my birdie. If either party says the birdie lies, well, tell us then what the real price was, nice and loud, please.
Let’s do some simple arithmetic. We shall call
US$400 million the equivalent of HK$3.1 billion and StanChart reportedly had 2.4 per cent of the Mandatory Provident Fund market. My calculator tells me that if 2.4 per cent is worth HK$3.1 billion then 100 per cent is worth HK$129 billion. And now we have the secret of why these two are so reluctant to talk about the price of their deal. That sum of HK$129 billion tells you that the MPF is a gigantic rip-off targeted at the working people of Hong Kong and that both Manulife and StanChart know it.
How much should these MPF businesses be worth, you ask? Answer: HK$1. If our government had structured the MPF properly instead of creating a pillage pot for the private fund managers to whom it assigned the task of running the money, then these private managers would have found the business returning them just enough profit to make continuing it worthwhile, and not HK$1 more. But we won’t quibble about that HK$1.