DBS officer 'played up' investor's experience

A customer relations manager at DBS Bank played up an investor's experience and invented details of her assets so he could report that a high-risk investment product was suitable for her, a court heard yesterday.

Russell Coleman SC told the Court of First Instance that Santos Wong Wai-yip and colleagues at DBS made more than 200 calls to his client, mainland investor Hao Ting, between July and November 2007 to introduce her to new investment products.

Hao, who lives in Beijing, is being sued by DBS for more than HK$90 million she lost on accumulators during the credit crunch five years ago.

An accumulator is a high-risk investment vehicle under which investors buy a security, currency or commodity at regular intervals at a fixed price below the prevailing market value for the term of the contract, typically a year. They make money if the market stays stable or rises but if it falls steeply, losses can be huge. Hao's case is believed to be the first Hong Kong court dispute about accumulators.

Wong joined DBS from Citigold, where Hao had been his client since April 2006. The day after he started his new job in July 2007 he flew to Shanghai and Beijing to recruit clients, including Hao.

During the third day of the hearing, Hao challenged the accuracy of DBS records, prepared by Wong and his colleagues, which claimed that she had between six and 11 years' of investing experience. Coleman said the fact Hao did not open a Hong Kong bank account until 2003, no more than four years before the record was created, went contrary to that claim.

Hao had been asked to signed a declaration that an investment company she was going to set up, San-Hot HK Industrial Company, was a 'professional investor', even though it was not established until 11 days later on August 14, 2007. Wong sold Hao an accumulator the next day.

'Without the declaration signed by Ms Hao, you [Wong] would not have been able to sell to her the disastrous accumulator,' Coleman said.

The bank's records also said Hao had HK$93 million assets and provided a breakdown in equity, properties and cash. Coleman said Hao had not provided such details to the bank.

Under cross-examination, Wong said the estimate of Hao's assets came from his communications with her. He agreed he knew Hao had 'little or no knowledge' about margins, leverage and derivative products.

The trial continues today.