BARING Securities stands to lose millions of pounds of business in the face of a revolt from some of Britain's biggest life houses - among them the oldest investors in Hong Kong stocks.
All of the houses are holders of Barings convertible preference stock and subordinated loan paper which, under the GBP660 million (about HK$8.1 billion) agreement for Barings devised by the Dutch bank-insurer, Internationale Nederlanden Groep (ING), stand to receive nothing in terms of compensation.
The holders of the paper, ranging from institutions based in the offshore tax haven of Jersey to the large insurers and fund managers in Scotland, are counted among the oldest players in emerging markets, whose transaction orders for the region have been channelled through Baring Securities massive operation in Hong Kong for years.
Barings' operations in some other countries could be similarly hit.
Baring Securities is the dealing and trading arm of the collapsed bank.
The British institutions are all incensed by the lack of any recognition of their holdings in the convertible and long-term loan paper, and said that pending a satisfactory resolution of the problem they were suspending all business with Baring Securities.
