HKCB 'viable' crumbs draw players' ire

The market has quite predictably trashed the claim by the Lippo Group that it retained a viable business among the crumbs left on the table of HKCB Bank Holding after the sale of its major asset, the Hongkong Chinese Bank.

The claim that a viable rump would remain in HKCB after its majority shareholder Lippo had agreed to sell the bank was essential in order to satisfy Rule 14.35 of the stock exchange's listing rules.

That rule states that, 'an issuer or group [other than an investment company], whose assets consist wholly or substantially of cash or short-dated securities and which thus ceases to trade, will not normally be regarded as suitable for listing'.

Lippo's argument - crucial in allowing it to sell the bank rather than the entire holding company, which would have triggered an offer to minorities - was that the small stock brokerage, money-lending operation and advisory service left behind, represented a viable business.

To say that eyebrows were raised by the claim would be to understate the angry response of analysts and minority shareholders - who were not made a general offer since what was involved was an asset disposal rather than a takeover.

In the six months to June 30 last year, the group reported a net profit of HK$115 million - and the bank that it proceeded to sell was responsible for more than 90 per cent of those earnings.