The difference is between rights to ownership and rights to usage. The owner can allow anyone to enjoy usage of it, bankrupt of not.
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KNN Writ Of Seizure For CC Debt Less than 10K
- Thread starter ccbscb
- Start date
The difference is between rights to ownership and rights to usage. The owner can allow anyone to enjoy usage of it, bankrupt of not.
that's right. he deserved it. 10K also cannot pay??? WTF. probably lazy and expect charity. can easily work out an installment plan with bank. such a bornloser deserved to be made a bankrupt . why don't he stop complaining and goes to loan sharks instead since the banks are too heartless. the loan sharks are better. they don't repo your possesions
the loan sharks are better. they don't repo your possesions
Agree, they just vandalise your property. At least you can still re-paint the affected walls and doors, change new locks etc.
chow chee bye you better ask your chee bye temasek stanchart kakis to prepare for war already paid up still asking for more
Must be something to do with you paying up your bills on time?
But how could Standchart be so heartless as to sue the losers who incur credit card bill and are unable to pay? Isn't the bank supposed to have a heart and let these losers off?
Independent.co.uk
Standard Chartered did dummy deals'
Monday, 8 March 1993
BOMBAY (Reuter) - A new report on India's biggest financial scandal accuses two foreign banks of transacting dummy deals to cover up losses or camouflage transactions by favoured Indian brokers.
The report from the Reserve Bank of India (RBI) exposes what it calls the nexus between Indian brokers and two foreign banks, Standard Chartered and Australia and New Zealand Banking Group's ANZ Grindlays Bank.
The report accuses Standard Chartered of entering into 'wholly fictitious transactions' to cover up an ever-increasing number of unaccounted deals on its investment portfolio.
It alleges that Standard Chartered's dealers handed over de facto running of its securities operations to a prominent Indian broker, Hiten Dalal. They looked to Dalal to bail them out for big losses they incurred. 'As a consequence of this loss of independence, the safeguards customarily used in securities transactions were abandoned.'
The report says ANZ Grindlays violated its guidelines by financing certain stock market operations, as well as helping out a favoured broker, Harshad Mehta, by putting through a number of dummy transactions.
ANZ refused to comment, but a spokesman for Standard Chartered said some of the report was misleading, particularly the conclusion that senior managers were aware of the fraud.
Barry Northrop, who heads a Standard Chartered team trying to recover the bank's losses in the scandal, said the fictitious deals were created without the knowledge of senior management and in defiance of both internal and RBI guidelines. Individuals involved had been dismissed and procedures tightened.
Standard Chartered is suing Citibank to recover dollars 41m it alleges it lost in the scandal.
Standard Chartered did dummy deals'
Monday, 8 March 1993
BOMBAY (Reuter) - A new report on India's biggest financial scandal accuses two foreign banks of transacting dummy deals to cover up losses or camouflage transactions by favoured Indian brokers.
The report from the Reserve Bank of India (RBI) exposes what it calls the nexus between Indian brokers and two foreign banks, Standard Chartered and Australia and New Zealand Banking Group's ANZ Grindlays Bank.
The report accuses Standard Chartered of entering into 'wholly fictitious transactions' to cover up an ever-increasing number of unaccounted deals on its investment portfolio.
It alleges that Standard Chartered's dealers handed over de facto running of its securities operations to a prominent Indian broker, Hiten Dalal. They looked to Dalal to bail them out for big losses they incurred. 'As a consequence of this loss of independence, the safeguards customarily used in securities transactions were abandoned.'
The report says ANZ Grindlays violated its guidelines by financing certain stock market operations, as well as helping out a favoured broker, Harshad Mehta, by putting through a number of dummy transactions.
ANZ refused to comment, but a spokesman for Standard Chartered said some of the report was misleading, particularly the conclusion that senior managers were aware of the fraud.
Barry Northrop, who heads a Standard Chartered team trying to recover the bank's losses in the scandal, said the fictitious deals were created without the knowledge of senior management and in defiance of both internal and RBI guidelines. Individuals involved had been dismissed and procedures tightened.
Standard Chartered is suing Citibank to recover dollars 41m it alleges it lost in the scandal.
Bank implicated in sanctions-busting scandal
Written by IRENE MOYO
Saturday, 11 December 2010 13:33
HARARE – British-based financial institution Standard Chartered has again been sucked into the controversy surrounding the busting of European Union sanctions against Zimbabwe amid allegations that it has been giving loans to President Robert Mugabe’s allies through syndicated facilities offered by non-EU banks. (Pictured: A Standard Chartered bank branch in China)
Influential political think-tank Africa Confidential said Standard Chartered has been routing loans through local banks in Zimbabwe as well as the African Export Import Bank (Afreximbank) and the Eastern and Southern African Development Bank (PTA Bank) in order to circumvent sanctions which the EU renewed for another year in February.
Under the sanctions, no European companies are allowed to do business with Mugabe and more than 200 officials and organisations linked to his Zanu (PF) party. “As Harare steps up pressure for the European Union to abandon its sanctions on Zimbabwe, it has emerged that a British-based bank has found a legal way to circumvent the ban on loans to President Robert
Mugabe’s allies,” the think-tank said.
The Reserve Bank of Zimbabwe (RBZ) Governor Gideon Gono revealed in July that Standard Chartered, Afreximbank, PTA Bank and a Chinese tobacco trader Tian Li were responsible for at least US$442.5 million in lines of credit approved by the RBZ which had gone to 23 Zimbabwean companies this year.
Gono, himself under EU sanctions, wrote: ‘Due to sanctions Standard Chartered Bank London mainly lends through syndicated facilities through Afreximbank (affiliated to the African Development Bank) and the PTA Bank (East and Southern African Trade and Development Bank).’
Standard Chartered however says all lending conformed to EU sanctions and was done through its wholly-owned subsidiary, Standard Chartered Zimbabwe. Afreximbank says Standard Chartered had a $50 million revolving credit facility which it lent to the Zimbabwe cotton company AICO, formerly Cotton Company of Zimbabwe. Sylvester Nguni, Minister of State to Vice President Joice Mujuru and also under EU sanctions, is an AICO shareholder.
Gono is also a shareholder through his investment in Sakunda Energy, a petroleum distribution company, as is Mujuru’s husband Solomon, also under sanctions, through various nominees, says a source close to AICO. According to Africa Confidential, Mujuru’s partners are hotel and banking tycoon Farai Rwodzi and Zanu (PF) Mashonaland East chairman and former provincial governor Ray Kaukonde.
Standard Chartered was in 2008 at the centre of another Zimbabwe sanctions inquiry by the British Foreign Office for allegedly
breaching EU sanctions on Zimbabwe. The bank was at the time said to be one of three British-based groups that allegedly provided an estimated US$1 billion in direct and indirect funding to Mugabe's administration.
Together with Barclays Bank and the insurance firm Old Mutual, the banking group was accused of continuing to provide an economic lifeline to the regime. They were accused of providing loans to senior members of Mugabe's government running farms grabbed by mobs organised by his Zanu (PF) party. Many of the farms, previously white-owned, were distributed to leading figures in the regime rather than to landless black Zimbabweans.
Written by IRENE MOYO
Saturday, 11 December 2010 13:33
HARARE – British-based financial institution Standard Chartered has again been sucked into the controversy surrounding the busting of European Union sanctions against Zimbabwe amid allegations that it has been giving loans to President Robert Mugabe’s allies through syndicated facilities offered by non-EU banks. (Pictured: A Standard Chartered bank branch in China)
Influential political think-tank Africa Confidential said Standard Chartered has been routing loans through local banks in Zimbabwe as well as the African Export Import Bank (Afreximbank) and the Eastern and Southern African Development Bank (PTA Bank) in order to circumvent sanctions which the EU renewed for another year in February.
Under the sanctions, no European companies are allowed to do business with Mugabe and more than 200 officials and organisations linked to his Zanu (PF) party. “As Harare steps up pressure for the European Union to abandon its sanctions on Zimbabwe, it has emerged that a British-based bank has found a legal way to circumvent the ban on loans to President Robert
Mugabe’s allies,” the think-tank said.
The Reserve Bank of Zimbabwe (RBZ) Governor Gideon Gono revealed in July that Standard Chartered, Afreximbank, PTA Bank and a Chinese tobacco trader Tian Li were responsible for at least US$442.5 million in lines of credit approved by the RBZ which had gone to 23 Zimbabwean companies this year.
Gono, himself under EU sanctions, wrote: ‘Due to sanctions Standard Chartered Bank London mainly lends through syndicated facilities through Afreximbank (affiliated to the African Development Bank) and the PTA Bank (East and Southern African Trade and Development Bank).’
Standard Chartered however says all lending conformed to EU sanctions and was done through its wholly-owned subsidiary, Standard Chartered Zimbabwe. Afreximbank says Standard Chartered had a $50 million revolving credit facility which it lent to the Zimbabwe cotton company AICO, formerly Cotton Company of Zimbabwe. Sylvester Nguni, Minister of State to Vice President Joice Mujuru and also under EU sanctions, is an AICO shareholder.
Gono is also a shareholder through his investment in Sakunda Energy, a petroleum distribution company, as is Mujuru’s husband Solomon, also under sanctions, through various nominees, says a source close to AICO. According to Africa Confidential, Mujuru’s partners are hotel and banking tycoon Farai Rwodzi and Zanu (PF) Mashonaland East chairman and former provincial governor Ray Kaukonde.
Standard Chartered was in 2008 at the centre of another Zimbabwe sanctions inquiry by the British Foreign Office for allegedly
breaching EU sanctions on Zimbabwe. The bank was at the time said to be one of three British-based groups that allegedly provided an estimated US$1 billion in direct and indirect funding to Mugabe's administration.
Together with Barclays Bank and the insurance firm Old Mutual, the banking group was accused of continuing to provide an economic lifeline to the regime. They were accused of providing loans to senior members of Mugabe's government running farms grabbed by mobs organised by his Zanu (PF) party. Many of the farms, previously white-owned, were distributed to leading figures in the regime rather than to landless black Zimbabweans.
QDII Losses Tied to Alleged Corruption Scandal at Standard Chartered
By Zhao Hongmei TEXT: small | medium | largePublished: 2009-11-23 Cover, Issue 444, November 18, 2009
Translated by Tang Xiangyang
Original Article: [Chinese]
Chinese investors who took advantage of the country's qualified domestic institutional investors (QDII) scheme, a program that allows domestic institutions and residents to invest in offshore markets, suffered huge losses when the financial crisis hit international markets last year.
The losses sparked a huge number of complaints from investors who claimed that the banks had not informed them of the risks associated with the overseas investments. The banks involved, many of them the domestic branches of large multinationals, argued that they had done nothing wrong and that all investments are inherently risky.
However, according to an inside source at an investment bank, many of these losses might have had more to do with suspect products being sold by a corrupt banker inside the Standard Chartered Bank (China), than the market turmoil of the past year.
QDII Investment Losses
The QDII program was launched in 2006, it allows domestic lenders, fund houses, securities brokers and insurers to trade stocks and bonds overseas, however, each institution is first required to apply to the State Administration of Foreign Exchange (SAFE) for a quota.
Chinese commercial banks and funds are then able to offer stakes in these overseas products to their domestic clients.
The awarding of new quotas was suspended in May last year over concerns of global market volatility. Regulators only began to approve new QDII quotas again in late October, 2009.
At the time of the freeze, 56 financial institutions had been granted a total of 55.95 billion US dollars in QDII quotas.
The financial products that these institutions sold to local investors suffered huge losses in the second half of 2008.
Locally-registered foreign banks were in control of the vast majority of the financial products being offered to domestic investors under the QDII scheme.
Of these foreign banks, the China-registered branch of Standard Chartered Bank (SCB) sold the largest number of QDII products to Chinese investors and the bank also bore the brunt of much of the criticism from irate investors who claim that they suffered huge losses after being sold suspect financial products.
It's estimated that SCB (China) issued 68 financial products under the QDII scheme since December, 2006, more than any other foreign-invested bank. All of the 49 products that are currently still available are down, with 32 products losing over 30% and 10 products losing over 50% of their value.
Standard Chartered Bank (China) has continued to maintain that: "We haven't broken any laws and thus bear no responsibility to provide compensation."
Problems at Standard Chartered Bank
Despite the official bank line, a source working in financial product design at an investment bank told our reporter that aside from the oft-quoted global financial crisis explanation, the huge losses brought about by QDII products also involved an element of "human-error."
After a long period of investigation, which involved interviews with employees at many foreign and investment banks, the EO has learned that an employee surnamed Fan, of the Wealth Management Department in the Personal Banking Service of the SCB's Shanghai branch, was investigated by SCB (China) in April and May this year on suspicion that he had accepted bribes from Merrill Lynch.
According to our source, "Fan accepted bribes from Merrill Lynch. That's why he bought so many futures such as index-linked notes, which are expensive and ineffective and have caused great loss to SCB (China)."
Among all the QDII products provided by SCB (China), investor complaints tended to focus on products that had been jointly promoted by the bank and Merrill Lynch.
Bribery Scandal
Fan, who was born in Shanghai in1980, started out as a personal financial consultant when he first joined SCB (China), he was later promoted to principal of the bank's structural product team, responsible for designing overseas financial products.
"He wasn't in such high position, but he had quite a lot of power with an important say in deciding the target, length of investment and which investment bank to cooperate with in the process of designing and purchasing a product," a product design manager at a foreign-invested bank familiar with the situation told EO.
SCB (China) began their investigation into Fan, who was assistant vice president of the Wealth Management Department, due to a financial product he had produced in cooperation with Merrill Lynch.
An internal Merrill Lynch investigation was also launched into the role that Zhang Xiaosong, one of its managers, played in the development of this particular product.
Currently the exact amount of bribes accepted by Fan are not known, but it is estimated to be in the vicinity of 800,000 Yuan per transaction. There are also rumors are that Fan owns four properties in Shanghai.
"I heard that after he was promoted, every time he went to Hong Kong, Hangzhou or where ever, a special car would be waiting to take him to high-end venues," a person who worked at Standard Chartered told the reporter.
After two months of investigation, both SCB (China) and Merrill Lynch have failed to release any information about the case and have refused to comment when asked.
Standard Chartered has also sent e-mails to them employees requiring them not to talk about the case unless they have the permission of the company's PR office. Despite the ban, many employees have admitted that the case exists to the EO.
Fan and his direct supervisor, have both since resigned their positions at SCB (China), with Fan reportedly taking up a position as a client manager for a Chinese securities company.
In addition, although the two financial institutions still cooperate with each other, SCB (China) no long buys any QDII products from Merrill Lynch.
By Zhao Hongmei TEXT: small | medium | largePublished: 2009-11-23 Cover, Issue 444, November 18, 2009
Translated by Tang Xiangyang
Original Article: [Chinese]
Chinese investors who took advantage of the country's qualified domestic institutional investors (QDII) scheme, a program that allows domestic institutions and residents to invest in offshore markets, suffered huge losses when the financial crisis hit international markets last year.
The losses sparked a huge number of complaints from investors who claimed that the banks had not informed them of the risks associated with the overseas investments. The banks involved, many of them the domestic branches of large multinationals, argued that they had done nothing wrong and that all investments are inherently risky.
However, according to an inside source at an investment bank, many of these losses might have had more to do with suspect products being sold by a corrupt banker inside the Standard Chartered Bank (China), than the market turmoil of the past year.
QDII Investment Losses
The QDII program was launched in 2006, it allows domestic lenders, fund houses, securities brokers and insurers to trade stocks and bonds overseas, however, each institution is first required to apply to the State Administration of Foreign Exchange (SAFE) for a quota.
Chinese commercial banks and funds are then able to offer stakes in these overseas products to their domestic clients.
The awarding of new quotas was suspended in May last year over concerns of global market volatility. Regulators only began to approve new QDII quotas again in late October, 2009.
At the time of the freeze, 56 financial institutions had been granted a total of 55.95 billion US dollars in QDII quotas.
The financial products that these institutions sold to local investors suffered huge losses in the second half of 2008.
Locally-registered foreign banks were in control of the vast majority of the financial products being offered to domestic investors under the QDII scheme.
Of these foreign banks, the China-registered branch of Standard Chartered Bank (SCB) sold the largest number of QDII products to Chinese investors and the bank also bore the brunt of much of the criticism from irate investors who claim that they suffered huge losses after being sold suspect financial products.
It's estimated that SCB (China) issued 68 financial products under the QDII scheme since December, 2006, more than any other foreign-invested bank. All of the 49 products that are currently still available are down, with 32 products losing over 30% and 10 products losing over 50% of their value.
Standard Chartered Bank (China) has continued to maintain that: "We haven't broken any laws and thus bear no responsibility to provide compensation."
Problems at Standard Chartered Bank
Despite the official bank line, a source working in financial product design at an investment bank told our reporter that aside from the oft-quoted global financial crisis explanation, the huge losses brought about by QDII products also involved an element of "human-error."
After a long period of investigation, which involved interviews with employees at many foreign and investment banks, the EO has learned that an employee surnamed Fan, of the Wealth Management Department in the Personal Banking Service of the SCB's Shanghai branch, was investigated by SCB (China) in April and May this year on suspicion that he had accepted bribes from Merrill Lynch.
According to our source, "Fan accepted bribes from Merrill Lynch. That's why he bought so many futures such as index-linked notes, which are expensive and ineffective and have caused great loss to SCB (China)."
Among all the QDII products provided by SCB (China), investor complaints tended to focus on products that had been jointly promoted by the bank and Merrill Lynch.
Bribery Scandal
Fan, who was born in Shanghai in1980, started out as a personal financial consultant when he first joined SCB (China), he was later promoted to principal of the bank's structural product team, responsible for designing overseas financial products.
"He wasn't in such high position, but he had quite a lot of power with an important say in deciding the target, length of investment and which investment bank to cooperate with in the process of designing and purchasing a product," a product design manager at a foreign-invested bank familiar with the situation told EO.
SCB (China) began their investigation into Fan, who was assistant vice president of the Wealth Management Department, due to a financial product he had produced in cooperation with Merrill Lynch.
An internal Merrill Lynch investigation was also launched into the role that Zhang Xiaosong, one of its managers, played in the development of this particular product.
Currently the exact amount of bribes accepted by Fan are not known, but it is estimated to be in the vicinity of 800,000 Yuan per transaction. There are also rumors are that Fan owns four properties in Shanghai.
"I heard that after he was promoted, every time he went to Hong Kong, Hangzhou or where ever, a special car would be waiting to take him to high-end venues," a person who worked at Standard Chartered told the reporter.
After two months of investigation, both SCB (China) and Merrill Lynch have failed to release any information about the case and have refused to comment when asked.
Standard Chartered has also sent e-mails to them employees requiring them not to talk about the case unless they have the permission of the company's PR office. Despite the ban, many employees have admitted that the case exists to the EO.
Fan and his direct supervisor, have both since resigned their positions at SCB (China), with Fan reportedly taking up a position as a client manager for a Chinese securities company.
In addition, although the two financial institutions still cooperate with each other, SCB (China) no long buys any QDII products from Merrill Lynch.
S&P revises Standard Chartered outlook to negative
Agency says UK bank's dependence on wholesale banking makes it vulnerable.
By Joanna Hartely Saturday, 25 April 2009 9:41 AM
RATING REVISION: Rating of Standard Chartered has been revised from stable to negative by S&P. (Getty Images)
Standard & Poor's Ratings Services said on Saturday that it had revised its outlook on UK based-Standard Chartered Bank (SCB) to negative from stable.
At the same time, the 'A+/A-1' long- and short-term counterparty credit ratings on SCB were affirmed.
Outlooks on SCB's holding company, Standard Chartered PLC, and its main subsidiaries were revised to negative from stable.
These entities include; Standard Chartered Bank (Hong Kong) Ltd Standard Chartered First Bank Korea Ltd, Standard Chartered Bank (China) Ltd, and Standard Chartered Bank (Taiwan) Ltd.
Agency says UK bank's dependence on wholesale banking makes it vulnerable.
By Joanna Hartely Saturday, 25 April 2009 9:41 AM
RATING REVISION: Rating of Standard Chartered has been revised from stable to negative by S&P. (Getty Images)
Standard & Poor's Ratings Services said on Saturday that it had revised its outlook on UK based-Standard Chartered Bank (SCB) to negative from stable.
At the same time, the 'A+/A-1' long- and short-term counterparty credit ratings on SCB were affirmed.
Outlooks on SCB's holding company, Standard Chartered PLC, and its main subsidiaries were revised to negative from stable.
These entities include; Standard Chartered Bank (Hong Kong) Ltd Standard Chartered First Bank Korea Ltd, Standard Chartered Bank (China) Ltd, and Standard Chartered Bank (Taiwan) Ltd.
Scbccb
Reading through this thread, I see alot of the obvious "you must pay your debts" response. Now that a judgment has been obtained there are limited options for you. First, if the debt is below 10K SGD then under Singapore law the bank cannot make you a bankrupt. It will also cost the bank in excess of S$10K to make you one in the first place so even if you did owe exactly 10K it might not be worth it for them to pursue. They are trying at this point to ascertain your liquidity.
However a judgement has been obtained against you. You must understand what enforcement of a judgment is all about. For the next 12 years the bank can and will try to collect this amount from you through various means, including writ of WSS, Garnishment of your wages, attaching monies in your accounts, etc.
The only choices at this point are to pay them or become judgment proof, which is something that is an art, some in Singapore are expert in this.
Reading through this thread, I see alot of the obvious "you must pay your debts" response. Now that a judgment has been obtained there are limited options for you. First, if the debt is below 10K SGD then under Singapore law the bank cannot make you a bankrupt. It will also cost the bank in excess of S$10K to make you one in the first place so even if you did owe exactly 10K it might not be worth it for them to pursue. They are trying at this point to ascertain your liquidity.
However a judgement has been obtained against you. You must understand what enforcement of a judgment is all about. For the next 12 years the bank can and will try to collect this amount from you through various means, including writ of WSS, Garnishment of your wages, attaching monies in your accounts, etc.
The only choices at this point are to pay them or become judgment proof, which is something that is an art, some in Singapore are expert in this.
Congrats. Next time, don't borrow from them anymore!
i meant i oredi paid up earlier but they are asking for more!
Rich clients allege foul play by Standard Chartered
The Economic Times
Sat, Apr 30, 2011 | Updated 07.26AM IST
30 Apr, 2011, 12.58AM IST, Nishanth Vasudevan,ET Bureau
Rich clients allege foul play by Standard Chartered
MUMBAI: Nearly three months after a rogue banker at Citi duped wealthy investors, some rich clients of another multinational lender, Standard Chartered, have alleged that they have been short-changed by the British bank.
Standard Chartered, the foreign bank with the largest presence in India, sold debt securities to private banking clients with a promise to buy them back, according to sources in the wealth management industry.
The products on offer included debentures of real estate firms and a Delhi-based education company. Investors were attracted by the buyback option-something not allowed under current regulations-and higher returns.
Around Rs 150-200 crore of such debentures were sold by Standard Chartered relationship managers to their private banking and wealth management clients, said two people in the wealth management industry.
In a response to an email query by ET, a Standard Chartered spokesperson acknowledged there was a problem, but described the estimates of Rs 150-200 crore as a "gross exaggeration".
"We are investigating a small matter involving four customer accounts and are in the process of resolving it. We can assure you that your guesstimate on the amount involved is a gross exaggeration-as indicated, the matter involves just four clients. For reasons of client confidentiality, it will be inappropriate to comment any further."
Standard Chartered did not comment on whether some of the investors were funded by the bank for investing in the debentures.
The trouble began when some of the investors tried to sell the papers back to Standard Chartered. According to a source in the wealth management industry, the bank declined to honour such 'deals' because buyback or repurchase of corporate bonds cannot be carried out between a bank and a private client. Currently, repurchase, or repo in technical parlance, of corporate bonds can take place only between institutions like banks and bond houses that are regulated by the Reserve Bank of India (RBI).
"These clients were keen to raise funds before March 31 financial closing, but were unable to do it. Some of them have threatened to lodge an official complaint. As of now, only a few clients have realised the irregular nature of the transaction," said the person.
Standard Chartered has asked some officials to quit following investigations by the compliance department. Ashish Shankar, head of investment advisory at Standard Chartered Private Bank, is learnt to have gone on leave. According to sources, the bank is trying to make good the losses of clients who were misled by its relationship managers who had promised to buy back the securities, a promise Standard Chartered is not in a position to meet.
StanChart is also trying to find other investors who may be willing to buy the debentures from the private banking clients.
The StanChart incident, which follows the Rs 300-crore fraud at Citibank's Gurgaon branch, may force the banking regulator to tighten private banking and wealth management rules.
RBI may Tighten Leash
"The mis-selling by foreign and private banks happens because relationship managers are under a lot of pressure to gain revenue rather than sell the right product to the client," said a wealth management head with a Mumbai-based listed brokerage.
Towards end last year, Citi had filed a police complaint against one of its officials who had embezzled over Rs 300 crore of the multinational bank's wealthy clients. The mastermind of the Citi fraud, Shivraj Puri, used clients' money to take positions in stocks and derivatives by selling a fraudulent investment scheme. The bets backfired after the markets fell.
Wealth management and private banking, which cater to the rich and super-rich clients with special investment needs, were introduced by foreign banks. After the '91 Harshad Mehta securities scam , banks were banned from offering portfolio management services.
But as income levels grew over the years, select MNC banks introduced specialised wealth management services. In recent years, local private banks as well as PSU lenders have started wealth management divisions. "There may be a need for such a service. But banks must have robust systems to check misuse," said a senior banker.
The Economic Times
Sat, Apr 30, 2011 | Updated 07.26AM IST
30 Apr, 2011, 12.58AM IST, Nishanth Vasudevan,ET Bureau
Rich clients allege foul play by Standard Chartered
MUMBAI: Nearly three months after a rogue banker at Citi duped wealthy investors, some rich clients of another multinational lender, Standard Chartered, have alleged that they have been short-changed by the British bank.
Standard Chartered, the foreign bank with the largest presence in India, sold debt securities to private banking clients with a promise to buy them back, according to sources in the wealth management industry.
The products on offer included debentures of real estate firms and a Delhi-based education company. Investors were attracted by the buyback option-something not allowed under current regulations-and higher returns.
Around Rs 150-200 crore of such debentures were sold by Standard Chartered relationship managers to their private banking and wealth management clients, said two people in the wealth management industry.
In a response to an email query by ET, a Standard Chartered spokesperson acknowledged there was a problem, but described the estimates of Rs 150-200 crore as a "gross exaggeration".
"We are investigating a small matter involving four customer accounts and are in the process of resolving it. We can assure you that your guesstimate on the amount involved is a gross exaggeration-as indicated, the matter involves just four clients. For reasons of client confidentiality, it will be inappropriate to comment any further."
Standard Chartered did not comment on whether some of the investors were funded by the bank for investing in the debentures.
The trouble began when some of the investors tried to sell the papers back to Standard Chartered. According to a source in the wealth management industry, the bank declined to honour such 'deals' because buyback or repurchase of corporate bonds cannot be carried out between a bank and a private client. Currently, repurchase, or repo in technical parlance, of corporate bonds can take place only between institutions like banks and bond houses that are regulated by the Reserve Bank of India (RBI).
"These clients were keen to raise funds before March 31 financial closing, but were unable to do it. Some of them have threatened to lodge an official complaint. As of now, only a few clients have realised the irregular nature of the transaction," said the person.
Standard Chartered has asked some officials to quit following investigations by the compliance department. Ashish Shankar, head of investment advisory at Standard Chartered Private Bank, is learnt to have gone on leave. According to sources, the bank is trying to make good the losses of clients who were misled by its relationship managers who had promised to buy back the securities, a promise Standard Chartered is not in a position to meet.
StanChart is also trying to find other investors who may be willing to buy the debentures from the private banking clients.
The StanChart incident, which follows the Rs 300-crore fraud at Citibank's Gurgaon branch, may force the banking regulator to tighten private banking and wealth management rules.
RBI may Tighten Leash
"The mis-selling by foreign and private banks happens because relationship managers are under a lot of pressure to gain revenue rather than sell the right product to the client," said a wealth management head with a Mumbai-based listed brokerage.
Towards end last year, Citi had filed a police complaint against one of its officials who had embezzled over Rs 300 crore of the multinational bank's wealthy clients. The mastermind of the Citi fraud, Shivraj Puri, used clients' money to take positions in stocks and derivatives by selling a fraudulent investment scheme. The bets backfired after the markets fell.
Wealth management and private banking, which cater to the rich and super-rich clients with special investment needs, were introduced by foreign banks. After the '91 Harshad Mehta securities scam , banks were banned from offering portfolio management services.
But as income levels grew over the years, select MNC banks introduced specialised wealth management services. In recent years, local private banks as well as PSU lenders have started wealth management divisions. "There may be a need for such a service. But banks must have robust systems to check misuse," said a senior banker.
StanChart in damage control mode
StanChart in damage control mode
BS Reporter / Mumbai May 01, 2011, 0:37 IST
The Standard Chartered Bank is set to ask three of its executives to go on leave following complaints made by a few high net worth clients on mis-selling of products. In another damage-control exercise, the UK-headquartered bank has already roped in investors, including non-banking finance companies and investment banks to buy back debentures issued to these clients.
The bank has already asked Ashish Shankar, head of its investment advisory division, to go on leave. It is learnt that StanChart had promised high returns to some of its HNI clients, failing which it agreed to buy back the securities, which, however, was not permissible under law.
“About 90 per cent of the securities issued have already been re-sold to other investors arranged by StanChart,” a source familiar with the development told Business Standard.
“These securities have been sold at the current market price. StanChart is likely to pay the difference between the current market price and the assured return that was promised to some of its client,” said another source familiar with the developments.
The estimated loss of the bank for paying the difference in market price is pegged at Rs 2 crore. The Indian arm of the UK-based lender did not wish to comment on this development. The bank, however, said it had already informed the Reserve Bank of India and the Securities and Exchange Board of India on the issue. “The issue has been blown out of proportion. It involves only four clients. We are in the process of sorting this out,” a spokesperson of the bank said.
Industry players said relationship managers of StanChart had sold rated debentures issued by a real estate firm, and a few other companies, to some of the high net worth clients. These clients were promised an assured rate of return failing which the bank will buy back these securities. However, as per laws, a bank is not authorised to provide a repurchase option.
The repurchase option was provided by some middle management employees on the hope that the debentures could be resold to other investors, a top official of a wealth management division of a foreign bank said.
Since StanChart did not find new buyers within the stipulated time, these clients demanded the foreign bank should buy back the papers from them, he added.
"This has arisen due to a possible mis-match between the customer's cash flow and tenure of the bond," the official said. According to another industry official, the NBFCs and investment banks have agreed to buy these debentures from StanChart's clients as they are getting these securities at a discount to the market price.
"These are typically securities, which are offering 16-17 per cent return and are backed by equities. The new investors must be comfortable with the ability of these companies to honour their obligations at the maturity. Also, they are getting it at a discount and are sensing an opportunity to make money from this mess," the official said.
StanChart in damage control mode
BS Reporter / Mumbai May 01, 2011, 0:37 IST
The Standard Chartered Bank is set to ask three of its executives to go on leave following complaints made by a few high net worth clients on mis-selling of products. In another damage-control exercise, the UK-headquartered bank has already roped in investors, including non-banking finance companies and investment banks to buy back debentures issued to these clients.
The bank has already asked Ashish Shankar, head of its investment advisory division, to go on leave. It is learnt that StanChart had promised high returns to some of its HNI clients, failing which it agreed to buy back the securities, which, however, was not permissible under law.
“About 90 per cent of the securities issued have already been re-sold to other investors arranged by StanChart,” a source familiar with the development told Business Standard.
“These securities have been sold at the current market price. StanChart is likely to pay the difference between the current market price and the assured return that was promised to some of its client,” said another source familiar with the developments.
The estimated loss of the bank for paying the difference in market price is pegged at Rs 2 crore. The Indian arm of the UK-based lender did not wish to comment on this development. The bank, however, said it had already informed the Reserve Bank of India and the Securities and Exchange Board of India on the issue. “The issue has been blown out of proportion. It involves only four clients. We are in the process of sorting this out,” a spokesperson of the bank said.
Industry players said relationship managers of StanChart had sold rated debentures issued by a real estate firm, and a few other companies, to some of the high net worth clients. These clients were promised an assured rate of return failing which the bank will buy back these securities. However, as per laws, a bank is not authorised to provide a repurchase option.
The repurchase option was provided by some middle management employees on the hope that the debentures could be resold to other investors, a top official of a wealth management division of a foreign bank said.
Since StanChart did not find new buyers within the stipulated time, these clients demanded the foreign bank should buy back the papers from them, he added.
"This has arisen due to a possible mis-match between the customer's cash flow and tenure of the bond," the official said. According to another industry official, the NBFCs and investment banks have agreed to buy these debentures from StanChart's clients as they are getting these securities at a discount to the market price.
"These are typically securities, which are offering 16-17 per cent return and are backed by equities. The new investors must be comfortable with the ability of these companies to honour their obligations at the maturity. Also, they are getting it at a discount and are sensing an opportunity to make money from this mess," the official said.
Standard Chartered faces competition to retain staff
Standard Chartered faces competition to retain staff
Harry Wilson, 13:21, Wednesday 4 May 2011
Standard Chartered (Xetra: 859123 - news) said staff numbers fell by 800 in the first three months of the year in a sign of the competition the Asia-focused bank faces to retain staff.
Standard Chartered said that despite the decrease in its headcounts, which stood at 85,000 at the end of last year, the bank would add 1,000 employees by the end of this year.
Richard Meddings, finance director of Standard Chartered, discussing the bank’s first quarter results said the business had made an “excellent start” in 2011 and had produced another record financial performance.
Despite this, Standard Chartered shares fell by 2pc as investors worried over the bank’s ability to manage its costs.
Mr Meddings said the bank had a “firm grip” on its expenses, adding that the bank had achieved “double-digit” revenue growth.
“Expenses are broadly in line with the run rate seen in the second half of 2010,” said the bank in a statement to the market .
Peter Sands, chief executive of Standard Chartered, said the bank remained "very well positioned in dynamic market with strong fundamentals”.
Standard Chartered has been critical of the impact of new regulation on its ability to keep staff and has warned that UK rules on industry pay could harm its business.
Commenting on the Independent Commission on Banking’s interim report published last month, Mr Meddings said he thought it was an “interesting” document, but said the UK should not look to design a regulatory regime that was “super-equivalent” to those in other countries.
Standard Chartered faces competition to retain staff
Harry Wilson, 13:21, Wednesday 4 May 2011
Standard Chartered (Xetra: 859123 - news) said staff numbers fell by 800 in the first three months of the year in a sign of the competition the Asia-focused bank faces to retain staff.
Standard Chartered said that despite the decrease in its headcounts, which stood at 85,000 at the end of last year, the bank would add 1,000 employees by the end of this year.
Richard Meddings, finance director of Standard Chartered, discussing the bank’s first quarter results said the business had made an “excellent start” in 2011 and had produced another record financial performance.
Despite this, Standard Chartered shares fell by 2pc as investors worried over the bank’s ability to manage its costs.
Mr Meddings said the bank had a “firm grip” on its expenses, adding that the bank had achieved “double-digit” revenue growth.
“Expenses are broadly in line with the run rate seen in the second half of 2010,” said the bank in a statement to the market .
Peter Sands, chief executive of Standard Chartered, said the bank remained "very well positioned in dynamic market with strong fundamentals”.
Standard Chartered has been critical of the impact of new regulation on its ability to keep staff and has warned that UK rules on industry pay could harm its business.
Commenting on the Independent Commission on Banking’s interim report published last month, Mr Meddings said he thought it was an “interesting” document, but said the UK should not look to design a regulatory regime that was “super-equivalent” to those in other countries.
StanChart cuts staff to combat cost pressures
By Kelvin Soh and Steve Slater Kelvin Soh And Steve Slater – Wed May 4, 4:23 am ET
HONG KONG/LONDON (Reuters) – Standard Chartered Plc (STAN.L) said it had cut 800 jobs this year to restrain rising costs after making record first quarter profits and revenue on the back of strong Asian markets like India and Hong Kong.
Standard Chartered (2888.HK) said on Wednesday its income rose by more than 10 percent in the first quarter, putting it on track for its ninth successive year of record earnings.
Costs rose at a faster rate than income after a hiring spree last year, however, taking the shine off the trading update.
Banks in Asia have been in an increasingly intense battle to hire and retain talent, especially in hot markets such as India and China.
Standard Chartered is under pressure to show it has costs under control, and the first quarter rise knocked its shares 2 percent lower.
"They are still seeing a high level of cost growth in the wholesale bank," said Bruce Packard, analyst at Seymour Pierce in London.
The bank said it would deliver on its promise to keep cost growth in line with income growth this year.
"We've got a good grip on expenses," Finance Director Richard Meddings told reporters on a conference call. "This isn't about cutting jobs, it's about the pace of hiring...this is about management pulling the levers of expense growth."
Meddings said he expected the bank to add about 1,000 staff net this year, after a net 800 fall in the first quarter. It added 7,000 employees last year, giving it roughly 85,000 staff.
The hiring and competition last year drove costs up 13 percent, outpacing a 6 percent income rise. So-called "negative jaws" remained in the first quarter, but was significantly narrower than last year, the bank said.
The London-based bank, which generates more than four fifths of its profit in Asia and other emerging markets, said income in its consumer banking division grew by a low double-digit amount and wholesale banking was up by at least 10 percent.
The bank does not issue full quarterly earnings.
India, now the bank's biggest market after contributing $1.2 billion in profit last year, will continue to grow strongly but at a slower pace due to the size of the business, Meddings said, underpinned by economic growth of at least 8 percent this year.
Hong Kong, Singapore, Malaysia and China were among other good performers in a broad-based income rise, Meddings said.
The bank is expected to make a profit of $7 billion this year, up 14 percent from $6.1 billion last year, according to the average of 15 analysts polled by Thomson Reuters. That would mark a ninth successive year of record profit.
Its London-listed shares were down 2 percent at 16.31 pounds, valuing the bank at 38 billion pounds ($62.6 billion). The shares have underperformed rivals this year and are down 5 percent, but still trade at almost 12 times expected 2011 earnings, compared to near 8 times for most European rivals.
(Editing by Chris Lewis, David Holmes and Jane Merriman)
By Kelvin Soh and Steve Slater Kelvin Soh And Steve Slater – Wed May 4, 4:23 am ET
HONG KONG/LONDON (Reuters) – Standard Chartered Plc (STAN.L) said it had cut 800 jobs this year to restrain rising costs after making record first quarter profits and revenue on the back of strong Asian markets like India and Hong Kong.
Standard Chartered (2888.HK) said on Wednesday its income rose by more than 10 percent in the first quarter, putting it on track for its ninth successive year of record earnings.
Costs rose at a faster rate than income after a hiring spree last year, however, taking the shine off the trading update.
Banks in Asia have been in an increasingly intense battle to hire and retain talent, especially in hot markets such as India and China.
Standard Chartered is under pressure to show it has costs under control, and the first quarter rise knocked its shares 2 percent lower.
"They are still seeing a high level of cost growth in the wholesale bank," said Bruce Packard, analyst at Seymour Pierce in London.
The bank said it would deliver on its promise to keep cost growth in line with income growth this year.
"We've got a good grip on expenses," Finance Director Richard Meddings told reporters on a conference call. "This isn't about cutting jobs, it's about the pace of hiring...this is about management pulling the levers of expense growth."
Meddings said he expected the bank to add about 1,000 staff net this year, after a net 800 fall in the first quarter. It added 7,000 employees last year, giving it roughly 85,000 staff.
The hiring and competition last year drove costs up 13 percent, outpacing a 6 percent income rise. So-called "negative jaws" remained in the first quarter, but was significantly narrower than last year, the bank said.
The London-based bank, which generates more than four fifths of its profit in Asia and other emerging markets, said income in its consumer banking division grew by a low double-digit amount and wholesale banking was up by at least 10 percent.
The bank does not issue full quarterly earnings.
India, now the bank's biggest market after contributing $1.2 billion in profit last year, will continue to grow strongly but at a slower pace due to the size of the business, Meddings said, underpinned by economic growth of at least 8 percent this year.
Hong Kong, Singapore, Malaysia and China were among other good performers in a broad-based income rise, Meddings said.
The bank is expected to make a profit of $7 billion this year, up 14 percent from $6.1 billion last year, according to the average of 15 analysts polled by Thomson Reuters. That would mark a ninth successive year of record profit.
Its London-listed shares were down 2 percent at 16.31 pounds, valuing the bank at 38 billion pounds ($62.6 billion). The shares have underperformed rivals this year and are down 5 percent, but still trade at almost 12 times expected 2011 earnings, compared to near 8 times for most European rivals.
(Editing by Chris Lewis, David Holmes and Jane Merriman)
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