6th Apr 2020 07:27
(Alliance News) - Investors in HSBC Holdings PLC in Hong Kong have threatened to pursue legal action against the bank following the cancellation of its dividend payout, the Financial Times reported Sunday.
On Wednesday, the lender - which is listed in both London and Hong Kong - cancelled its dividend for the fourth quarter of 2019 of USD0.21 per share, which was due to be paid on April 14. It added that no quarterly or interim dividend will be declared in the rest of 2020, and no share buybacks will be carried out.
All the UK's major banks on Wednesday last week confirmed the suspension of shareholder returns following a request from the Prudential Regulatory Authority. This regulator asked the banks to preserve cash in order to have funds to lend amid the economic downturn caused by Covid-19.
However, retail investors in Hong Kong threatened to sue HSBC over the move, adding that they will attempt to requisition an extraordinary general meeting, the FT reported. At least 200 of the shareholders are being advised by Surich Asset Management.
"Many of them use this as their retirement plan. They rely on the dividend to pay for their living expenses after their retirement, so this will actually hurt them a lot," said Matthew Chung, an adviser at Surich.
https://www.ft.com/content/3681a998-8164-4fd1-a5e5-ae54f56a3b70
Shares in HSBC rose 3.3% on Monday in Hong Kong to HKD39.15.
By Ife Taiwo; [email protected]
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