16th Dec 2005 07:01
Standard Chartered PLC16 December 2005 Standard Chartered PLC16 December 2005 The following is the text of a regulatory announcement made in Hong Kong on 16December 2005: CONNECTED TRANSACTION - CHARGE GRANTED BY STANDARD CHARTERED BANK IN FAVOUR OFINDEPENDENT TRUSTEES IN RELATION TO BENEFITS PROVIDED BY THE STANDARD CHARTERED BANK EMPLOYER FINANCED RETIREMENT BENEFIT SCHEME Pursuant to the Charge, Standard Chartered Bank created a charge over £6,500,000(approximately HK$89,921,000) worth of assets in its balance sheet in favour ofthe Trustees in order to secure its existing obligations to pay pension benefitsto certain of its directors and senior employees in accordance with theprovisions of the Retirement Benefit Scheme. Charge Pursuant to the Charge, Standard Chartered Bank has created a charge over£6,500,000 (approximately HK$89,921,000) worth of assets in its balance sheet infavour of independent Trustees in order to secure its existing obligations topay pension benefits to certain of its directors and senior employees inaccordance with the provisions of the Retirement Benefit Scheme. The assetswhich are the subject of the Charge consist of cash balances held in third partybank accounts in the name of Standard Chartered Bank. The Charge has beengranted to secure the existing promises of Standard Chartered Bank to payretirement benefits to certain of its directors and senior employees (as at thedate of this announcement, these promises have been made to four executiveDirectors and six senior managers). The Charge represents the value of thepension benefits for directors and senior employees not provided throughStandard Chartered Bank's tax-approved pension arrangements. As a result of achange in UK pensions legislation, from April 2006, part of the unapprovedpension liability will be transferred to the tax-approved pension arrangements;accordingly, the amount of the cash balance in the account which is the subjectof the Charge is expected to be reduced to approximately £3,000,000(approximately HK$41,502,000). The amount of the cash balance will increase asdirectors and senior employees accrue additional unapproved pension benefitspursuant to the Retirement Benefit Scheme as a result of their continuedservice. The level of pension benefits being provided to directors and senioremployees remains unchanged from that reported in Standard Chartered's AnnualReport and Accounts for 2004. Apart from bringing Standard Chartered into linewith best practice in the United Kingdom to provide security for unfundedpension benefits to employees, no other benefits are expected to accrue toStandard Chartered as a result of the Charge being executed by StandardChartered Bank. Full details of the Charge will be disclosed in StandardChartered's 2005 Annual Report and Accounts. Connected Transaction Independent Trustees have been appointed to protect the interests of theDirectors who are entitled to the unfunded retirement benefits described above.Accordingly, the independent Trustees are associates of the Directors andtherefore connected persons of Standard Chartered pursuant to the Hong KongListing Rules. The Charge constitutes financial assistance in accordance withRule 14A.10(4) of the Hong Kong Listing Rules. Accordingly, the Charge is aconnected transaction for Standard Chartered pursuant to Rule 14A.13(2)(a)(i) ofthe Hong Kong Listing Rules. To the best of the knowledge, information and belief of the Directors havingmade all reasonable enquiries, save as disclosed above, the Trustees and theultimate beneficial owners of the Trustees are third parties independent ofStandard Chartered and connected persons (as defined in the Hong Kong ListingRules) of Standard Chartered. The Directors (including the independentnon-executive directors) believe the terms of the Charge are fair andreasonable, on normal commercial terms and in the interests of StandardChartered and its shareholders as a whole. The pension benefits secured by the Charge represent less than 2.5% under eachof the percentage ratios (as defined in the Hong Kong Listing Rules) andaccordingly the transaction is subject to the reporting and announcementrequirements of the Hong Kong Listing Rules but, under Listing Rule 14A.66(2)(a)(i), is exempt from the requirement to obtain independent shareholders'approval. Principal Activities Standard Chartered is the ultimate holding company of Standard Chartered Bankand is listed on both the London Stock Exchange and The Stock Exchange of HongKong Limited. Standard Chartered Bank is a bank incorporated by Royal Charter in England andWales. It serves both Consumer and Wholesale Banking customers. ConsumerBanking provides credit cards, personal loans, mortgages, deposit taking andwealth management services to individuals and small to medium sized enterprises.Wholesale Banking provides corporate and institutional clients with servicesin trade finance, cash management, lending, securities services, foreignexchange, debt capital markets and corporate finance. Definitions "Charge" means the Deed of Charge dated 15 December, 2005 between Standard Chartered Bank and the Trustees;"Directors" means members of the board of directors of Standard Chartered;"Hong Kong Listing Rules" means the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited;"Retirement Benefit means the Standard Chartered Bank Employer Financed Scheme" Retirement Benefit Scheme;"Standard Chartered" means Standard Chartered PLC;"Trustees" means The Law Debenture Pension Trust Corporation plc and The Bank of New York. By Order of the Board Charles Bennett Brown Group Company Secretary 15 December 2005 Please also refer to the published version in South China Morning Post. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Standard Chartered