FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a - 16 or 15d - 16 of
the Securities Exchange Act of 1934
For the month of September, 2007
HSBC Holdings plc
42nd Floor, 8 Canada
Square, London E14 5HQ, England
(Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F).
Form 20-F X Form 40-F ......
(Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934).
Yes....... No X
(If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): 82- ..............)
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THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION
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If you are in any doubt about the contents of this circular or as to the action
you should take, you should seek your own personal financial advice immediately
from your stockbroker or other registered dealer in securities, bank manager,
solicitor, professional accountant or other professional adviser.
If you have sold or otherwise transferred all of your holding of HSBC Ordinary
Shares, please pass this circular as soon as possible to the purchaser or the
transferee or to the bank, stockbroker or other agent through whom the sale or
transfer was effected for transmission to the purchaser or transferee.
The Stock Exchange of Hong Kong Limited takes no responsibility for the contents
of this circular, makes no representation as to its accuracy or completeness and
expressly disclaims any liability whatsoever for any loss howsoever arising from
or in reliance upon the whole or any part of the contents of this circular. The
ordinary shares of HSBC trade under stock code 5 on The Stock Exchange of Hong
Kong Limited.
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HSBC Holdings plc
(Incorporated and registered in England and Wales with registered number 617987)
DISCLOSEABLE TRANSACTION CIRCULAR
relating to the agreement to acquire a majority shareholding in
KOREA EXCHANGE BANK
by a wholly owned subsidiary of
HSBC Holdings plc
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21 September 2007
Contents
Definitions.................................................................. 1
Directors and Group Company Secretary........................................ 3
Letter from the Group Chairman of HSBC....................................... 4
Appendix - General Information............................................... 9
Definitions
In this circular, the following expressions shall have the meanings set out
below unless the context requires otherwise:
"Acquisition" the purchase of the KEB Shares by HSBC Asia
"Acquisition Agreement" the sale and purchase agreement dated 3 September 2007 between HSBC Asia and Lone Star
relating to the KEB Shares
"Announcement" the discloseable transaction announcement dated 3 September 2007 released by the Company
relating to the Acquisition
"Board" the board of directors of the Company
"Company" or "HSBC" HSBC Holdings plc, a company incorporated in England and Wales with limited liability
"Director(s)" the director(s) of the Company
"FSC" Financial Supervisory Commission of Korea
"FTC" Fair Trade Commission of Korea
"Hong Kong" Hong Kong Special Administrative Region of the People's Republic of China
"Hong Kong Listing Rules" The Rules Governing the Listing of Securities on the Stock Exchange
"HSBC Asia" HSBC Asia Pacific Holdings (UK) Limited
"HSBC Group" the Company and its subsidiaries
"HSBC Ordinary Shares" or ordinary shares of US$0.50 each in the capital of the Company from time to time
"Ordinary Shares"
"IFRS" International Financial Reporting Standards
"KEB" Korea Exchange Bank
"KEB Group" KEB and its subsidiaries
"KEB Shares" 329,042,672 shares in KEB owned by Lone Star
"KEXIM" The Export-Import Bank of Korea
"Korea" the Republic of Korea
"Korean GAAP" generally accepted accounting principles in Korea
"KRW" or "Korean Won" Korean won, the lawful currency of Korea
"KRX" the Korea Exchange
"Latest Practicable Date" 18 September 2007, being the latest practicable date prior to the printing of this circular
for ascertaining certain information referred to in this circular
"Lone Star" LSF-KEB Holdings SCA
"SFO" Securities and Futures Ordinance (Cap. 571)
"Shareholders" shareholders of the Company
"Stock Exchange" The Stock Exchange of Hong Kong Limited
"UK" the United Kingdom
"US" the United States of America
"US$" or "US Dollar" US dollars, the lawful currency of the United States of America
"GBP" pounds sterling, the lawful currency of the United Kingdom
Notes:
In this circular:
(i) Figures in KRW have been translated into US$ at the rate of
KRW939.9 = US$1 and figures in US$ have been translated into KRW
at the rate of US$1 = KRW939.9 for indication purposes only.
(ii) The financial figures for KEB for the years ended 31 December 2006
and 2005 have been extracted from the relevant audited
accounts for KEB which were prepared on a consolidated basis.
The financial figures for KEB for the six months to 30 June 2007
have been extracted from the relevant unaudited interim accounts
for KEB which were prepared on a non-consolidated basis.
Directors and Group Company Secretary
Directors S K Green (Group Chairman)
The Baroness Dunn (Deputy Chairman, Non-executive Director)
Sir Brian Moffat (Deputy Chairman, Non-executive Director)
M F Geoghegan (Group Chief Executive)
Lord Butler (Non-executive Director)
J D Coombe (Non-executive Director)*
R A Fairhead (Non-executive Director)*
D J Flint (Group Finance Director)
W K L Fung (Non-executive Director)
J W J Hughes-Hallett (Non-executive Director)*
Sir Mark Moody-Stuart (Non-executive Director)*
G Morgan (Non-executive Director)*
S W Newton (Non-executive Director)*
S M Robertson (Non-executive Director)*
Sir Brian Williamson (Non-executive Director)*
* Denotes independent Non-executive Director
Group Company Secretary R G Barber
All of 8 Canada Square, London E14 5HQ, United Kingdom
Letter from the Group Chairman of HSBC
21 September 2007
Dear Shareholder
Agreement to acquire a majority shareholding in
Korea Exchange Bank
INTRODUCTION
On 3 September 2007, we announced that HSBC, through its indirect, wholly owned
subsidiary, HSBC Asia, had agreed to acquire 51.02 per cent of the issued share
capital of KEB, the sixth largest bank in Korea.
The shares will be acquired from Lone Star, a holding company owned by Lone Star
Fund IV (US) LP and Lone Star Fund IV (Bermuda) LP. As stated in the
Announcement, the purchase price is KRW3,400 billion plus US$2,700 million
amounting in total to the equivalent of approximately US$6,317 million, payable
in cash, assuming the Acquisition is completed on or before 31 January 2008.
The Acquisition is subject to a number of conditions including the receipt of
applicable governmental and regulatory approvals, particularly in Korea from the
FSC and the FTC. In the event that the Acquisition is completed after 31 January
2008, the purchase price will be increased by US$133 million, also payable in
cash.
Under a shareholders' agreement with Lone Star, KEXIM is entitled to require
HSBC Asia to purchase, on substantially the same terms, part or all of its
shareholding in KEB (KEXIM's entire shareholding represents a further 6.25 per
cent of the issued share capital of KEB).
The Company does not intend to make a tender offer to KEB's remaining
shareholders and, following completion of the Acquisition, KEB will remain a
company listed on the KRX.
The purpose of this circular, which is being issued in order to conform with the
Hong Kong Listing Rules, is to provide you with further information in relation
to the Acquisition Agreement and the Acquisition.
ACQUISITION AGREEMENT
Under an agreement entered into on 3 September 2007 with Lone Star, HSBC Asia
has conditionally agreed to purchase the KEB Shares, representing 51.02 per cent
of the issued share capital of KEB, from Lone Star.
Conditions and termination right
The Acquisition is conditional upon the satisfaction or waiver of certain
conditions on or before 30 April 2008 including (but not limited to):
* KEB, HSBC Asia and other relevant members of the HSBC Group having
received all necessary governmental and regulatory approvals,
particularly in Korea (and none of the approvals being granted subject
to any conditions having adverse effect)
* no adverse effect having occurred in relation to KEB's business,
assets, operations or liabilities that is material to the KEB Group
taken as a whole (excluding the effects of changes in general
economic, financial, political, regulatory or market conditions
applicable to similar businesses in Korea)
* certain specified actions in relation to KEB not occurring without the
prior consent of HSBC Asia
* no material business restriction or suspension having been imposed on
KEB as a result of the ongoing litigation in relation to the merger of
the KEB Card business with KEB in 2004.
Within Korea, applications for approval will be made to the FSC and the FTC. In
the event that the formal application for approval has not been submitted to the
FSC on or before 31 January 2008, Lone Star has the right to terminate the
Acquisition Agreement.
Further due diligence
Under the Acquisition Agreement, HSBC Asia has the right to conduct further due
diligence on KEB in a period of 40 days following signing of the Acquisition
Agreement, which may be extended by a further seven days in certain
circumstances. HSBC Asia is then entitled, within five days of the end of that
period, to notify Lone Star that it does not wish to proceed with the
Acquisition in which case the Acquisition Agreement will terminate.
Consideration
The consideration for the KEB Shares is KRW3,400 billion plus US$2,700 million
amounting in total to the equivalent of approximately US$6,317 million,
equivalent to KRW18,045 (US$19.20) per share, payable in cash, assuming the
Acquisition is completed on or before 31 January 2008. In the event that
completion has not taken place on or before 31 January 2008, HSBC Asia will pay
a further US$133 million, equivalent to KRW380 (US$0.40) per share. The
Acquisition Agreement is conditional on completion taking place on or before 30
April 2008. Settlement on completion will be made in cash in US Dollars, with
the Korean Won element of the consideration translated into US Dollars at the
then current exchange rate.
The consideration expressed in KRW at KRW18,045 per share represents a premium
of 21.5 per cent to the share price as at 31 August 2007 of KRW14,850 per share,
a 26.8 per cent premium to the 10-day average trading price to 31 August 2007 of
KRW14,230 per share, a 29.0 per cent premium to the 30-day average trading price
to 31 August 2007 of KRW13,990 per share and a multiple of KEB's stated book
value at 30 June 2007 of 1.83 times.
The consideration payable will be offset by any dividends in respect of the KEB
Shares paid by KEB by reference to a record date which is prior to the
registration of HSBC Asia as a shareholder entitled to any such dividend.
The consideration was arrived at after arm's length negotiations between the
parties. HSBC was advised by HSBC Corporate, Investment Banking and Markets and
UBS AG acting through its business group, UBS Investment Bank. The Directors
believe the terms of the transaction are fair and reasonable and in the
interests of Shareholders as a whole.
The Acquisition will be financed from the HSBC Group's own resources. Following
completion, KEB will be accounted for as a subsidiary in HSBC's consolidated
financial statements.
Guarantee
HSBC Asia will have the benefit of a guarantee from Lone Star Fund IV (US) LP
and Lone Star Fund IV (Bermuda) LP guaranteeing the financial obligations of
Lone Star under the Acquisition Agreement.
KEXIM
KEXIM also owns 40,314,387 shares in KEB and, under the terms on which Lone Star
originally invested in KEB, KEXIM has the right to require any purchaser of Lone
Star's KEB Shares to acquire part or all of its shares in KEB on substantially
the same terms. If this right is exercised in respect of all of KEXIM's shares
in KEB, it would involve the payment by HSBC Asia of KRW727 billion (US$774
million) to KEXIM, assuming that completion takes place on or before 31 January
2008 and the consideration is set in Korean Won. If completion takes place after
31 January 2008, there will be a corresponding increase in the amount payable to
KEXIM in line with the additional payment to Lone Star. Such purchase, if KEXIM
exercises its right, would be conditional on, and completed at the same time as,
completion of the purchase of Lone Star's KEB Shares.
Management and operations
Following completion and subject to relevant approvals, HSBC Asia will be
entitled to nominate a majority of directors to the board of KEB including KEB's
Chairman and Chief Executive and certain other officers. The KEB name will be
retained with consideration being given to the addition, in a suitable form, of
reference to KEB being a member of the HSBC Group to reflect its majority
shareholding.
INFORMATION ON KEB
KEB has over 5.4 million deposit customers and is the sixth largest bank in
Korea, as measured by total assets at 30 June 2007. It has over 350 branches and
a presence in 18 countries, making it Korea's leading international bank.
At 30 June 2007, KEB's total assets were KRW73.5 trillion (US$78.2 billion) with
shareholders' equity of KRW6.3 trillion (US$6.7 billion). In the year ended 31
December 2006, KEB generated pre-tax profits of KRW1,482 billion (US$1,577
million) (2005: KRW1,654 billion (US$1,760 million)) and net income of KRW1,006
billion (US$1,070 million) (2005: KRW1,934 billion (US$2,058 million)). Net
income in the six months to 30 June 2007 was KRW516 billion (US$549 million).
These results were prepared in accordance with Korean GAAP.
REASONS FOR AND BENEFITS OF THE TRANSACTION
The HSBC Group is one of the world's largest banking and financial services
organisations with an unparalleled international network across 83 countries and
territories. The Acquisition accords with HSBC's stated strategy of targeting
investment at high growth markets with international connections and will
further enhance the HSBC Group's footprint in the Asia-Pacific region.
HSBC believes that KEB would benefit from having a long-term, and
internationally focused, strategic shareholder which would enable it to enhance
future growth prospects. KEB has particular strengths in trade finance and
foreign exchange, complementing the HSBC Group's global capabilities in these
areas. The HSBC Group would also offer KEB the opportunity to add to the range
of services it offers in other areas, from personal finance and credit cards to
building deeper commercial and corporate relationships.
The importance of, and role played by, KEB in Korean international business,
when linked with the HSBC Group's broader global network will provide the
leading platform to serve Korea's businesses and people internationally.
As a bank with a long history in Korea, and as the prospective majority
shareholder in one of the nation's largest financial institutions, the HSBC
Group intends to make a full contribution to the further development of the
financial services industry in Korea.
KEB's listing on the KRX will provide a continuing opportunity for Korean
investors to participate in KEB's future.
FINANCIAL IMPACT OF THE ACQUISITION ON HSBC
HSBC prepares its consolidated financial statements in accordance with IFRS as
endorsed by the European Union. Following completion of the Acquisition, HSBC
will make certain IFRS and fair value adjustments in respect of the KEB balance
sheet that will be included in HSBC's consolidated financial statements.
The Acquisition is to be financed from the HSBC Group's own resources. After
deducting for the cash consideration paid, total assets and total liabilities
for the HSBC Group will increase by the amount of total assets and liabilities
of the KEB Group respectively as adjusted for IFRS and fair value adjustments
and goodwill arising on consolidation. The minority interest recorded in the
HSBC Group's total equity will increase to reflect the shareholding in KEB not
owned by the HSBC Group. At 30 June 2007, KEB's total assets were KRW73.5
trillion (US$78.2 billion) as reported under Korean GAAP.
Based on HSBC's forecasts for the KEB Group as a member of the HSBC Group, the
acquisition is expected to be earnings per share accretive in its first full
year of operations within the HSBC Group.
GENERAL INFORMATION
HSBC Holdings plc
Headquartered in London, the HSBC Group is one of the largest banking and
financial services organisations in the world. Its international network
comprises some 10,000 properties in 83 countries and territories in Europe; Hong
Kong; rest of Asia-Pacific, including the Middle East and Africa; North America
and Latin America. With listings on the London, Hong Kong, New York, Paris and
Bermuda stock exchanges, shares in HSBC are held by about 200,000 Shareholders
in over 100 countries and territories. The shares are traded on the New York
Stock Exchange in the form of American Depositary Shares. The HSBC Group
provides a comprehensive range of financial services to more than 125 million
customers through four customer groups and global businesses: Personal Financial
Services (including consumer finance); Commercial Banking; Corporate, Investment
Banking and Markets; and Private Banking.
The Hongkong and Shanghai Banking Corporation Limited is an indirect, wholly
owned subsidiary of the Company. HSBC Asia is a wholly owned subsidiary of The
Hongkong and Shanghai Banking Corporation Limited.
Lone Star
Lone Star is a Belgian incorporated holding company which holds the KEB Shares.
It is controlled by the general partner of Lone Star Fund IV (US) LP, and its
ultimate investors include the investors in Lone Star Fund IV (US) LP and other
institutional investors. Lone Star Funds is a family of private investment
limited partnerships established to facilitate investment by a group of
investors into financial and other assets.
KEXIM
KEXIM is an official export credit agency owned by the Korean government
providing comprehensive export credit and guarantee programmes to support Korean
enterprises in conducting overseas business.
Miscellaneous
To the best of the knowledge, information and belief of the Directors having
made all reasonable enquiries, both (a) Lone Star and its ultimate beneficial
owners and (b) KEXIM and its ultimate beneficial owners are third parties
independent of HSBC and its connected persons (as defined under the Hong Kong
Listing Rules).
ADDITIONAL INFORMATION
Your attention is drawn to the information set out in the Appendix to this
circular.
Yours faithfully
S K Green
Group Chairman
Appendix - General Information
1. RESPONSIBILITY STATEMENT
This circular includes particulars given in compliance with the
Hong Kong Listing Rules for the purpose of giving information with
regard to the Company. The Directors collectively and individually
accept full responsibility for the accuracy of the information
contained in this circular and confirm, having made all reasonable
enquiries, that to the best of their knowledge and belief there are
no other facts the omission of which would make any statement herein
misleading.
2. DIRECTORS' INTERESTS AND SHORT POSITIONS IN SECURITIES
According to the register of Directors' interests maintained by HSBC
pursuant to section 352 of the SFO of Hong Kong, the Directors had the
following interests at the Latest Practicable Date, all beneficial
unless otherwise stated, in the shares and loan capital of HSBC and its
associates:
HSBC Ordinary Shares
Beneficial Child Percentage of
owner under 18 Controlled Jointly with Total Ordinary Shares
or spouse corporation Trustee another person interests(1) in issue
J D Coombe 12,408 - - 33,799(2) - 46,207 0.00
Baroness Dunn 153,527 - - 28,650(2) - 182,177 0.00
D J Flint 82,643 - - 29,032(3) - 111,675 0.00
W K L Fung 328,000 - - - - 328,000 0.00
M F Geoghegan 383,019 - - - - 383,019 0.00
S K Green 486,693 - - - 45,355 532,048 0.00
J W J Hughes-Hallett - - - 670,477(2) - 670,477 0.01
Sir Brian Moffat - - - - 17,613 17,613 0.00
Sir Mark Moody-Stuart 5,000 840 - 5,000(2) - 10,840 0.00
G Morgan 50,000 - - - - 50,000 0.00
S W Newton 5,847 - 50,461 - - 56,308 0.00
S M Robertson 5,266 - - 93,000(2) - 98,266 0.00
Sir Brian Williamson 22,942 - - - - 22,942 0.00
Notes:
1 Details of executive Directors' other interests in HSBC Ordinary
Shares arising from the HSBC Holdings Savings-Related Share Option
Plan, the HSBC Holdings Restricted Share Plan 2000 and The HSBC
Share Plan are set out below. As at the Latest Practicable Date,
the aggregate interests under the SFO of D J Flint, M F Geoghegan
and S K Green in HSBC Ordinary Shares (each of which represents
less than 0.02 per cent of the shares in issue), including
interests arising through employee share plans were:
D J Flint - 868,984; M F Geoghegan - 1,496,522; and S K Green -
1,695,045.
2 Non-beneficial.
3 Non-beneficial interest in 9,678 HSBC Ordinary Shares.
Options over HSBC Ordinary Shares
As at the Latest Practicable Date, the following Directors have been
granted, and have outstanding, options over HSBC Ordinary Shares under
an all-employee share plan. The options were awarded for nil
consideration and are exercisable at a 20 per cent discount to the
average market value of HSBC Ordinary Shares on the five business
days immediately preceding the invitation date. Options may be
advanced to an earlier date in certain circumstances, e.g. retirement.
HSBC Holdings Savings-Related Share Option Plan
Ordinary Shares Date of Exercise Exercisable Exercisable
under option award price (GBP) from until
D J Flint 2,310 25 Apr 2007 7.0872 1 Aug 2012 31 Jan 2013
S K Green 3,070 23 Apr 2003 5.3496 1 Aug 2008 31 Jan 2009
Under the SFO, the options are categorised as unlisted physically
settled equity derivatives.
HSBC Holdings Restricted Share Plan 2000
Date of Year in which
Awards of Ordinary Shares(1) award awards may vest
D J Flint 134,885 5 Mar 2003 2008
M F Geoghegan 62,948 5 Mar 2003 2008
S K Green 134,885 5 Mar 2003 2008
Vesting of these awards is subject to the attainment of predetermined
corporate performance conditions as set out in the Annual Report and
Accounts 2006. Under the SFO, interests held through the
HSBC Holdings Restricted Share Plan 2000 are categorised as the
interests of a beneficiary of a trust.
Note:
1 Includes additional Ordinary Shares arising from scrip dividends.
The HSBC Share Plan
Date of Year in which
Awards of Ordinary Shares(1) award awards may vest
D J Flint 192,927 27 May 2005 2008
173,614 6 Mar 2006 2009
253,573 5 Mar 2007 2010
M F Geoghegan 257,236 27 May 2005 2008
217,018 6 Mar 2006 2009
576,301 5 Mar 2007 2010
S K Green 321,544 27 May 2005 2008
271,272 6 Mar 2006 2009
432,226 5 Mar 2007 2010
Vesting of these awards is subject to the attainment of predetermined
corporate performance conditions as set out in the Annual Report and
Accounts 2006. Under the SFO, interests held through The HSBC Share Plan
are categorised as the interests of a beneficiary of a trust.
Note:
1 Includes additional Ordinary Shares arising from scrip dividends.
M F Geoghegan has an interest as beneficial owner in 280,000 ordinary
shares of HK$5.00 each in Hang Seng Bank Limited (representing less
than 0.02 per cent of the shares in issue). S-K-Green has an interest
as beneficial owner in EUR75,000 of HSBC Holdings plc 5-1/2 per cent
Subordinated Notes 2009.
As directors of HSBC France, S K Green and M F Geoghegan each have
an interest as beneficial owner in one share of EUR5 in that company
(representing less than 0.01 per cent of the shares in issue). These
Directors have waived their rights to receive dividends on these shares
and have undertaken to transfer these shares to HSBC on ceasing to be
directors of HSBC France.
As a director of HSBC Private Banking Holdings (Suisse) SA, S K Green
has an interest as beneficial owner in one share of CHF1,000 in that
company (representing less than 0.01 per cent of the shares in issue).
S K Green has waived his rights to receive dividends on the share and
has undertaken to transfer the share to HSBC on ceasing to be a director
of HSBC Private Banking Holdings (Suisse) SA.
Save as disclosed above, none of the Directors had, as at the Latest
Practicable Date, any interests or short positions in the shares,
underlying shares and debentures of the Company or any of its associated
corporations (within the meaning of Part XV of the SFO) which would
have to be notified to the Company and the Stock Exchange pursuant to
Divisions 7 and 8 of Part XV of the SFO (including interests or short
positions which they were taken or deemed to have under such provisions
of the SFO), or which were recorded in the register required to be
kept by the Company under Section 352 of the SFO, or which were required
to be notified to the Company and the Stock Exchange pursuant to the
Model Code for Securities Transactions by Directors of Listed
Companies adopted by the Company.
3. SHAREHOLDERS' INTERESTS AND SHORT POSITIONS
There are no interests or short positions in the shares or underlying
shares of the Company which have been disclosed to the Company under
the provisions of Divisions 2 and 3 of Part XV of the SFO. So far as
is known to any Director of the Company, as at the Latest Practicable
Date, the following persons were interested in 10 per cent or more of
the nominal value of any class of share capital carrying rights to vote
in all circumstances at general meetings of the respective HSBC Group
company:
Percentage Interest in share
capital of
Group Company Shareholder Group Company
Almacenadora Hondurena S.A. (Almahsa) Rosa Rivera de Smith (Q.E.P.D.) 17.69
Cirflex SA Adage SA 13.736
Banco de Inversion y Serv. Financieros 16.556
Financiere Ombelle Prevoir Vie 10
Ste Groupe Guy Gendrot 10
HSBC (Hellas) AEDAK J V Vezanis 27
HSBC Alpha Funding (UK) Limited Pearwood LLC 29.975
HSBC Amanah Takaful (Malaysia) Sdn Bhd Jerneh Asia Berhad 31
Employees Provident Fund Board 20
HSBC Bank Armenia cjsc Wings Establishment 30
HSBC Bank Georgia JSC Wings Establishment 30
HSBC Corporate Advisory (Malaysia) Sdn Bhd Dato' Sulaiman bin Sujak 30
HSBC Land Title Agency (USA) LLC Prime Land Services L.L.C. 45
HSBC Middle East Finance Company Limited H H The Late Ruler of Dubai 20
HSBC New York Life Seguros de Retiro New York Life International LLC 40
(Argentina) S.A.
HSBC New York Life Seguros de Vida New York Life International LLC 40
(Argentina) S.A.
HSBC Rose Funding (UK) Limited Bank of America NA 19.925
HSBC Trinkaus & Burkhardt AG Landesbank Baden-Wurttemberg 20.3
Kirk Management Limited W.P. Stewart & Company Limited 40
Maxima S.A. AFJP New York Life International LLC 39.99
Primer Grupo Energetico Banco General 25
PT HSBC Securities Indonesia P.T. Bogamulia Nagadi 15
SNC Les Oliviers D'Antibes Societe Cristolienne De Participations 40
SNC Nuku-Hiva Bail Caisse Federale du Credit Mutuel de Maine Anjou et 20
Basse Normandie
Tower Investment Management International Finance Corp. 10
Transacciones Hondurenas en Bolsa S.A. Rosa Rivera de Smith (Q.E.P.D.) 17.69
(Transbolsa)
Way Chong Finance Limited Dah Chong Hong, Limited 49.99
4. COMPETING BUSINESS INTERESTS OF DIRECTORS
None of the Directors or their respective associates had, as at the
Latest Practicable Date, any interest in a business which competes,
or is likely to compete either directly or indirectly, with the business
of the Company and its subsidiaries.
5. LITIGATION
On 27 July 2007, the UK Office of Fair Trading issued High Court
legal proceedings against a number of UK financial institutions,
including HSBC Bank plc (a wholly owned subsidiary of HSBC), to
determine the legal status and enforceability of certain of the charges
applied to their personal customers in relation to unauthorised
overdrafts (the "Charges). The proceedings were commenced with the
agreement of all parties concerned. Proceedings are at a very early
stage, and may (if appeals are pursued) take a number of years to
conclude. A range of outcomes are possible, depending upon the High
Court's assessment of each Charge across the period under review.
HSBC Bank plc considers the Charges to be and to have been valid and
enforceable, and intends strongly to defend its position. It is
impossible at this stage to predict accurately the outcome of
the litigation or whether the proceedings will have any financial
impact and, if so, the size of that impact but on the basis of facts
currently available and the advice received the financial impact
on HSBC Bank plc and the Company is not considered to be material.
Certain members of the HSBC Group are party to legal actions in a
number of jurisdictions including the UK, Hong Kong and the US,
arising out of its normal business operations. HSBC considers that
none of the actions is regarded as material, and none is expected to
result in a significant adverse effect on the financial position of
HSBC, either individually or in the aggregate. Management believes
that adequate provisions have been made in respect of such litigation.
HSBC has not disclosed any contingent liability associated with these
legal actions in aggregate because it is not practicable to do so.
6. SERVICE CONTRACTS
As at the Latest Practicable Date, save as disclosed below, none
of the Directors has any existing or proposed service contract with
any member of the HSBC Group which may not be terminated by the HSBC
Group within one year without the payment of compensation (other than
statutory compensation).
S K Green is subject to a reciprocal 12-month notice period to terminate
his employment. M F Geoghegan's contract is due to expire on
15 March 2009 unless terminated prior to such date by either party
giving to the other 12 months' notice or extended by mutual agreement.
Both contracts contain payment in lieu of notice (PILON) provisions
which can be exercised at HSBC's discretion, such payment comprising
an amount equal to 175 per cent of base salary (excluding all benefits)
for the notice period. Under both contracts a pro-rated bonus is
payable on termination of employment (other than where termination
results from the Director's resignation, save where this occurs in
the 12 months following a change of control of HSBC) in respect of the
bonus year in which the employment terminates. The minimum pro-rated
bonus payable will be calculated as the average of the annual
discretionary cash bonuses (based on individual and Group
performance) paid to the relevant Director in respect of the two
bonus years prior to the year in which their employment terminates.
D J Flint is entitled to receive 12 months' notice to terminate his
employment and is required to give nine months' notice. Mr Flint's
contract contains a PILON provision which can be exercised at HSBC's
discretion, such payment comprising an amount equal to base salary and
pension contributions (excluding bonus and other benefits) for the
duration of the applicable notice period.
7. MISCELLANEOUS
(a) The Group Company Secretary is Ralph Gordon Barber, FCIS.
(b) The Qualified Accountant of the Company is Douglas Jardine Flint,
Group Finance Director, CBE, CA FCMA PMD (Harvard).
(c) The registered office of the Company is at 8 Canada Square, London
E14 5HQ, United Kingdom.
(d) The English text of this circular shall prevail over the Chinese text,
in the case of any inconsistency.
8. COPIES OF THE CIRCULAR
Shareholders may at any time choose to receive corporate communications
in printed form or to receive a notification of its availability on
HSBC's website. To receive future notifications of the availability
of a corporate communication on HSBC's website by email, or revoke or
amend an instruction to receive such notifications by email, go to
www.hsbc.com/ecomms. If you received a notification of the
availability of this document on HSBC's website and would like to
receive a printed copy, or would like to receive future corporate
communications in printed form, please write to the appropriate
Registrars at the address given below. Printed copies will be provided
without charge.
Further copies of this circular and a Chinese translation of this
and future documents may be obtained on request from the Registrars.
Please also contact the Registrars if you have received a Chinese
translation of this document and do not wish to receive such
translations in the future.
Principal Register Hong Kong Overseas Branch Register Bermuda Overseas Branch Register
Computershare Investor Computershare Hong Kong Corporate Shareholder Services
Services PLC Investor Services Limited The Bank of Bermuda Limited
PO Box 1064 Hopewell Centre 6 Front Street
The Pavilions Rooms 1806-1807, 18th Floor Hamilton HM 11
Bridgwater Road 183 Queen's Road East Bermuda
Bristol BS99 3FA Wan Chai
United Kingdom Hong Kong
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
HSBC Holdings plc
By:
Name: P A Stafford
Title: Assistant Group Secretary
Date: 21 September, 2007