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Hong Kong court rules against OCBC unit in mis-selling case
[SINGAPORE] Hong Kong's High Court ruled against Oversea-Chinese Banking Corp's private bank in a mis-selling case, saying the unit and a relationship manager had breached their contractual duty towards an elderly couple who lost money on investments made with ING Asia Private Bank.
In a court judgment dated Aug 8, the court said Bank of Singapore and banker Yvetti Chau Kwan-siu had failed "to exercise reasonable care and skill" in assessing the couple's investment objectives and risk appetite, in offering them unsuitable investments and in failing to warn them of the risks.
The couple, Chang Pui-yin and his wife, Theresa Linda Chang Chen, said they suffered substantial losses on investments made with ING Groep NV's private bank between 2004 and 2008, when the global financial crisis erupted.
ING's Asian private-banking unit was bought by OCBC in 2009 and is now part of its Bank of Singapore unit.
OCBC has enhanced controls and compliance linked to the ING assets following the purchase, Koh Ching Ching, OCBC's head of group corporate communications, said in a statement, noting that none of the transactions were made following the acquisition.
The investments included equity-linked notes, foreign-currency options and accumulative forwards, knock-out daily accumulators, high-yield bonds and equity options, the court ruling said.
The couple had been classed as "medium risk" investors by the bank, the ruling said.
"The Changs are wholly different from the vast majority of plaintiffs pursuing their private bankers in our courts," Judge Mohan Bharwaney wrote in the ruling.
"The Changs did not make informed choices. They entrusted their money" to Chau.
The court ordered an assessment of the couple's losses between 2004 and 2008. It also ordered the bank to pay the plaintiffs' trial costs.
"After OCBC Bank bought ING Asia Private Bank in 2009 and renamed it Bank of Singapore in 2010, policies, processes and people training and development were much enhanced to be in line with OCBC Bank's high standards of fair dealing and product suitability assessments," Ms Koh said in the statement.
Ms Chau couldn't be reached for comment.