The Securities and Futures Commission (SFC) of Hong Kong has refrained from taking regulatory action against HSBC on dividend cancellation saying that it lacked the grounds to do so.
HSBC suspended dividend distribution bowing down to regulatory pressure amid the Covid-19 crisis.
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However, HSBC shareholders revolted against the decision.
SFC issued the statement after getting enquiries and complaints from the investing public and professional bodies in Hong Kong regarding the move.
The complainants alleged that HSBC failed to protect the interests of shareholders.
They called for the compensation of shareholders who had to face substantial loss due to the bank’s decision.
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By GlobalDataComplainants also raised doubts about whether HSBC had discussions with the Bank of England timely regarding the scrapping of the fourth interim dividend.
The regulator said: “The SFC does not usually comment on individual cases.
“However, in light of the significant public interest in this matter, the SFC is issuing this statement to inform the public about the actions that the SFC has taken, including its communications with the Bank of England’s Prudential Regulation Authority (PRA) and HSBC.”
SFC said that matters associated with the banking and prudential supervision of HSBC is beyond its remit.
However, the watchdog raised the matter with HSBC and the Prudential Regulation Authority (PRA).
SFC said that PRA made the dividend cancellation request weighing several aspects such as the economic implications of Covid-19 and the need to protect the capital positions of firms.
According to the PRA, the dividend cancellation would benefit the Hong Kong and UK economies along with the global economy.
