HSBC Holdings PLC (LSE:HSBA) has been forced to give its shareholders a vote on a proposal by Hong Kong investors to require the bank to conduct a strategic overhaul, including a spin-off of the Asian business.
The vote was requested by Ken Lui, an investor who runs a group campaigning for a spin-off of the Asian arm.
The bank’s shareholders will also vote on another resolution he has tabled, calling for the bank to increase its dividends back to pre-Covid levels.
The Asian-focused lender has faced a year-long campaign, sparked by intervention from its largest shareholder, the Chinese insurer Ping An, to break off its Asian operations from the rest of the business, which employs more than 200,000 people in 64 countries.
It is not clear whether the Chinese insurer will use its 9% holding to back Lui, who has said that he had “not engaged with Ping An at all”.
In the notice to shareholders ahead of its AGM on 5 May, first reported by the Sunday Times, the board recommended that investors vote against an Asian spin-off, saying it had already considered “strategic reorganisation, and restructuring of the company’s Asia businesses” in 2022.
“The board concluded that all of these structural reforms would significantly dilute the economics of our international business model upon which our strategy is based,” it said. “This would result not only in a material loss of value for shareholders but also lower dividends.”