HONG KONG – HSBC Holdings has told investors to vote against a proposal by an activist shareholder in Hong Kong to overhaul the company’s structure and spin off its Asian business.

Mr Ken Lui, who leads a group of 100 shareholders pushing for the changes, wants the bank to restore dividend payouts to at least 51 US cents a share and reorganise its Asian businesses.

The bank said last Friday that it will put the proposal before shareholders at its annual general meeting in Birmingham on May 5, and that its board recommends that investors vote against it.    

Mr Lui’s effort adds further pressure on the London-headquartered bank, which is pushing back against another move by top shareholder Ping An Insurance Group to radically revamp the lender.

The activist shareholders say HSBC’s business in Europe and the United States has “dragged down” overall performance while its Asian operations remain highly profitable, according to last Friday’s statement. 

They also cite the high cost of operating as a Britain-headquartered company and escalating tensions between China and the West as further justifications for spinning off the Asian business.

The board said the proposals led by Mr Lui are not in the best interests of the company and would “result not only in a material loss of value for shareholders, but also lower dividends”. BLOOMBERG