Haitong Intl Securities cuts business with UBS after comment on Chinese pigs -sources (updated)

Haitong International Securities

14/06/2019 06:29

(Adds HKCSA comments, UBS apology, background; changes media
information)
    BEIJING/SHANGHAI, June 14 (Reuters) - Haitong International
Securities Group Ltd  0665.HK  has cut ties with UBS Group AG
 UBSG.S , two people at Haitong told Reuters on Friday,
following a comment about Chinese pigs by the Swiss bank's
global chief economist that was perceived by some as a racist
slur.
    Lin Yong, chief executive of Haitong International - the
Hong Kong unit of Chinese brokerage Haitong Securities Co Ltd
 600837.SS  - announced the decision on his personal WeChat
account, said a Haitong employee who saw the post.
    The decision was also announced in an internal email
circulated among Haitong International staff, a second Haitong
employee told Reuters.
    A flippant reference to pigs in an inflation analysis by the
economist caused a furore in China, with some in the financial
community rejecting UBS's apology and calling for a boycott.
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    Paul Donovan, global chief economist of the Swiss bank's
wealth management department since 2016, said in a podcast on
Wednesday that consumer prices had risen mainly due to sickness
among pigs.
    "Does this matter? It matters if you are a Chinese pig. It
matters if you like eating pork in China," Donovan said.
    Following the furore, UBS issued an apology.
    "We apologise unreservedly for any misunderstanding caused
by these innocently intended comments by Paul Donovan. We have
removed the audio comment from circulation. To be clear, this
comment was about inflation and Chinese consumer prices rising,
which was driven by higher prices for pork," it said in a
statement emailed to Reuters.
    "UBS takes this matter seriously. We are enhancing our
internal processes to avoid any recurrence of a similar
situation. We remain fully committed to investing in China."
    
    DISMISSAL
    Lin is also the president of the Chinese Securities
Association of Hong Kong (HKCSA), whose 124 member firms include
offshore subsidiaries of Chinese brokerages and fund houses.
    The association said it was not aware of any other members
making a similar decision when contacted by Reuters on Friday.
    On Thursday, HKCSA said it had demanded UBS dismiss Donovan
and issue a formal apology from the board, while calling
companies and individuals to consider carefully when it comes to
conducting business with UBS.
    "Regrettably, this information (UBS's apology) is not only
insincere, but also arrogant, again hurting the feelings of
Chinese people," it said in an open letter addressed to the UBS
board.
    Neither Lin nor Haitong responded to emails and telephone
calls seeking comment. The Haitong employees were not authorised
to speak to media and so declined to be identified.
    When asked about Haitong's decision, UBS resent the apology
it previously issued without providing further comment.
    China is a key market for UBS in Asia. Last year, the Swiss
bank became the first foreign bank, under new rules, to be
allowed to take majority control of its securities joint venture
on the mainland.

($1 = 7.8279 Hong Kong dollars)

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UBS global chief economist grilled in China for comment on pigs 
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 (Reporting by Samuel Shen, Xiangming Hou and Ryan Woo; Writing
by Yawen Chen; Additional Reporting by Cheng Leng, Stella Qiu
and Jennifer Hughes; Editing by Muralikumar Anantharaman and
Christopher Cushing)
 ((yawen.chen@thomsonreuters.com; +86 10 5669 2126; Follow me on
Twitter https://twitter.com/ywchen1;))