SHANGHAI, June 14 — Haitong International Securities Group Ltd has cut ties with UBS Group AG, two people at Haitong told Reuters today, 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 — 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’ apology and calling for a boycott.
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.”
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 today.
Yesterday, 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. — Reuters