Korean conglomerate LG Innotek has appointed HSBC as its cash management provider for its subsidiaries in mainland China. LG Innotek manufactures electronic components for mobile phones, computers, wireless communications products and cars, and is more commonly known as LG.
“We are thrilled to be partnering with LG Innotek. As innovative Korean chaebols like LG Innotek expand into China, they are able to leverage on HSBC’s extensive network and in depth local knowledge of key regulatory issues,” said HSBC's new head of global payments and cash management in China, Kee Joo Wong in a statement. “As China’s largest foreign bank, we are well positioned as a global banking provider to offer quality cash management services and to fully support cross border solutions.”
“This partnership exemplifies our commitment to our clients in Korea, no matter whether they are a domestic business of whether they are looking to expand overseas,” added Sunil Veetil, HSBC’s recently appointed head of global payments and cash management in Korea. “HSBC will continue to offer our clients integrated cash management solutions tailored specifically to meet their increasingly complex requirements.”
HSBC will provide renminbi and US dollar cash pooling services to three of LG Innotek’s subsidiaries in China, located in Fuzhou, Huizhou and Yantai. Each subsidiary will be able to reduce its financial costs significantly by sharing working capital and minimising external borrowings.
This alliance is the first US dollar cash pooling solution approved by the Guangdong branch of the State Administration of Foreign Exchange (Safe) since the new regulation on centralised foreign currency funds management was issued in October last year.
“Our headquarters in Seoul will be able to directly manage the liquidity of our Chinese subsidiaries through HSBC’s innovative cash management solution. This will greatly reduce our financial expenses, enhance financial transparency and strengthen control over our local subsidiaries, which in turn will contribute to our growth throughout the region,” said Park Hui Chang, LG Innotek’s chief financial officer, in a statement. “With this partnership, I am confident that LG Innotek will be able to enhance our global competitiveness to become one of the largest electronic components manufacturers by 2015.”
In another move, Puneet Gupta was appointed HSBC’s head of global payments and cash management in Vietnam. He joins the team from HSBC’s securities services business in Vietnam and reports to regional head John Laurens.
HSBC has announced three global payments and cash management appointments in as many weeks with Veetil and Herani Hermawan heading the businesses in Korea and Indonesia respectively and Kee Joo Wong and Nigel Raymont leading the teams in China and Thailand respectively.
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