* LGIM becomes first major investor to support Knight
* Chambers offers praise for Knight's work in bank sector
* HSBC has rebuffed new approaches at recent meetings-source
By Raji Menon
LONDON, June 17 The largest shareholder in HSBC
(HSBA.L) has offered for the first time public support for
activist investor Eric Knight and urged the bank to answer
questions he has raised over the bank's strategy.
Knight Vinke, the activist investment firm run by Knight,
has been pressing HSBC management anew to conduct a wholesale
strategic review of the business, and has raised questions over
directors' bonuses and its U.S. business.
"Eric has asked some very sensible questions, well at least
some of his questions are sensible, and the market deserves a
response," said Legal & General Investment Management chief
executive Peter Chambers.
"Eric has done more work for the banking industry than
anybody else I know," he told journalists at a briefing.
A person familiar with the situation said HSBC had continued
to rebuff Knight Vinke's arguments in meetings conducted during
the last two weeks, and which involved LGIM.
A Legal & General spokesman declined to say whether
Chambers' comments had been prompted by any particular
"HSBC's strategy is clear and well understood by the market.
It is built on the foundation of maintaining financial strength
and we continue to focus on execution for the benefit of all our
stakeholders," an HSBC spokesman said.
According to Thomson Reuters data, LGIM holds 3.23 percent
of HSBC and is the largest investor ahead of Barclays Global
Investors and private Saudi group Saad.
Knight Vinke has always insisted it had support from major
shareholders but none had offered public backing until now.
In March, HSBC launched Britain's biggest rights issue of
12.85 billion pounds to help it overcome big losses in the
United States and exploit the woes of weaker rivals.
(Additional reporting by Joel Dimmock; Editing by Jon
(For the Hedge Hub blog: blogs.reuters.com/hedgehub)
(For Global Investing: