Monday, July 27, 2009

The Standard:61pc of minibond investors undecided on offer

27 July 2009

Investors who bought Lehman Brothers minibonds appear to be softening their stance on the banks' repurchase scheme.

According to the preliminary results of a survey conducted by the Democratic Party at a meeting yesterday, 61 percent of 431 investors are now undecided on whether or not to accept the banks' scheme, while 27 percent plan to reject the offer and just 11 percent will accept it. Previously the investors were overwhelmingly against accepting the plan.

Some 29,000 investors _ more than 90 percent of Hong Kong minibond investors _ will be refunded about 70 percent of their original investments, financial regulators said last week.

``I will not pursue litigation as I don't want to get entangled with the bank,'' an investor surnamed Lee said at yesterday's meeting.

The political party estimated more than 1,200 minibond investors attended the two sessions it held.

Investors also criticized the Hong Kong Monetary Authority and the Securities and Futures Commission for not making clear the requirements for claiming their money back. ``It's confusing as an HKMA staffer told me on phone I am a professional investor if I've invested HK$8 million,'' an investor surnamed Yu said. ``However, another person from the HKMA said the next day that it depends on whether we have signed documents to describe ourselves as professional investors.''

On concern over the definition of ``professional investors,'' HKMA executive director Raymond Li Ling-cheung said on Saturday that investors with more than HK$8 million in investments will not be classified as ``professional'' as long as they have not signed any documents to say they are professional investors.

``I advised investors not to make their final decision in a hurry as they have 60 days to consider the offer after banks inform them in early August,'' said legislator Kam Nai-wai.

Meanwhile, a representative of a group of Lehman underlying equity- linked notes investors said they hope to meet Secretary for Financial Services and the Treasury Ceajer Chan Ka-keung today and they will hold a meeting themselves on August 2, according to Sing Tao Daily, sister publication of The Standard.

A spokesman for the secretary said yesterday: ``Resources from the two regulators could focus on misselling complaints of other non-minibond structured products.''

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