11 Nov 2009
HONG KONG: Some 16 banks have agreed to settle all complaints arising from the sale of Lehman Brothers non-minibond products by March next year, a Legislative Council's subcommittee heard yesterday.
Choi Yiu-kwan, the Monetary Authority's deputy chief executive, unveiled the latest agreement with the banks at a hearing of the subcommittee on the debacle arising from the sale of Lehman Brothers financial products.
In a payout plan proposed in July by the Securities and Futures Commission, the authority and the 16 banks, minibond holders can redeem at least 60 percent of the value of their initial investments.
The deal also required the banks to immediately put improved complaint-handling procedures in place to resolve complaints on the sale of structured financial products other than minibonds.
Choi said before the proposal of the payout deal on July 22, the authority completed an average of 130 complaints about the sale of non-minibond products a month.
Since the introduction of the deal, it has finished some 550 investigations into complaints about the sale of non-minbond products every month on average, he said.
But he added that some 4,450 complaints about the sale of non-minbond products and about 1,000 about the sale of minibonds are still under the authority's investigation.
He expected the regulator can complete a monthly average of at least 1,000 investigations into the sale of non-minibond products in the near future.
Choi said it is now difficult to tell whether a payment deal can be bargained for Lehman Brothers non-minibond holders, but he has the idea in mind.
Lawmaker Starry Lee Wai-king urged the financial regulator to hold regular talks with complainants to update them concerning progress on the investigation.
But Choi said holding regular meetings with individual investors will place a huge demand on manpower. He said such a commitment may slow down the progress of investigations.
To help monitor the business of local banks, Choi said the authority holds meetings with each local bank's board of directors once a year to analyze how well the firms perform compared with other institutions of similar levels and advise them on their management, especially in the area of risk management.
To encourage the financial institutions to work towards resolving this issue quickly, I would suggest that these financial institutions be required to place funds covering 80% of the Lehman mini bonds in an escrow account.
ReplyDeleteCustomers will then be allowed to withdraw 60% of the value of their mini bonds within 3-months and the remaining 20% in the following 3-months, no questions asked.
The onus should then lie with these financial institutions to then show cause (sophisticated investor, risk well spelt out, etc) why some of the mini bond holders do not deserve such a high payout i.e 60% or 80% within the allotted 3-mth or 6-mth time frame.
I am sure given the above framework, financial institutions will be able to come to a quick resolution to this unfortunate saga.
Get people boil reading such news.
ReplyDeleteLooks like Singapore has the potential to be the only country left in the world to leave the victims alone! Thanks to our supper efficient MAS and law makers!
ReplyDeleteHopefully something reasonable would be offered to the victims. Better late than never.
Just wonder how about the Town Councils who prided themselves "walking in with the eyes wide opened"? Do they deserve to receive anything? I guess they probably don't care one way or the other - after all it is not their money. But I have to say that if they knew that the products were of supper high risk with relatively small return, and yet they still bet millions on it, then they are being totally irresponsible. Somebody has to answer for it. If they feel that they were cheated like the other victims, then they ought to go after the FI's to get their (our) money back.
HK is not even a country, why they treat their people so nice?
ReplyDeleteWhy they treat their poeple so well.
OH, yes. If u remember correctly, someone seemed to say that urs is also not a country?? It is just a city in the SEA !!! in SEA.
At least HK has set a benchmark for the structured products - i.e. at least 60% of the original capital.
ReplyDelete""If it was seriously enforced from the start all these financial debacles would not have happened.
ReplyDeleteThe RMs and insurance agents would not have done their own way if it was forced upon the banks and the insurance companies.""
Such complex, risky products should not be offered to the public in the first place.
Whose fault??
Just make your votes count when the time is here.
ReplyDeleteAgree with 12 Nov 1.33pm, I gave up hope of ever getting my money back. I have exhausted all avenues I only have my vote left.
ReplyDeleteThe "minibomb" saga made all the flowery empty talks glaringly empty & pale.
ReplyDeleteDon't beleive the beautiful talks. See what are the actions.
How much Donald Tsang earn in a year serving the country? Compared this with our leaders. Why only compare their salary to the top 1% income earners in S'pore. Those top 1% has to leave their job when they make severe mistake or have their career prospect condemn and answer for mistakes! And don't create more GRC.
ReplyDelete