6 Jun 2012
The former chief of the Hong Kong Monetary Authority (HKMA) Joseph Yam Chi-kong is likely to be reprimanded in an investigation report to be released by lawmakers today on the Lehman Brothers minibond scandal.
The report, to be tabled to the Legislative Council this morning after a probe into the saga that has lasted more than three years, is also expected to criticise major government figures including Financial Secretary John Tsang Chun-wah and Secretary for Financial Services Chan Ka-keung, as well as former Securities and Futures Commission chief executive Martin Wheatley.
But at least three lawmakers, including Jeffery Lam Kin-fung, Philip Wong Yu-hong and Abraham Shek Lai-him who are supporters of Yam, are said to have refused to sign the report and have vowed to table a minority report on the findings. All three did not return calls last night.
The lawmakers' minibond investigation was launched after Lehman Brothers collapsed in September 2008, leaving more than 43,000 Hong Kong investors facing losses after buying the product through local financial institutions.
Despite the name, minibonds are not corporate bonds, but risky derivatives linked to the credit of listed companies. Over 30,000 investors complained to the HKMA and Securities and Futures Commission, accusing the banks of not telling them about the risks.
A source familiar with the probe cited the report as saying that Yam had to bear the greatest responsibility. He mostly paid heed to maintaining the stability of the financial system and did not consider protecting small investors as one of his main tasks, a source said.
Many lawmakers disagreed with his paying so little heed to small investors.
The source said Wheatley was also blamed as the securities watchdog should have better regulated the financial institutions.
Tsang and Chan faced less severe criticism as the government was not the direct regulator.