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Friday, July 24, 2009
SCMP:Lehman inquiry to call SFC chief again
25 July 2009
The Legislative Council subcommittee investigating the Lehman Brothers minibond debacle will again summon the head of the Securities and Futures Commission to explain the HK$6.3 billion deal to repay thousands of investors.
Speaking after a closed-door meeting yesterday, the subcommittee's chairman, Raymond Ho Chung-tai, said it decided to summon the regulator's chief executive, Martin Wheatley, for an open hearing as early as Friday or early next month.
"It's because after announcing the repurchase proposal, we need to understand the deal thoroughly {hellip} and ask about the terms, which are unclear," Mr Ho said.
The 16 banks that sold Lehman Brothers minibonds will send letters to investors early next month, and investors will have 60 days to decide whether to accept the deal.
Mr Ho said the legislators therefore hoped to hold the hearing as soon as possible to obtain more information about the repurchase arrangement. The subcommittee also decided that Financial Secretary John Tsang Chun-wah would be the next to be summoned, Mr Ho said.
The SFC announced on Wednesday the HK$6.3 billion buyout deal, which covers 29,000 investors of Lehman Brothers minibonds.
Under the agreement, those who are over 65 years old will get 70 per cent of the value of their initial investment back, while those below 65 will get 60 per cent back. They will receive at least a further 10 per cent of their initial investment from the residual value of the collateral. Despite their name, minibonds are not corporate bonds but credit-linked derivatives whose worth depends on the health of the underlying assets.
Mr Ho said the subcommittee members had also agreed to extend the area of investigation to include investors' protection, the complaint mechanism and the penalty system for any violation of the law during the selling of financial products.
The subcommittee chairman reiterated that the agreement would not interrupt the subcommittee investigating the matter.
"Unlike previous Legco inquiries, this time the incident is developing and we need to make plans accordingly. But it will not halt our investigation," he said.
Although the subcommittee decided earlier to take a break next month, Mr Ho said that as a result of the latest development, meetings would continue during the summer as long as there were enough lawmakers on hand.
"A lot of members have told me they won't be in Hong Kong in August. But because this is something which has got very wide public attention and interest, we will try our best to find enough members," he said.
The Legislative Council subcommittee investigating the Lehman Brothers minibond debacle will again summon the head of the Securities and Futures Commission to explain the HK$6.3 billion deal to repay thousands of investors.
Speaking after a closed-door meeting yesterday, the subcommittee's chairman, Raymond Ho Chung-tai, said it decided to summon the regulator's chief executive, Martin Wheatley, for an open hearing as early as Friday or early next month.
"It's because after announcing the repurchase proposal, we need to understand the deal thoroughly {hellip} and ask about the terms, which are unclear," Mr Ho said.
The 16 banks that sold Lehman Brothers minibonds will send letters to investors early next month, and investors will have 60 days to decide whether to accept the deal.
Mr Ho said the legislators therefore hoped to hold the hearing as soon as possible to obtain more information about the repurchase arrangement. The subcommittee also decided that Financial Secretary John Tsang Chun-wah would be the next to be summoned, Mr Ho said.
The SFC announced on Wednesday the HK$6.3 billion buyout deal, which covers 29,000 investors of Lehman Brothers minibonds.
Under the agreement, those who are over 65 years old will get 70 per cent of the value of their initial investment back, while those below 65 will get 60 per cent back. They will receive at least a further 10 per cent of their initial investment from the residual value of the collateral. Despite their name, minibonds are not corporate bonds but credit-linked derivatives whose worth depends on the health of the underlying assets.
Mr Ho said the subcommittee members had also agreed to extend the area of investigation to include investors' protection, the complaint mechanism and the penalty system for any violation of the law during the selling of financial products.
The subcommittee chairman reiterated that the agreement would not interrupt the subcommittee investigating the matter.
"Unlike previous Legco inquiries, this time the incident is developing and we need to make plans accordingly. But it will not halt our investigation," he said.
Although the subcommittee decided earlier to take a break next month, Mr Ho said that as a result of the latest development, meetings would continue during the summer as long as there were enough lawmakers on hand.
"A lot of members have told me they won't be in Hong Kong in August. But because this is something which has got very wide public attention and interest, we will try our best to find enough members," he said.
Broadcast this message: Petition
Please broadcast this message to your contacts by email, Facebook and other social networks:
"Mr. Tan Kin Lian is organising a Petition to the Prime Minister to ask him to assist the investors to get similar compensation given to investors in Hong Kong. Please inform the people who are affected by the credit-linked notes to sign the Petition. The blog is www.tankinlian.blogspot.com".
"Mr. Tan Kin Lian is organising a Petition to the Prime Minister to ask him to assist the investors to get similar compensation given to investors in Hong Kong. Please inform the people who are affected by the credit-linked notes to sign the Petition. The blog is www.tankinlian.blogspot.com".
Cheated in a good reputation country
Dear (MAS officer)
I would like to share a story with your MAS people.
20 years ago, my father finished his army service and got a big sum money for his army service in China. The amount is equal to 5 years salary. He bought 10 years China government bond (国库券）with that money from a national bank. He thought China government bond was very safe and he only want to use it for his children's education need in the future. He locked those coupon with much care.
10 years later, when the bond matured, he brought the coupon to bank to cash out, the teller told him the coupon were faked. He can not get anything. What a big shock for him and his family. The teller from national bank sold him the faked coupon. The bank told him they could not find the teller any more. He was not the only unlucky person. Actually there are quite a lot of people faced the same. They together tried to ask help from bank, government, press, and law firm. Finally, a lawyer want to take their case. However, somebody threaten the lawyer and the press. The press stopped reporting their story and lawyer didn't dare to take their case.
His daughter thought this was a place without justice. She studied very hard to got in a good university and later left the place for what she thought was a better country.
However, what happened to her? She fell into the same trap. She didn't suspect that the famous Singapore financial institution would cheat people's money also. She clearly told the FI officer she needed government bond only as she was very conservative and she needed the money for her father's medical need. Her father is paralyzed now. However, The RM sold her toxic complicated product with a faked name "Bond".
She was worse hurt. Her father had to accept the unfair things that happened in a developing country. For her, she didn't prepared for such unfair things in this good reputation country.
If you, MAS people, the best educated and smartest people in Singapore, allowed such unfair things to continue, I won't cry for my money, but cry for your future. If the best educated, smartest people are not looking for justice, what is the future for this country?
Best Regard!
GD
I would like to share a story with your MAS people.
20 years ago, my father finished his army service and got a big sum money for his army service in China. The amount is equal to 5 years salary. He bought 10 years China government bond (国库券）with that money from a national bank. He thought China government bond was very safe and he only want to use it for his children's education need in the future. He locked those coupon with much care.
10 years later, when the bond matured, he brought the coupon to bank to cash out, the teller told him the coupon were faked. He can not get anything. What a big shock for him and his family. The teller from national bank sold him the faked coupon. The bank told him they could not find the teller any more. He was not the only unlucky person. Actually there are quite a lot of people faced the same. They together tried to ask help from bank, government, press, and law firm. Finally, a lawyer want to take their case. However, somebody threaten the lawyer and the press. The press stopped reporting their story and lawyer didn't dare to take their case.
His daughter thought this was a place without justice. She studied very hard to got in a good university and later left the place for what she thought was a better country.
However, what happened to her? She fell into the same trap. She didn't suspect that the famous Singapore financial institution would cheat people's money also. She clearly told the FI officer she needed government bond only as she was very conservative and she needed the money for her father's medical need. Her father is paralyzed now. However, The RM sold her toxic complicated product with a faked name "Bond".
She was worse hurt. Her father had to accept the unfair things that happened in a developing country. For her, she didn't prepared for such unfair things in this good reputation country.
If you, MAS people, the best educated and smartest people in Singapore, allowed such unfair things to continue, I won't cry for my money, but cry for your future. If the best educated, smartest people are not looking for justice, what is the future for this country?
Best Regard!
GD
Journalists refused to cover the Petition
I sent an email to notify the journalists on two occasions about the Petition concerning the credit linked notes. There were about 10 journalists in my mailing list. They have covered the credit linked notes previously.
None of the journalists replied to me. They also did not cover this effort. There was total silence on their part. This is a sad state of affairs.
None of the journalists replied to me. They also did not cover this effort. There was total silence on their part. This is a sad state of affairs.
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