The Standard: Minibond fury hits BOCHK

22 May 2009

 

Hundreds of Lehman minibond holders vented their anger at Bank of China (Hong Kong) (2388) and demanded a faster settlement although the lender said more than 2,000 cases have been resolved. BOCHK was the largest distributor of the Lehman Brothers-linked products in the territory.

The minibond holders yesterday gathered outside the Hong Kong Convention and Exhibition Centre, Wan Chai, where the bank was holding its annual shareholders' meeting, as well as at its headquarters, demanding that cases be wrapped up soon.

Bank management came under fire at the meeting with half the questions related to the minibonds controversy.

``You said you are concerned about the issue, but you are just paying lip service,'' one shareholder said.

President He Guangbei replied that the bank has already deployed resources to deal with the matter.

``We are handling the issue actively and seriously and hope to settle the cases as soon as possible,'' He said.

An internal audit committee has been set up, and discussions with regulators are continuing.

But He could not give a settlement timetable.

The bank denied speeding up settlements and raising the starting point for resolving the issue because of political pressure _ a claim made by Peter Chan Kwong-yue, chairman of the Alliance of Lehman Brothers Victims.

``We are handling each case individually as each has a different claims level,'' He said.

Chan claimed that since April 1 the bank has sped up the process and raised the starting level of claims from 10-20 percent to 50 percent to avoid protests on the anniversary of the handover.

The BOCHK chief declined to say whether it will have to fork out more on Lehman-related issues in 2009, after last year's HK$700 million.

``The expenses last year covered costs that might also be incurred this year,'' He said.

Separately, the bank said it has no plans as yet to issue yuan bonds locally and its parent, Bank of China (3988), has no plans to privatize BOCHK.