Friday, January 23, 2009
HK brokerage agrees to refund minibond buyers
By Tom Mitchell in Hong Kong
Published: January 23 2009 04:22 | Last updated: January 23 2009 04:22
A Hong Kong brokerage has agreed to refund retail investors in full for their losses on so-called “Lehman Brothers Minibonds”, in a settlement that will set a worrying precedent for other financial institutions in the territory that have sold about $2bn worth of the controversial investment products.
In a deal reached with Hong Kong’s market regulator, the Securities and Futures Commission, Sun Hung Kai Investment Services agreed to refund $11m to more than 300 buyers of the minibonds, which are in fact complex derivative instruments linked to the now defunct US investment bank.
The agreement goes beyond calls by the Hong Kong government last year for banks to repurchase the instruments at their “market value”. Instead, Sun Hung Kai will repay investors their entire principal. Twenty-four banks and brokerages, led by Bank of China’s Hong Kong branch, sold Lehman Brothers minibonds with an estimated face value of $2bn to more than 40,000 investors.
“We are very pleased with the outcome that has been achieved and we believe the approach adopted has produced a result which is in the best interests of the investors,” Martin Wheatley, SFC chief executive, said in a statement.
The controversy surrounding the mini-bonds has sparked a political firestorm in Hong Kong, with burned investors descending regularly on bank offices, SFC headquarters and the territory’s legislature. Many have lost their life savings and claim that the risky minibonds were mis-sold by bank and brokerage staff.
While Sun Hung Kai did not admit to any wrongdoing in its settlement with the SFC, the brokerage acknowledged concerns raised by the regulator including inadequate due diligence, training of sales staff and record keeping.
“We achieved an outcome which we believe represents the best possible solution for our minibond customers,” Lee Seng-huang, Sun Hung Kai executive chairman, said. “We understand it has not been an easy time for all concerned, but we believe that this voluntary initiative will bring closure to our affected customers, particularly in light of this challenging economic environment.”
The Hong Kong Monetary Authority, the territory’s bank regulator, has received about 20,000 complaints related to the sale of minibonds. As of January 15 the authority had formally opened more than 4,500 investigations and referred 251 cases to the SFC for possible enforcement action.
Hong Kong’s politicians have also leapt into the fray, working with the protesters and forming a special legislative subcommittee to look into the controversy.
Published: January 23 2009 04:22 | Last updated: January 23 2009 04:22
A Hong Kong brokerage has agreed to refund retail investors in full for their losses on so-called “Lehman Brothers Minibonds”, in a settlement that will set a worrying precedent for other financial institutions in the territory that have sold about $2bn worth of the controversial investment products.
In a deal reached with Hong Kong’s market regulator, the Securities and Futures Commission, Sun Hung Kai Investment Services agreed to refund $11m to more than 300 buyers of the minibonds, which are in fact complex derivative instruments linked to the now defunct US investment bank.
The agreement goes beyond calls by the Hong Kong government last year for banks to repurchase the instruments at their “market value”. Instead, Sun Hung Kai will repay investors their entire principal. Twenty-four banks and brokerages, led by Bank of China’s Hong Kong branch, sold Lehman Brothers minibonds with an estimated face value of $2bn to more than 40,000 investors.
“We are very pleased with the outcome that has been achieved and we believe the approach adopted has produced a result which is in the best interests of the investors,” Martin Wheatley, SFC chief executive, said in a statement.
The controversy surrounding the mini-bonds has sparked a political firestorm in Hong Kong, with burned investors descending regularly on bank offices, SFC headquarters and the territory’s legislature. Many have lost their life savings and claim that the risky minibonds were mis-sold by bank and brokerage staff.
While Sun Hung Kai did not admit to any wrongdoing in its settlement with the SFC, the brokerage acknowledged concerns raised by the regulator including inadequate due diligence, training of sales staff and record keeping.
“We achieved an outcome which we believe represents the best possible solution for our minibond customers,” Lee Seng-huang, Sun Hung Kai executive chairman, said. “We understand it has not been an easy time for all concerned, but we believe that this voluntary initiative will bring closure to our affected customers, particularly in light of this challenging economic environment.”
The Hong Kong Monetary Authority, the territory’s bank regulator, has received about 20,000 complaints related to the sale of minibonds. As of January 15 the authority had formally opened more than 4,500 investigations and referred 251 cases to the SFC for possible enforcement action.
Hong Kong’s politicians have also leapt into the fray, working with the protesters and forming a special legislative subcommittee to look into the controversy.
Thursday, January 22, 2009
Comparing US Departments with Singapore Ministries
Here is a comparison of the US departments with the Singapore ministries.
The US has a Department of Justice which is similar to our Ministry of Law. Perhaps, there is a difference in emphasis?
Obama Whistle Stop Tour
Watch this short video.
It is truly inspirational ... what a Government should be.
Wednesday, January 21, 2009
Make a donation from your 100% compensation
In America, some lawyers are willing to take a case on a contingency fee. If they win the case, they receive 10% to 30% of the amount recovered. If they lose the case, the client only pay the expenses.
Some noteholders are interested to engage lawyers on a contingency fee to recover their money. But contingency fee is not allowed in Singapore.
Think again. Many volunteers have spent several hundred hours of time and their expertise to help the noteholders to recover their money, without any promise of payment. As a result of their work, 1,280 of the noteholders will be getting back 100% compensation.
I like to ask these noteholders to consider giving a donation, if you have directly benefit from the work of any specific volunteer. This is just a small donation (far smaller than the contingency fee expected by the lawyer). It is for the volunteer to decide if they wish to accept it. Some of the volunteers are able to spend the time because they are not working. They do need an income.
If you wish to make a general donation of say 5%, I will put the money in the legal fund to engage a senior counsel or queens counsel to give a legal opinion to help the other noteholders. If there is any balance in the legal fund, I will contribute it to the financial services consumer association (FISCA) that will be establised to provide financial education to the public.
If you wish to make a contribution to the legal fund or any volunteer, you can contact me at kinlian@gmail.com. I will appoint someone to manage the accounts. Be generous. Remember - you could be one of the noteholders who has been rejected or have been offered inadequate compensation.
Honesty and fair play
My friend told me this story. A businessmen and a Government official were very happy. They have found a way to make a few million dollars for the businessman to import of rice into the country through a licence given by the official and to share the illegal profit in an overseas bank account.
My friend said that the illegal profit will have to be borne by the poor people who have to pay a higher price for the rice. He is sad that people can be so happy to make profit from the suffering of the poor people.
My friend said that the illegal profit will have to be borne by the poor people who have to pay a higher price for the rice. He is sad that people can be so happy to make profit from the suffering of the poor people.
This does not refer to Singapore.
Obama: the price and promise of citizenship
For as much as government can do and must do, it is ultimately the faith and determination of the American people upon which this nation relies. It is the kindness to take in a stranger when the levees break, the selflessness of workers who would rather cut their hours than see a friend lose their job which sees us through our darkest hours. It is the firefighter's courage to storm a stairway filled with smoke, but also a parent's willingness to nurture a child, that finally decides our fate.
Our challenges may be new. The instruments with which we meet them may be new. But those values upon which our success depends - hard work and honesty, courage and fair play, tolerance and curiosity, loyalty and patriotism - these things are old. These things are true. They have been the quiet force of progress throughout our history. What is demanded then is a return to these truths. What is required of us now is a new era of responsibility - a recognition, on the part of every American, that we have duties to ourselves, our nation, and the world, duties that we do not grudgingly accept but rather seize gladly, firm in the knowledge that there is nothing so satisfying to the spirit, so defining of our character, than giving our all to a difficult task.
This is the price and the promise of citizenship.
Our challenges may be new. The instruments with which we meet them may be new. But those values upon which our success depends - hard work and honesty, courage and fair play, tolerance and curiosity, loyalty and patriotism - these things are old. These things are true. They have been the quiet force of progress throughout our history. What is demanded then is a return to these truths. What is required of us now is a new era of responsibility - a recognition, on the part of every American, that we have duties to ourselves, our nation, and the world, duties that we do not grudgingly accept but rather seize gladly, firm in the knowledge that there is nothing so satisfying to the spirit, so defining of our character, than giving our all to a difficult task.
This is the price and the promise of citizenship.
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