SCMP: Treasury chief becomes first to face Legco panel over minibonds

20 Feb 2009

Paggie Leung

 

Secretary for Financial Services and the Treasury Chan Ka-keung is expected to face tough questions over policies and regulation of financial products today when he makes his first appearance at the Legco subcommittee investigating the Lehman Brothers minibonds fiasco.

Professor Chan, who will be the first to face the 22-member subcommittee set up to study issues arising from Lehman Brothers-related products, will attend a three-hour open hearing from 10am.

The chairman of the subcommittee, Raymond Ho Chung-tai, said yesterday that questions would focus mainly on the government's regulatory framework for structured financial products and dealings in securities, the sale of minibonds, and its policies on investor protection.

"The minister will be accompanied by a legal adviser - Department of Justice deputy law officer Cathy Wong Pui-ming - and Cheng Yan-chee, deputy secretary for financial services and the treasury," Dr Ho said. A written statement that had already been submitted by Professor Chan would be made public after the secretary confirmed it as evidence.

Peter Chan Kwong-yue, chairman of Allied Victims of Lehman Products, hoped the investigation would force the government to take responsibility for its role in the debacle. "Until now, the government has not shown accountability," he said. "Why were all these high-risk derivatives allowed to be marketed and sold as low-risk financial products?"

Hong Kong investors lost billions of dollars on minibonds guaranteed by Lehman Brothers when the US investment bank went bankrupt in September 2008. Minibonds are not corporate bonds, but consist of high-risk, credit-linked derivatives. They are marketed as a proxy investment in well-known companies.

Mr Chan said the chief executive and the financial secretary, who urged banks to buy back all the minibonds, should also be summoned.

Professor Chan's deputy, Julia Leung Fung-yee, and the heads of the Monetary Authority and the Securities and Futures Commission will also testify. Witnesses will testify under oath.

Primary education is deficient

BBC report.

Strong turnout shows money matters

Read this BBC report

More news about FISCA will be announced soon.

Selling a property - some views

 1. The report is good for those who do not have the time to do some research. The content of the report can be obtained from various property websites.  

   2. This is an isolated case. I guess it's bad luck for the owner to get only 1 buyer who pressed down the price. The buyer has insider news.  

 3. There are situations where desperate sellers who wants to get rid of the property fastest at a discount in order to tie over a crisis. Perhaps the price this agent brought in was the ONLY offer for the period they market. The sale took place at a time of transition when property market was about to take off. 

  4. Flipping a property for a fast gain is common practice, but hiding information/providing misleading information/not giving a seller a "best" deal is sinful of a property agent.  

  5. in all industries, there will be black sheeps. there should be some systems of control to weed them out. the housing agents industry is one desperately in need now.  

  6. Willing buyers vs willing sellers. Do ur homework. DON'T BLAME ANYONE. BE SMART!  

 7. Middle men are dangerous.

  8. All property agents should be regulated. There are simply too many fly-by-night agents in Singapore. 

  9. Better engage an agent (pay him a fee and transfer the accountability risk to him) to do it.  

  10. Invite prospective buyers (not agents) to send in their quotations with a description of the properties listed in the newspaper. 

Survey: Selling or renting a property

The newspaper carried the story about a property agent being sued by the seller for giving bad advice to sell a property at below the market value. The property was sold to the buyer (who was a friend of the agent) who then re-sold the property at a big profit.

The court decided in favour of the plaintiff and required the property agent to compensate the original owner for the loss.

What is your view on this matter? Survey.

Here are the survey results.

Before you buy, sell or rent a property, invest $25 in a property report. Here is a sample report. 

If you are interested in this introductory offer, complete this form.

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