Iisterry 3rd Gear July 23, 2009 Share July 23, 2009 (edited) http://www.reuters.com/article/rbssFinanci...UST585520090722 HONG KONG, July 22 (Reuters) - Hong Kong's securities watchdog said on Wednesday that 16 banks had agreed to pay about HK$6.3 billion ($813 million) to compensate eligible investors who lost money on structured products or minibonds offered by collapsed U.S. bank Lehman Brothers. "The agreement that we have reached today will enable the vast majority of investors who hold minibonds to receive a substantial return of their capital," said Securities and Futures Commission Chairman Martin Wheatley. "The total amount that they'll receive will be equal to or greater than what they could otherwise recover at current market values," he told reporters following an SFC meeting with the banks. More than 30,000 Hong Kong residents ploughed nearly $2.5 billion into the derivative products which failed as Lehman Brothers collapsed last September. If the agreement is accepted by investors, "the vast majority of them will be able to get back 70 percent or more of their original investments," Financial Secretary John Tsang said in a statement following the SFC announcement. The agreement will put an end to more than 10 months of distress for investors, and will also enable the banks to resume their normal operation, Tsang added. Many of the investors blamed the Hong Kong Monetary Authority (HKMA) for allowing local banks to sell the products without making investors aware they were risky products. They took to the streets, staging a number of protests in the past year and prompting a government inquiry. The HKMA and the Securities and Futures Commission have since made separate recommendations on how to better protect investors. They include forcing banks to separate their deposit-taking and retail investment businesses. Minibond distributors Sun Hung Kai Financial (0086.HK) and KGI Asia earlier this year agreed to compensate investors in full. Investors in Singapore and Indonesia also lost money on the products. Singapore investors have only been compensated for about a third of their investments. (US$1 = HK$7.75) (Reporting by Nerilyn Tenorio, Donny Kwok and Susan Fenton , Editing by Tomasz Janowski) Edited July 23, 2009 by Iisterry ↡ Advertisement Link to post Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In NowRelated Discussions
Related Discussions
Mother of all scams thread
Mother of all scams thread
'Town council rejected compensating me': Driver at loss after Volkswagen damaged by spalling concrete at Tekka Centre carpark
'Town council rejected compensating me': Driver at loss after Volkswagen damaged by spalling concrete at Tekka Centre carpark
Do you agree? Singapore is happiest nation in Southeast Asia
Do you agree? Singapore is happiest nation in Southeast Asia
Singapore Regulator, Banks in Talks to Extend Debt Relief
Singapore Regulator, Banks in Talks to Extend Debt Relief
Agree price, then get valuation
Agree price, then get valuation
Prudential customers affected by erroneous deductions
Prudential customers affected by erroneous deductions
Many CPF investors get their fingers burnt
Many CPF investors get their fingers burnt
True cost of owning car. Do you agree?
True cost of owning car. Do you agree?