CHIM PUI-CHUNG

http://www.legco.gov.hk/yr08-09/%20...%20016-translate-e.pdf

MR CHIM PUI-CHUNG (in Cantonese): Chief Executive, globally the financial tsunami has happened, and in Hong Kong, just as you said earlier, we have the minibonds issue. In the policy address, you mentioned that a task force chaired by you would be established, and yesterday in front of the media, you even urged the banks to expeditiously make a decision. Chief Executive, you should know that the problem cannot be immediately resolved even if those two things were accomplished. Meanwhile, I strongly support your administrative initiative of establishing the Accountability System for Principal Officials. My question therefore contains three sub-questions. Firstly, what action will you take if it is proved in the future that one of the Principal Officials has to be held responsible for the minibonds issue? I have actually put this question to a secretary of Department before, but I would like you to give a fairer response to all Hong Kong people and the victims.If it is proved that the case involves criminality, will you instruct other departments to employ tougher means so that the perpetrators would no longer take Hong Kong a teller machine?

(HKMA chief Yam is the Principal Official that knowingly allows banks to pretend Minibonds, a high risk derivative products as a low risk bonds to sell to their customers for profits and to help Lehman, Morgan Stanley and DBS to steal money from HK people and Yam has to be held responsible.)

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Thirdly, which is the most important point, will you consider setting up a special court? We all know that legal poceedings may take as long as three to five years, after which the problem may remain unresolved. This will deal a serious blow to Hong Kong as a financial centre. Three questions have been raised, but they can actually be summarized into one. Now, the floor is yours.

(Observers on the public gallery applauded after Mr CHIM Pui-chung had finished with his question)

PRESIDENT (in Cantonese): Will people on the public gallery remain silent please.

CHIEF EXECUTIVE (in Cantonese): We are now busy combating the financial tsunami, Mr CHIM, and I am confident that our Government is a responsible one. And yet, this is not the right moment to punish any official. Nor is this the appropriate time to hold anyone responsible. For the time being, we should all stick to our positions and overcome the difficulties. I think that justice is in the hearts of the people. When the issue dies down, Members will naturally see who has done wrong or what mistakes we have made in this financial quagmire in comparison with other regions. In the face of the crisis, I believe it is more important to pool all our manpower and resources and this is what is expected of us by Hong Kong people.If criminal acts are disclosed after the investigation, Mr CHIM, I can assure you that I will follow it up seriously. I will definitely do so.

(Varies banks such as Shanghai Commercial Banks, DBS etc. that act criminally in Minibonds selling should be charged)

Yesterday, I also mentioned that should a victim found that the case involved civil rather than criminal acts and considered it unfair, whereas the Hong Kong Monetary Authority (HKMA) also noticed some unfair acts of the institutions concerned, he might turn to the Consumer Council for assistance under a special litigation mechanism. Money will be injected by the SAR Government when this litigation mechanism lacks funds, hence enabling the victims to initiate proceedings. This is the way to tackle it through the civil avenue. As for criminality, follow-up actions would surely be taken.Regarding the special court proposed by you, the Courts are always full and many Judges are occupied with cases. If the Judges are made to take up this case, how long will the hearing last? I believe the hearing will be excessively long and may even affect other cases. I hope that the case will not

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be brought before the Court as reputation and goodwill is very important to the intermediaries concerned (including the banks). Should we find anything wrong or flaws are discovered after the HKMA investigation, I am confident that those responsible banking institutions would immediately resort to reconciliation and consider making compensation without bringing the case before the Court, which is considered to be too humiliating and troublesome.

(Shanghai Commercial Bank, Bank of China, DBS and others have already court cases involved, and these banks are already with bad reputations)

MR CHIM PUI-CHUNG (in Cantonese): President, members of the public should have heard the three answers given by the Chief Executive. The point is we all know that legal proceedings in Hong Kong may probably take as long as three to five years. It is therefore my opinion and wish that the Government could set up a special court to make an ultimate arbitration where no appeal is allowed and is final. The decision certainly rests with the Secretary for Justice.With the availability of arbitration in Hong Kong, a lot of time can be saved.We are allowed to resort to this course in case of emergency. It is all up to you.

CHIEF EXECUTIVE (in Cantonese): I dare not say if it works in the absence of an appeal channel. What is more, "Uncle CHIM" ― I used to call him in this way ― according to legal advice, arbitration requires the consent of the two parties concerned. In case either party does not agree, the case will be brought before the Court and no one can be forced into arbitration. Should either party refuse to give consent, nothing can be done. Legal proceedings are therefore necessary for some cases. But I do agree with you that if a large number of cases (civil cases in particular) are involved, hence the Court may probably take a very long time to handle them, but if the bank concerned still refuses to reconcile or do something about it when the elderly victims seek help, we will then resort to other courses of action. I will consider all your proposals and discuss with the Chief Justice how these special cases could be dealt with.