FS welcomes Minibonds agreement

The Financial Secretary, Mr John C Tsang, today (July 22) made the following statement in response to the re-purchase agreement jointly announced by the Securities and Futures Commission (SFC), the Hong Kong Monetary Authority (HKMA) and 16 distributing banks regarding Lehman Brothers Minibonds:

(Media-Newswire.com) - The Financial Secretary, Mr John C Tsang, today ( July 22 ) made the following statement in response to the re-purchase agreement jointly announced by the Securities and Futures Commission ( SFC ), the Hong Kong Monetary Authority ( HKMA ) and 16 distributing banks regarding Lehman Brothers Minibonds: "We welcome the agreement reached among the SFC, HKMA and the distributing banks for the re-purchase of Lehman Brothers Minibonds. It represents a reasonable settlement that has taken account of the interests and rights of the investors concerned. If the agreement is accepted, the vast majority of investors will be able to get back 70 per cent or more of their original investments. The agreement will put an end to more than 10 months of distress for investors. It will also enable the banks to resume their normal operation. The decision of the SFC is taken after a thorough and fair investigatory process, reflecting that an effective channel exists in our regulatory structure to ensure that investors' interests are protected. Nevertheless, we will learn from experiences gained in the Lehman Minibonds issue and improve our regulatory system so that investor protection can be further strengthened." Lehman inquiry to call SFC chief again The Legislative Council subcommittee investigating the Lehman Brothers minibond debacle will again summon the head of the Securities and Futures Commission to explain the HK$6.3 billion deal to repay thousands of investors. Speaking after a closed-door meeting yesterday, the subcommittee's chairman, Raymond Ho Chung-tai, said it decided to summon the regulator's chief executive, Martin Wheatley, for an open hearing as early as Friday or early next month. It's because after announcing the repurchase proposal, we need to understand the deal thoroughly ... and ask about the terms, which are unclear, Mr Ho said. The 16 banks that sold Lehman Brothers minibonds will send letters to investors early next month, and investors will have 60 days to decide whether to accept the deal. Mr Ho said the legislators therefore hoped to hold the hearing as soon as possible to obtain more information about the repurchase arrangement. The subcommittee also decided that Financial Secretary John Tsang Chun-wah would be the next to be summoned, Mr Ho said. The SFC announced on Wednesday the HK$6.3 billion buyout deal, which covers 29,000 investors of Lehman Brothers minibonds. Under the agreement, those who are over 65 years old will get 70 per cent of the value of their initial investment back, while those below 65 will get 60 per cent back. They will receive at least a further 10 per cent of their initial investment from the residual value of the collateral. Despite their name, minibonds are not corporate bonds but credit-linked derivatives whose worth depends on the health of the underlying assets. Mr Ho said the subcommittee members had also agreed to extend the area of investigation to include investors' protection, the complaint mechanism and the penalty system for any violation of the law during the selling of financial products. The subcommittee chairman reiterated that the agreement would not interrupt the subcommittee investigating the matter. Unlike previous Legco inquiries, this time the incident is developing and we need to make plans accordingly. But it will not halt our investigation, he said. Although the subcommittee decided earlier to take a break next month, Mr Ho said that as a result of the latest development, meetings would continue during the summer as long as there were enough lawmakers on hand. A lot of members have told me they won't be in Hong Kong in August. But because this is something which has got very wide public attention and interest, we will try our best to find enough members, he said 立會研討迷債協議 傳召曾俊華韋奕禮 (明報)2009年7月25日 星期六 05:10 【明報專訊】證監會 已跟銀行就雷曼迷債達成和解協議，立法會 雷曼迷債事件小組委員會決定盡快傳召證監會行政總裁韋奕禮再出席公開研訊，以便深入了解和解協議，並研究投資者保障、投訴機制及制裁機制如何協助投資者。小組委員會亦會首次傳召財政司長曾俊華出席研訊作供。明報記者 有委員明言會追問證監會到底基於什麼數據，衡量出這是對事主最好的方案。委員之一的民主黨 甘乃威表示，雖然銀行拿出63億元作最少六成賠償，但他估計賣出抵押品後，銀行實際損失一定會低於28億元，懲罰性遠遠不夠，證監會要解釋為何接納這個懲罰性不足的和解方案。他又批評，該黨日前邀約財經事務及庫務局 長陳家強 討論和解方案，但陳家強拒絕會面。 最快下周五向韋奕禮取證 由於韋奕禮現不在港，小組暫定7月31日（下周五）或8月初向他取證。小組主席何鍾泰 相信，雖然不少小組委員都在8月休假及外遊，但由於事關重大，委員都會盡量參與會議，不擔心出現出席法定委員人數不足以致會議無法召開的情况。 事主不滿接受方案即終止調查 小組委員會除了會再傳召韋奕禮外，亦會傳召曾俊華出席公開研訊，並希望盡快安排。何鍾泰稱，小組已從財經事務及庫務局、證監會及金管局 取得不少資料，由於「很多金融監管機構議會的決定，都由他（曾俊華）作出」，而這一方面一直未有探討，故希望曾俊華補充資料。 何鍾泰指出，小組在向財金官員取證後，第二階段會向銀行、前線銷售人員或投資者取證，問及何時向銀行取證，他表示暫未有討論。 雷曼苦主大聯盟召集人陳光譽昨日在商台 節目訪問中表示，不能接受事主若接受賠償方案，證監會便會終止調查的條文；他又認為有關「經驗投資者」的定義欠清晰。