New Lehman deal gets thumbs-down on the cover-up of Minibonds by BOCHK, HSBC, HK gov. etc.

The bankruptcy proceedings of Lehman and the cover-up of Minibonds share certain similarity - the banks and government just make up rules as they go along and disregard those that they do not like. There is no normalcy - just look at all the secrecy imposed by the SFC and HKMA. What they say is half truth at best and what they hide renders the half-truth misleading as well. Truth comes from independent research and verification from comparing information from different sources. If I know slightly more, it does not go very far given the information blockade imposed by the bank-regulator alliance.


About 70 percent of the 400 buyers of Lehman Brothers securities are against the new compensation deal that will see them get back up to 96.5 percent of their investments.

They also include about 70 percent of the holders of minibonds.

The Hong Kong Association of Banks announced last Sunday that 31,000 buyers of Lehman Brothers-linked minibonds may be reimbursed from 85 to 96.5 percent of their original investment.

But Democratic Party legislator Kam Nai-wai, who has been helping the investors, admitted that a ballot yesterday will not affect the outcome of the voting to be held at a formal extraordinary general meeting next month.

Nearly 97 percent of the buyers of minibonds have already agreed to the 2009 deal and sold back their rights to distributing banks, making them ineligible to vote at the meeting.

``I believe the victims will have to accept reluctantly the latest compensation proposal,'' Kam said.

In July 2009, 16 banks offered to repay a total of HK$5.2 billion. This was accepted by nearly 96 percent of the holders of Lehman minibonds, according to the Hong Kong Monetary Authority.

But Kam pledged to keep up the pressure in the Legislative Council and demand the government appoint a third party to evaluate the collateral for minibonds.

``The third party should be responsible for assessing the value of the collateral and judge whether it meets the market value. They should assess whether the latest compensation is reasonable,'' he said.

The Alliance of Lehman Brothers Victims chairman Chan Ho-wai, which represents 7,000 of the 31,000 local holders of minibonds, said the vote shows victims are dissatisfied.

``We have to unwillingly accept not having voting rights since many of us agreed to the unfair deal in 2009,'' Chan said.

``But we are not giving up our demand for 100 percent compensation. Only a full compensation can adequately reflect the mistaken selling tactics of the banks.''