From Associated Press:
HONG KONG (AP) — An investigation will be launched in Hong Kong into the sale of financial products linked to collapsed U.S. investment bank Lehman Brothers after lawmakers voted overwhelmingly for a probe.
The legislature passed a motion 47-4 empowering a subcommittee to summon top financial officials and bankers and have them turn over internal documents during the investigation. Four other lawmakers abstained from Wednesday’s vote.
“The Legislative Council has the responsibility to investigate the cause of the saga, whether there’s any dereliction of duty and whether there should be any punishment,” said Kam Nai-wai, a Democratic Party legislator who helped investors with Lehman-linked products over the past two months.
Hundreds of investors who lost money protested outside the legislative building Wednesday while lawmakers debated inside for more than seven hours. They have complained bank sales staff did not fully explain that the financial products they purchased were linked to the bankrupt U.S. company, leading them to believe they were a low-risk investment.
Banker David Li said any investigation would slow the efforts of banks in reaching settlements with their clients and damage Hong Kong‘s reputation as an international financial center.
“Subjecting banks to what amounts to an unlimited power to demand documents and the appearance of bank managers before the subcommittee will only draw resources away from the great efforts banks are making,” said Li, who represents the banking sector in the legislature.
The Hong Kong Association of Banks said in a statement issued late Wednesday that it hoped lawmakers would be “discreet” in handling the confidential business information of banks and the personal data of customers while conducting the inquiry.
Billions of dollars in bad debt forced Lehman Brothers Holdings Inc., once the fourth-largest investment bank in the U.S., to file for bankruptcy in September, a victim of the world’s worst financial crisis in decades.
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I hope this may pressure the Sg government to do something similar, though i doubt it. They are too busy covering each other’s backside.
The HK legislators are making our elites look like sloths.
If the HK legislators eventually find the banks guilty of mis-selling, MM Lee will have to EAT HIS WORDS with his EYES OPEN !! Let’s all wait for this day !!
There are 7 PAP MPs in Parliament who work or used to work in the financial services sector. One of them is MP Liang Eng Hwa, who so happens to be managing director at DBS.
The Eastern newspaper editorial:- “The Legislative Council has passed the resolution to activate the special power regulation to investigate Lehman Brothers Minibonds. What make people most puzzled is that the HK Government is not standing by the side of the victims to pursue their interest, but instead siding with the bankers. This can lead to rumours that the Government is protecting the bankers and businessmen. Frankly, if this affair is not investigated and allowed to drag on, it will only make people harbouring doubtful impression that the HK financial market is lacking transparency. Such an impression will do the utmost harm to the international reputation of HK.”
What an editorial pertinent to SG too!
The Eastern newspaper editorial appeared in the last few moments of the above video. I have taken the liberty to translate it to English in post #5 for others to comprehend what it says.
There are lack of transparency in the progress of investigation. Invdividual bank starts to issue letter to victims to deny their wrong doing and liability in those trading. Just give information to victims to check related website of Lehman by themselve. I am one of those victim. Originally, I was confident to government to really look at this issue seriously. Now, I found that it is just a drama to buy time. HKMA replied me that they have no authority to have bank to settle the claim but they even don’t bring several case in court for those bank staffs who used improper method to sell. If those SFC registered front line staff sold those prouct not in line with the code of conduct, those contracts should be immediately revoked. This is the simple logic. Then, those banks have to be responsible for the loss.
However, there are even no single court case until now. I am willing to fight for my own right in the court but don’t find any indepedent commission to help out.