http://www.thestandard.com.hk/news_detail.asp?pp_cat=30&art_id=77483&sid=22371106&con_type=3
Sun Hung Kai Investment Services will refund as much as HK$85 million to investors who bought structured notes linked to collapsed US investment bank Lehman Brothers.
The firm becomes the first financial institution in Hong Kong to repurchase the minibonds at their original value, the Securities and Futures Commission said last night.
SHK Investment, which was also the first firm to be reprimanded by the SFC for lacking internal controls while selling the notes, has now agreed to repurchase all Lehman Brothers-linked minibonds sold directly to 310 clients.
Clients who agree to the payout will get their money back within 30 working days, the SFC said.
"We are very pleased with the outcome that has been achieved and we believe the approach adopted has produced a result that is in the best interests of the investors," SFC chief executive Martin Wheatley said.
Peter Chan Kwong-yue, the chairman of a group of disgruntled minibond investors, said the payback was a significant breakthrough.
He said about 1,500 minibond investors have so far received 30 to 50 percent of their money back from institutions besides SHK Investment.
Chan urged all institutions involved in what he alleged were "questionable selling practices" of minibonds to offer full refunds to clients.
Sun Hung Kai Financial, the parent of SHK Investment, refused to acknowledge any wrongdoing in selling the minibonds.
"While we acknowledge the SFC's concerns, SHKF stresses that some of the issues raised date from 2002 and have been rectified. Any outstanding concerns are currently being addressed," it said.
Democratic Party lawmaker Kam Nai-wai, who has been assisting several groups of disgruntled minibond holders, said SHK Investment has indirectly admitted responsibility with its decision to buy back the notes.
Kam also urged other institutions involved in the affair to offer compensation to clients so the public may rebuild its confidence in the financial sector.
As part of its reprimand, the SFC has ordered SHK Investment to engage an independent audit firm to conduct a review of the company's internal control and compliance systems within six months.
Failure to do so may result in the partial suspension of the company's license for three years.
The SFC said SHK Investment's due diligence on minibond products before distribution to clients and training of sales personnel was inadequate.
The SFC declined to comment on whether the SHK Investment case will be used in the possible investigation of other institutions that sold minibonds.
The Hong Kong Monetary Authority said it has received 19,984 complaints concerning the Lehman minibonds, as of January 15.
Sun Hung Kai Investment Services will refund as much as HK$85 million to investors who bought structured notes linked to collapsed US investment bank Lehman Brothers.
The firm becomes the first financial institution in Hong Kong to repurchase the minibonds at their original value, the Securities and Futures Commission said last night.
SHK Investment, which was also the first firm to be reprimanded by the SFC for lacking internal controls while selling the notes, has now agreed to repurchase all Lehman Brothers-linked minibonds sold directly to 310 clients.
Clients who agree to the payout will get their money back within 30 working days, the SFC said.
"We are very pleased with the outcome that has been achieved and we believe the approach adopted has produced a result that is in the best interests of the investors," SFC chief executive Martin Wheatley said.
Peter Chan Kwong-yue, the chairman of a group of disgruntled minibond investors, said the payback was a significant breakthrough.
He said about 1,500 minibond investors have so far received 30 to 50 percent of their money back from institutions besides SHK Investment.
Chan urged all institutions involved in what he alleged were "questionable selling practices" of minibonds to offer full refunds to clients.
Sun Hung Kai Financial, the parent of SHK Investment, refused to acknowledge any wrongdoing in selling the minibonds.
"While we acknowledge the SFC's concerns, SHKF stresses that some of the issues raised date from 2002 and have been rectified. Any outstanding concerns are currently being addressed," it said.
Democratic Party lawmaker Kam Nai-wai, who has been assisting several groups of disgruntled minibond holders, said SHK Investment has indirectly admitted responsibility with its decision to buy back the notes.
Kam also urged other institutions involved in the affair to offer compensation to clients so the public may rebuild its confidence in the financial sector.
As part of its reprimand, the SFC has ordered SHK Investment to engage an independent audit firm to conduct a review of the company's internal control and compliance systems within six months.
Failure to do so may result in the partial suspension of the company's license for three years.
The SFC said SHK Investment's due diligence on minibond products before distribution to clients and training of sales personnel was inadequate.
The SFC declined to comment on whether the SHK Investment case will be used in the possible investigation of other institutions that sold minibonds.
The Hong Kong Monetary Authority said it has received 19,984 complaints concerning the Lehman minibonds, as of January 15.
