<TABLE cellSpacing=0 cellPadding=0 width=452 border=0><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published March 14, 2009
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>HK investors sue Lehman, HSBC over minibonds
They are fighting to recoup as much as US$1.6b in losses via US lawsuit
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</TD></TR><TR class=caption><TD></TD></TR></TBODY></TABLE>A GROUP of Hong Kong investors sued Lehman Brothers and HSBC in the United States in their fight to recoup as much as US$1.6 billion in losses after the collapse of the Wall Street firm left their bond holdings possibly worthless.
Lawyers in the US said the plaintiffs are mostly retired people and retail investors who bought US$2 billion worth of structured products that originated with Lehman and which HSBC marketed as low-risk 'minibonds'.
They say Chinese investors, who have a high savings rate, are drawn to conservative investments. Calling the investments minibonds drew more interest but investors have since complained that was misleading.
A unit of HSBC Holdings plc sold the minibonds to the plaintiffs, many of whom did not realise they were exposed to risk of Lehman's failure.
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</TD></TR><TR><TD bgColor=#fffff1><TABLE cellSpacing=0 cellPadding=0 width=124 align=center border=0><TBODY><TR><TD vAlign=top>'The Hong Kong legal system cannot help us get back our money, so we have to bring our case to the US.'
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</TD></TR></TBODY></TABLE></TD></TR></TBODY></TABLE>Hong Kong investors said the lawsuit, which was filed on Thursday, represented an important milestone in their fight to recoup losses which they have been doing in the past six months.
'The Hong Kong legal system cannot help us get back our money, so we have to bring our case to the US,' said Peter Chan, convener of an investor group involved in the case.
Mr Chan said the case filed by seven plaintiffs seeks class-action status for some 33,000 mini-bond investors in Hong Kong. Lawyers contend that the US$1.6 billion, which they say is collateral for the investments, should be returned. They argue the collateral is not the property of the Lehman estate. Since filing for bankruptcy protection on Sept 15, Lehman has sold off its most valuable units. The remaining Lehman assets are tied up as lawyers and advisers wind down derivative contracts to pay off creditors.
Structured products were sold to investors around the world. Lehman's failure rendered many of them worthless, and sparked protests by investors in Asia and Europe. -- AP
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</TD></TR><TR><TD vAlign=top width=452 colSpan=2>HK investors sue Lehman, HSBC over minibonds
They are fighting to recoup as much as US$1.6b in losses via US lawsuit
<TABLE class=storyLinks cellSpacing=4 cellPadding=1 width=136 align=right border=0><TBODY><TR class=font10><TD align=right width=20>
</TD><TD>Email this article</TD></TR><TR class=font10><TD align=right width=20>
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</TD><TD>Feedback</TD></TR></TBODY></TABLE>(Hong Kong)<TABLE class=picBoxL cellSpacing=2 width=100 align=left><TBODY><TR><TD>
</TD></TR><TR class=caption><TD></TD></TR></TBODY></TABLE>A GROUP of Hong Kong investors sued Lehman Brothers and HSBC in the United States in their fight to recoup as much as US$1.6 billion in losses after the collapse of the Wall Street firm left their bond holdings possibly worthless.Lawyers in the US said the plaintiffs are mostly retired people and retail investors who bought US$2 billion worth of structured products that originated with Lehman and which HSBC marketed as low-risk 'minibonds'.
They say Chinese investors, who have a high savings rate, are drawn to conservative investments. Calling the investments minibonds drew more interest but investors have since complained that was misleading.
A unit of HSBC Holdings plc sold the minibonds to the plaintiffs, many of whom did not realise they were exposed to risk of Lehman's failure.
<TABLE cellSpacing=0 cellPadding=5 align=left border=0><TBODY><TR><TD bgColor=#ffffff>[FONT=Geneva, Helvetica, Verdana, Arial, sans-serif]<!-- REPLACE EVERYTHING IN CAPITALS WITH YOUR OWN VALUES --><TABLE class=quoteBox cellSpacing=0 cellPadding=0 width=144 align=left border=0><TBODY><TR><TD vAlign=bottom>
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Peter Chan,
</TD></TR><TR><TD vAlign=top>convener of an investor group involved in the case
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'The Hong Kong legal system cannot help us get back our money, so we have to bring our case to the US,' said Peter Chan, convener of an investor group involved in the case.
Mr Chan said the case filed by seven plaintiffs seeks class-action status for some 33,000 mini-bond investors in Hong Kong. Lawyers contend that the US$1.6 billion, which they say is collateral for the investments, should be returned. They argue the collateral is not the property of the Lehman estate. Since filing for bankruptcy protection on Sept 15, Lehman has sold off its most valuable units. The remaining Lehman assets are tied up as lawyers and advisers wind down derivative contracts to pay off creditors.
Structured products were sold to investors around the world. Lehman's failure rendered many of them worthless, and sparked protests by investors in Asia and Europe. -- AP
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