Lehman unit in S'pore has holdings of US$300m

[makapaaa]

<TABLE border=0 cellSpacing=0 cellPadding=0 width=452><TBODY><TR><TD vAlign=top width=452 colSpan=2>Expect a mad scramble, but Papaya-connected individuals to have 1st access to this kitty? Where the fcuk in MAAss?

Published May 6, 2009

</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Lehman unit in S'pore has holdings of US$300m
Interested minibond investors must lodge claim by June 1

By JAMIE LEE
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A SINGAPORE-BASED Lehman Brothers entity has holdings of nearly US$300 million as at March 31 that minibond investors could try claiming if they choose to pursue this action against the failed US investment bank.

However, investors must have a proof of claim against Lehman Brothers Inc (LBI) - the only Lehman entity that investors can deem as a debtor under the US's Securities Investor Protection Act (SIPA) liquidation proceeding - before they take up the case.
LBI is in liquidation in the United States.
As it is the arranger of the structured products - such as being in charge of drafting the prospectus - investors must prove that the information provided in such documents was misleading, lawyer Siraj Omar told an investors' forum organised by the Securities Investors Association of Singapore (SIAS) yesterday.
The amount of assets was revealed by the Monetary Authority of Singapore (MAS) yesterday.
MAS said that as at end-March, Lehman Brothers Pte Ltd - which holds funds on behalf of LBI - had about US$144.7 million in segregated house accounts and US$153.6 million in segregated client accounts.
Another Singapore-incorporated entity, Lehman Brothers Singapore Pte Ltd, had a net cash position of S$61.6 million as at end-March but it does not hold funds for LBI.
The central bank said it released the information after discussions with SIAS, but said it was not rooting for investors to take legal action against the arranger.
'MAS is not providing legal advice to investors, and in releasing this information in the public interest is not in any way suggesting that legal action is in their best interests,' it said in a press statement. 'That is a matter for investors to take independent advice on, having regard to their own particular circumstances.'
With the SIPA, creditors who believe they have a proof of claim against LBI must lodge it with the US trustee, James W Giddens, by June 1, 2009.
Mr Siraj stressed that investors must have a basis for entitlements to get their investments back. If so, investors can choose then to make a claim in the US and join the pool of creditors.
But Mr Omar noted that minibond investors would be the last on the list of creditors that can have a share of the assets because they are ranked behind secured and preferred creditors.
Investors can also file a lawsuit in Singapore as provisions under the Companies Act can, under certain circumstances, allow locally held assets of a foreign firm to be paid off to local creditors first, he added. This is done by ring-fencing the assets.
Referring to the information released about the Lehman assets held in Singapore, SIAS president David Gerald told the 100-odd forum participants: 'I don't want to raise your hopes, but you need to make an informed decision.'
K H Lau, whose wife was a minibond investor, wasn't optimistic. 'If experts say the prospectus is water-tight, what chance does retail investors have (against LBI)?' he told BT.

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[makapaaa]

Donch ask me! I donch know! *tata*​

 

[makapaaa]

Wednesday, April 15, 2009

China Daily:HKMA in defense over minibonds


HONG KONG: Chief Executive of the Hong Kong Monetary Authority (HKMA) Joseph Yam Chi-kwong admitted the government body is duty-bound in the Lehman Brothers' minibond saga, but it did enough in warning the market and monitoring banking businesses.

Yam was the second official, after Secretary for Financial Services and the Treasury Chan Ka-keung, testifying in the Legislative Council (LegCo) subcommittee's hearing which probed issues related to the investment products sold by the global financial services firm.

Lawmakers criticized the HKMA for its incapacity in monitoring the sales of structural products.

"I started to warn the market about the high risk brought by derivative instruments since mid-2006. Banks were given guidance on selling derivatives...I think the risk warning was quite enough," Yam said in his first testimony.

Lehman Brothers collapsed on September 14, 2008. Its minibonds cost nearly 50,000 Hong Kong investors billions of dollars.

He agreed that minibonds were complicated and the name misled people into thinking that the products were bond.

Yam said it was the responsibility of banks but not monitoring bodies to explain the nature and risk of products to investors, though he did frequently communicate with the financial secretary and financial services chief on market fluctuation.

The authority to examine and approve investment products lies in the Securities and Futures Commission (SFC), and the HKMA has no power to re-check its work, he added. The SFC is also responsible for determining if the disclosure of a product's information is enough.

Facing criticism from lawmakers, Yam emphasized he was not shirking the responsibility of the minibond incident.

"In monitoring banks' activities, including the sale of mortgage-linked products, I and my colleagues have done what we can within our authority," he responded.

Responding to charges that HKMA's benchmark was too lenient when eight-mortgage linked products could be rated low-risk and medium-risk, Yam shrugged off the allegation, noting that investment risks rose sharply with the onset of the global economic crisis.

Yam noted that the SFC (Securities and Futures Commission) failed to require lenders to re-evaluate risks entailed in their products once the market changed.

He added that in response to HKMA intervention some lenders did raise risk evaluations to high. Some lenders also stopped recommending high-risk products to investors. Yam told lawmakers HKMA referred 178 alleged illegal sales to the investigating committee between April 2003 and September 2008. Yam admitted the HKMA has limited power in investigation and punishment, otherwise the probe into the minibond debacle could be speeded up.

However, he rejected allegations that the investigation was too slow.

Around 6,000 of the 20,000 complaints have been handled since last year, while 6000 cases have reached settlement with banks. Yam expected to complete investigation of 70 percent of complaints by next March.

Over 200 people are deployed to deal with the complaints. Yam said it is not easy to hire new staff and training takes time.

"But I guarantee that our heart lies with the investors. We want to help them," he added the authority would not tolerate any illegal behaviors but will handle it in an impartial manner.

Yam will be summoned again to the fifth hearing next Tuesday. Yet subcommittee chairman Raymond Ho Chung-tai did not predict how many times Yam will testify.

Around 200 minibond investors protested outside the LegCo during Yam's stay yesterday morning. They accused the HKMA of not being able to keep an eye on the investment products.

Peter Chan, chairman of the Alliance of Lehman Brothers Victims, requested Yam to resign as he never apologized for the incident.

Posted by Tan Kin Lian at <A class=timestamp-link title="permanent link" href="http://tankinlian.blogspot.com/2009/04/china-dailyhkma-in-defense-over.html" rel=bookmark><ABBR class=published title=2009-04-15T16:49:00+08:00>4:49 PM</ABBR>