HONG KONG, October 2 – Hong Kong\’s financial services chief on Thursday weighed in on the dispute over the possible mis-selling of investment products backed by failed US bank Lehman Brothers.
Chan Ka-cheung, secretary for financial services, met representatives of 21 banks, who are accused by disgruntled investors of mis-selling "mini-bonds" that could now be worthless.
"I hope the banks can be more pro-active in getting in touch with their clients so that they can provide them with relevant information," he told broadcaster Cable News after the meeting.
"The banks must ensure that their clients know the method they are using to deal with the mini-bonds."
Chan added that the Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission had also agreed to increase manpower to look into complaints filed by individual investors.
Until Thursday noon, the HKMA said they had received more than 3,500 complaints on Lehman bonds.
Some of the banks, including DBS and DahSing, had agreed to settle through mediation and have been negotiating with individual investors on compensation deals, according to a report in the Apple Daily.
The move has put pressure on other banks to find a solution, prompting Chan to hold the meeting, the report said.
The investors, who bought 12.7 billion Hong Kong dollars (1.63 billion US) of the complex financial products, had earlier threatened to sue the banks for not explaining the risks involved before selling them the bonds.
Many of the investors are retired and had put all their savings into the investment because they trusted their banks.
The Securities and Futures Commission said previously it has launched an investigation into some of the institutions on alleged mis-selling.
Lehman Brothers, one of Wall Street\’s most established banks, collapsed last month, sparking turmoil on financial markets across the world.