Monetary authority and security officials of Hong Kong Special Administrative Region (HKSAR) on Monday tried to ease public fears triggered by a wave of quality forged banknotes par valued 1,000 HK dollars.

Monetary Authority Chief Executive Joseph Yam told reporters Monday that top priority has been given to the replacement of 1, 000-HK dollar notes issued by Hongkong and Shanghai Banking Corp ( HSBC) in 2000 and 2002, adding the number of such notes still in circulation is rather small.

Yam pointed out the 2003 issue carries more security features which people can identify easily, such as the use of variable optical ink in the denomination numeral.

Secretary for Security Ambrose Lee has also expressed concern over the recent surge of forged 1,000-HK dollar notes, adding enforcement will be bolstered.

Lee told lawmakers Monday law-enforcement departments have stepped up investigations following the discovery of fake 1,000-HK dollar notes.

To date, 12 suspects have been arrested and 710 forgeries of 1, 000-HK dollar notes issued by HSBC in 2000 and 2002 have been seized by Hong Kong police, accounting for less than 0.0008 percent of the more than 87 million genuine 1,000-HK dollar banknotes in circulation, as of February 2007.

Commissioner of Police Tang King-shing said investigations unveiled the forged notes came from places outside Hong Kong. The Commercial Crime Bureau will liaise with the Chinese mainland and Macao authorities on the issue, and a hotline (00852) 2860 5012 - has been set up for inquiries, he added.

The counterfeit banknotes found last week has the look and feel of genuine notes, with only minute differences in three areas, making it difficult to uncover them through the usual methods of feeling them, checking the watermarks or putting them under ultraviolet.

In addition, the imitation window threads in the fake notes are more advanced than those in previous counterfeit cases, according to the police.

The fake 1,000-HK dollars notes, which will not be accepted by deposit machines, were uncovered in banks around Hong Kong last week.

Other organizations such as the Hong Kong Monetary Authority, which has alerted the banking industry, are also being kept fully informed.

All 1,000-HK dollar banknotes issued by HSBC in its 2000 and 2002 series are being withdrawn from circulation in a low-profile exercise following last week's discovery of their counterfeit cousins.

The sharp rise in high-quality counterfeit banknotes has aroused serious concern within government circles as well as in the banking sector.

HSBC said earlier that all 1,000-HK dollar banknotes issued by the bank in 2000 and 2002 will not be released for circulation again once they are returned to the banking system.

The bank, after contacting the Hong Kong Monetary Authority, also requested the Hong Kong Association of Banks to urge members to do the same. All the banknotes in question will be channeled back to HSBC for disposal.

HSBC emphasized the withdrawal is not a formal recall that would require the public to hand the banknotes back.

Source: Xinhua