The Secretary for economy and finance of Macao Special Administration Region (SAR) Tam Pak Yuen said over the weekend that local distributors of the minibonds tied to the collapsed investment bank Lehman Brothers should "follow the buyback measures taken by their Hong Kong parent companies. "
The Hong Kong Association of Banks have agreed to buy back the so-called minibonds, the brand name of a series of products guaranteed by Lehman, from holders at market value, as proposed by the Hong Kong SAR government.
As most of the parent companies of Macao distributors were in Hong Kong, the sale of minibonds in Macao could be seen as part of the sale in Hong Kong, and, in this case, the parent companies should also deal with the complaints of Macao investors and offer them the same solution given to the Hong Kong investors, Tam told the press at the local airport when departing for Chengdu, capitalof China's Sichuan province, to attend an international fair there.
By far, the Macao SAR government has received a total of 1,200 complaints concerning the minibonds, involving 700 million patacas(87.5 million U.S. dollars), according to Tam. Some of the holders of the structured product claimed that the minibonds were sold as low-risk products by the banks when they were actually complex derivatives.
Over 100 local minibond holders convened on Sunday discussing the compensation issues. A representative of these holders, Tong Sik Ming, said that although the government and some of the banks have claimed to follow Hong Kong's solution to the minibond issues, the Monetary Authority of the Macao SAR still needs to take legal actions against those banks that are accused of violating Macao's relevant laws in misleading the investors when selling the bonds.
He also said that some individual investors lost over four million patacas (50,000 dollars) in the soured investment product, adding they will meet the SAR officials and bank representatives this week, but if no agreement concerning the above issues were reached between the two sides, the holders will report the case to the police and take legal actions on their own.
For his part, Tam promised that the government would carry out a full-scale review on the sale of the structured products in question and would strengthen its supervision on similar products.
Source: Xinhua
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