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Hong Kong marchers protest Lehman payout

Hundreds of Hong Kong investors burned by Lehman Brothers-linked financial products marched Sunday.
/ Source: The Associated Press

Hundreds of Hong Kong investors burned by Lehman Brothers-linked financial products marched Sunday to demand the resignation of the territory’s leader, angry over the government’s handling of allegations that local banks misled clients about the complex investments.

Banging drums, the 400 protesters chanted, “The Lehman issue hasn’t been resolved” and “Donald Tsang step down,” referring to Hong Kong’s chief executive, as they marched through the crowded Causeway Bay shopping district.

About 37,000 investors who bought more than 15.5 billion Hong Kong dollars ($2 billion) of Lehman-related financial products saw their investments cast into doubt after the U.S. investment bank collapsed last September.

Under a settlement negotiated by Hong Kong’s Securities and Futures Commission announced July 23, 16 local banks agreed to return 60 percent or 70 percent of the principal to thousands of investors, with those over age 65 getting the highest amount. The payout would total 6.3 billion Hong Kong dollars ($813 million).

The Hong Kong Monetary Authority said in a statement Friday that more than 9,200 people have accepted the deal, but critics have complained it doesn’t return enough money to investors and doesn’t punish the banks.

Some investors have accused bank staff of peddling complicated financial products without properly explaining the risks.

One of the protesters Sunday, 67-year-old retiree Kong Chin-pang, said he bought about 775,040 Hong Kong dollars ($100,000) of Lehman-linked investments.

“How can we be satisfied with the settlement deal? We invested our cash, our blood, sweat and tears into these products and we were cheated. The proper way of handling this matter is giving a 100 percent refund,” Kong said.

Many demonstrators bought a particular type of Lehman-linked financial product that isn’t covered by the deal.

The Hong Kong government said in a statement Sunday that securities regulators are still investigating allegations that local banks misled investors and urged investors to accept the settlement because it avoids “unnecessary litigation.”

“The deal reached by the regulatory authorities and the banks considered the situations of all parties involved. It meets the public interest,” it said.