Exchange chairman says minibond inquiry by Legco will not be witch-hunt
The Legislative Council inquiry into the Lehman Brothers minibond debacle will not tarnish the city's image, the head of the stock exchange has said, despite bankers' worries.
Ronald Arculli told an RTHK programme yesterday that he believed lawmakers understood how to handle sensitive trade information and that testimony given at closed-door sessions would not leak into the public domain.
Some bankers have expressed concern that the probe could become a witch-hunt.
But Mr Arculli said: 'I don't think there is a witch-hunt. I think that the Legco members are genuinely concerned as to whether the process, as to whether the infrastructure needs any change, needs any improvement.'
Lawmakers on Wednesday voted to invoke the Legislative Council (Powers and Privileges) Ordinance to investigate how banks sold Lehman minibonds. About 43,700 Hongkongers invested HK$15.7 billion in Lehman-linked derivatives. Most bought minibonds - which are not corporate bonds but high-risk credit-linked derivatives. They are sold as a proxy investments in well-known firms.
The Legco subcommittee handling the inquiry will meet formally on November 25, when it will decide on its operating procedure.
Subcommittee chairman Raymond Ho Chung-tai said he hoped less controversial elements of the inquiry could be agreed on November 24, but expected a three-hour discussion the next day on issues such as whether special powers needed to be invoked to summon even witnesses who were willing to attend.
He noted that some lawmakers believed all witnesses should be formally summoned, since only then would they be able to speak freely without fear of recrimination.
The subcommittee was expected to meet twice before Christmas to discuss the summoning of data and start its inquiry after Lunar New Year at the earliest, Mr Ho said.
Contrary to banks' warnings that the inquiry could slow down its buy-back of minibonds, Mr Ho said: 'This may cause banks to complete these procedures quicker.'
Ten more investors filed claims at the small claims tribunal to pressure banks that have not responded to their complaints for a settlement.
Five claimants who filed last week were very close to settlements with banks yesterday, Democratic Party legislator Kam Nai-wai said.
The Democratic Party is helping a further 20 investors prepare claims. to file writs against banks next week.
The Monetary Authority referred 17 complaints to the Securities and Futures Commission for further investigation, bringing the total to 113.
Meanwhile, Democrat legislator Albert Ho Chun-yan, who is representing a number of minibond investors in their battle for compensation, has resigned from investigating subcommittee. Mr Ho said he did so because he did not want to 'affect the credibility of the subcommittee'.