The Hong Kong Association of Banks said yesterday that most of the city's lenders had responded positively to a government proposal that they buy back minibonds linked to bankrupt US investment bank Lehman Brothers, on which investors face heavy - and in some cases total - losses. 'Banks are willing to work along the lines proposed by the government,' association chairman He Guangbei said. He said local banks would come up with a fair package for those who had lost money. Mr He was speaking at a media session that marked the association's first public statement about the controversy. Investors say banks mis-sold the minibonds and similar complex derivatives as low-risk. The association had appointed legal advisers, Mr He said. He hoped it could appoint an independent financial adviser in the next few days to standardise compensation details and set a timetable for valuing the underlying assets of the minibonds. He said banks would treat any cases of misleading sales practices very seriously. Banking and stock market regulators are investigating the sales tactics of 21 banks and three brokers. Financial Secretary John Tsang Chun-wah said the government would appoint independent auditors to avoid a conflict of interest. He said the government would crack down on improper selling of financial products. 'The Monetary Authority has begun an investigation. It is our responsibility to protect small investors.' Secretary for Financial Services and the Treasury Chan Ka-keung reiterated that any gains banks made buying back the financial instruments would have to be returned to investors. Meanwhile, the Civic Party said investors who accepted buy-back offers should not have to forfeit the right to make further claims against banks. Representatives of Citic Ka Wah Bank yesterday met 30 people who claimed to have made a loss on Lehman Brothers minibonds or related products it sold them. Led by Civic Party leader Audrey Eu Yuet-mee and the Democratic Party's Kam Nai-wai, they sought compensation. The bank did not make any promises, some said. But Ms Eu said it had agreed to pay compensation if its staff were found to have misrepresented the products. One woman accused the bank of negligence. She said staff had been unsure of their facts when they sought to explain to her exactly what she had bought. 'They didn't even understand what they had sold me. They could not explain it to me,' she said.