Wednesday, October 08, 2008

Hong Kong Riots?

News on the financial crisis coming out of China is heavily controlled by the government, but news is beginning to leak out about riots in Hong Kong. Take these stories with a grain of salt, but they're probably a sign of what's to come as Chinese savers realize how much they're losing.

Riots in Hong Kong after heavy stock losses
Wednesday, 8 October 2008 13:34
There have been riots on the streets of Hong Kong following heavy losses at the city's Hang Seng index.

The Hang Seng closed over 8% lower with losses in banks, communications companies and exploration companies.

Customers are trying to get their money out of bank branches and many are protesting about losses related to the collapse of Lehman Brothers.

'Give me back the money I made'
Furious investors take their case for a full refund to Legco and the Bank of China

Close to 1,000 investors in minibonds and other Lehman Brothers products clamoured for a full refund at the Legislative Council and the Bank of China yesterday.

"Give me back the money I made with my blood and sweat," they shouted.

The crowd spilled from Chater Garden into the Legco car park. Most were retirees. Some cried, others shook their fists in anger. One woman arrived in a wheelchair.

The investors arrived in the morning before the Legco meeting began to urge legislators to give their complaints top priority. They shouted their opposition to the government's proposal, on Monday, for banks to buy back the minibonds at market value.

Thousands of investors in minibonds - high-risk credit-linked derivatives - issued by or referenced to the now-bankrupt Lehman Brothers have complained and demanded a refund for weeks. They claim banks did not disclose the risks involved or explain that the minibonds - which have since plunged in value - were linked to Lehman.

Legislators from the Democratic Alliance for the Betterment and Progress of Hong Kong, the Civic Party and Democratic Party promised investors they would discuss their complaints during the Legco meeting and urged the crowd to remain calm. "We assure you that the first thing we'll do is help all of you," the DAB's Chan Kam-lam said.

At midday, about 100 investors moved to the adjacent Bank of China building and clashed with police as they attempted to enter. Many investors had bought minibonds from the bank. One woman fainted.

The three parties met separately with representatives from the Bank of China (Hong Kong) yesterday. Mr Chan and other DAB legislators met them in the morning. In the afternoon, Civic Party legislator Alan Leong Kah-kit met BOCHK's head of personal banking, Lawrence Law Hong-ping, with 10 investors.

Democratic Party legislator Kam Nai-wai took 10 investors to his meeting in the evening.

Mr Chan demanded the banks pay a full refund and complete their appraisal of the minibonds' value. The banks were responsive, he said.

However, by afternoon, the investors said hope was fading as the meetings produced no new answers. "I am quite disappointed," said Peter Chan Kwong-yue, an investor and group leader for BOCHK complainants who attended the meeting with Mr Leong. "To this day, it seems as if Bank of China has no knowledge of mis-selling by its frontline agents."

BOCHK deputy chief executive David Lam Yim-nam said the bank must consider information from HSBC before making a decision. HSBC was the minibonds' trustee - middleman between the US bank and local distributor banks. He did not indicate whether BOCHK would accept the proposal of a full refund.


smf said...

Why would the people of Asia not go for the promises of this bubble?

Remember the 1998 Asian crisis?

Anonymous said...

This story is pure fiction.
I live in Hong Kong.
I've lived here for 24 years.
There were no riots yesterday or today.

Pure fiction.

David O'Rear
Chief Economist,
Hong Kong General Chamber of Commerce

patient renter said...

Reminds me of the olympics protesters who were disappeared, but supposedly weren't, after applying for protest permits. Fiction?

CC said...

I am part of a group representing investors who purchased the failed High Notes 5 in Singapore and am interested in contacting Peter Chan Kwong-yue.

Please write to fairlington@yahoo,com if you know how I can get in touch with Mr. Chan.

Thank you very much.