Celebrity investors of Lehman Brothers minibonds yesterday voiced their outrage that they may not see a cent in compensation as they are being classified as "professional investors."
Actress Meg Lam Kin-ming is likely to be one of the unlucky ones.
She bought about HK$10 million worth of Lehman-related products, including minibonds. "You are a professional investor once you've invested HK$8 million? How to assess?" she asked. "They [the bank] asked me to buy this and that back then. Yes, I bought a lot. But am I a professional investor?"
A professional investor is assessed on whether or not an individual's portfolio is more or less than HK$8 million, including securities holdings, according to the Securities and Futures Ordinance.
Some 29,000 Hong Kong minibond investors will be refunded about 70 percent of their original investments by banks, financial regulators announced on Wednesday.
About 2,000 investors are not qualified under the repurchase scheme as they are either "professional" or "experienced," Secretary for Financial Services and the Treasury Ceajer Chan Ka-keung said yesterday.
Other big-name entertainers caught up in the investment nightmare include superstar Jacky Cheung Hok-yau, funny man Eric Tsang Chi- wai and former actress Maria Chung Wai-bing. The media speculated that Cheung invested as much as HK$40 million in the high-risk product, while Tsang and Chung were estimated to have invested more than HK$10 million each.
Tsang said he invested in minibonds, but he could accept it even if he is not able to get his money back. He believes the most important thing is that the elderly can get their money refunded.
Banks will not compensate customers who have, in the three years preceding their first purchase of minibonds, executed five or more transactions in leveraged products, structured products, or a combination of these products, according to the Securities and Futures Commission.
Lawmaker Kam Nai-wai also said the arrangement was unfair as some purchases made by professional investors could involve misselling by banks.
Ceajer Chan said the arrangement was reached by banks and regulators, and investors should make inquiries to banks for details. "If investors who have not benefited from the program complain, the regulators will handle it," he said.
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