Published August 10, 2009

Burned HK investors in protest to recoup losses

They want govt to strike a deal with DBS, similar to one with local banks

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(HONG KONG) About 100 Hong Kong investors burned by complex financial products linked to failed US investment bank Lehman Brothers protested yesterday, demanding that securities regulators help them negotiate a settlement.

Stress lines: Some 6,900 Hongkongers had bought HK$2.3 billion worth of Constellation notes

Tens of thousands of retail investors in this Chinese-ruled financial hub were hit by Lehman's collapse in September. Hong Kong securities regulators announced a settlement deal last month for one group of investors who had purchased certain Lehman-linked products through local banks, but the agreement did not cover products sold by Singapore bank DBS Group Holdings.

Yesterday's protesters were demanding that securities regulators step in to strike a deal for DBS clients.

The demonstrators bought so-called 'Constellation' notes from DBS - financial products that are linked to the credit ratings of a group of financial institutions, including Lehman. About 6,900 Hongkongers bought HK$2.3 billion (S$427.6 million) worth of the failed investments, according to KC Lok, an organiser of the disgruntled investors.

'DBS lacks a conscience', 'DBS is a swindler', the protesters chanted at a park in downtown Central financial district.

Mr Lok, who bought just over HK$100,000 of the Constellation notes, accused DBS of misleading its customers into believing the financial products were conservative investments.

'Many of the investors shifted their money from time deposits,' Mr Lok said.

DBS Hong Kong spokeswoman Glendy Chu said yesterday that the bank had explained the risks of the products and offered compensation to investors in cases where there was evidence of questionable sales practices.

Calls to the media office at the Securities and Futures Commission went unanswered yesterday.

The deal announced last month would see 16 local banks returning 60 or 70 per cent of the principal to thousands of investors in a payout that amounts to HK$6.3 billion. -- AP