Retired security guard Tam Kai-biu does not like to take risks.
The 74-year-old never gambles on the horses or the lottery. When his banks tried to sell him an investment product, he would say: “Please, I don’t need any funds or stocks.”
Now he fears he may have lost the HK$2 million (US$260,000) in savings and pension money he and his wife had built up since he arrived penniless in Hong Kong from Guangzhou in 1955.
PHOTO: AFP
While the global financial crisis has triggered massive and unprecedented government intervention to try to shore up plummeting markets, his story is a potent indicator of how the squeeze affects ordinary people around the world far removed from once-mighty banking and investment titans.
Tam and his wife had saved the money over almost four decades from what was left after raising four sons. He worked as a wood craftsman during the day and a security guard at night, while his wife was a cleaner.
“We earned the money with our own hands and we would not do anything risky with it,” he said.
In mid-August, Tam received a phone call from his long-time financial adviser at Hong Kong’s Dah Sing Bank (大新銀行).
At the time, shares in US investment bank Lehman Brothers were collapsing on concerns that the 158-year-old company could not raise enough capital to cover mortgage losses.
None of this was mentioned. Instead, Tam’s adviser told him about an attractive “savings plan” offering interest of 3.8 percent, significantly higher than the 2 percent he was getting.
“He said the plan was great and that although Dah Sing was not the ‘boss’ behind it, there would be no risk at all. He advised me to transfer all my money into it,” Tam said.
Tam, who dropped out of school and is barely literate, said he had never heard of Lehman Brothers when he was sold the so-called minibonds, a complex financial instrument linked to both bonds and derivatives.
Even if he had, he would not have known that the US$600 billion Wall Street giant was behind what he had signed his life savings into.
His financial adviser gave him an English-only document spelling out the nature of the “savings plan” and made no attempt to translate it for him, he said.
The document contains a scribbled Chinese note on one page saying the products were “principal protected” — which Tam said was written by his financial adviser.
On another page in smaller English print, the document reads: “There is a risk that any investor may lose the value of their entire investment or part of it.”
On Sept. 15, the US bank filed for bankruptcy.
Tam said his financial adviser contacted him that day and said for the first time that his money had been used to buy Lehman Brothers financial products.
Tam tried but failed to locate the adviser at the bank, but said the manager showed him the document he had signed, drew brackets around the words “Lehman Brothers” and asked him: “Here, can’t you see the name of the issuer bank yourself?”
Tam said he is now having trouble sleeping and eating, and his wife is suicidal.
They are among the more than 8,000 angry Hong Kong investors who claim that various local banks mis-sold them the “mini-bonds” and other complex financial products backed by Lehmans, which are now potentially worthless.
Their combined loss could be around HK$12.7 billion.
It’s not just in Hong Kong. In Singapore, about 600 investors who have lost savings rallied on Saturday, urging the city-state’s central bank to help recover their money.
Like Tam, many of those who gathered were retirees who invested their life savings in financial products linked to Lehmans and other institutions.
They, too, said that they felt “cheated” and “betrayed” that the banks did not fully inform them of the risks when they were offered the products.
A spokeswoman for Dah Sing refused comment on Tam’s case.
But asked why they continued to sell Lehman products despite knowing the bank was close to collapse, she said: “The rating of Lehman Brothers was still high at that time. … Its collapse happened so suddenly that it was unexpected for all of us.”
For weeks, the investors have staged protests outside the banks and clashed with police while demanding a full refund of their original investments.
Hong Kong’s de facto central bank said it is investigating the banks that sold the products, while politicians have threatened class action suits.
Sitting under the trees to recover after an hour of shouting slogans and waving placards in a recent protest outside the city’s legislature, Tam said: “I will keep protesting until they give me back my money. What else can I do?”
Intel Corp chief executive officer Lip-Bu Tan (陳立武) is expected to meet with Taiwanese suppliers next month in conjunction with the opening of the Computex Taipei trade show, supply chain sources said on Monday. The visit, the first for Tan to Taiwan since assuming his new post last month, would be aimed at enhancing Intel’s ties with suppliers in Taiwan as he attempts to help turn around the struggling US chipmaker, the sources said. Tan is to hold a banquet to celebrate Intel’s 40-year presence in Taiwan before Computex opens on May 20 and invite dozens of Taiwanese suppliers to exchange views
Application-specific integrated circuit designer Faraday Technology Corp (智原) yesterday said that although revenue this quarter would decline 30 percent from last quarter, it retained its full-year forecast of revenue growth of 100 percent. The company attributed the quarterly drop to a slowdown in customers’ production of chips using Faraday’s advanced packaging technology. The company is still confident about its revenue growth this year, given its strong “design-win” — or the projects it won to help customers design their chips, Faraday president Steve Wang (王國雍) told an online earnings conference. “The design-win this year is better than we expected. We believe we will win
Chizuko Kimura has become the first female sushi chef in the world to win a Michelin star, fulfilling a promise she made to her dying husband to continue his legacy. The 54-year-old Japanese chef regained the Michelin star her late husband, Shunei Kimura, won three years ago for their Sushi Shunei restaurant in Paris. For Shunei Kimura, the star was a dream come true. However, the joy was short-lived. He died from cancer just three months later in June 2022. He was 65. The following year, the restaurant in the heart of Montmartre lost its star rating. Chizuko Kimura insisted that the new star is still down
While China’s leaders use their economic and political might to fight US President Donald Trump’s trade war “to the end,” its army of social media soldiers are embarking on a more humorous campaign online. Trump’s tariff blitz has seen Washington and Beijing impose eye-watering duties on imports from the other, fanning a standoff between the economic superpowers that has sparked global recession fears and sent markets into a tailspin. Trump says his policy is a response to years of being “ripped off” by other countries and aims to bring manufacturing to the US, forcing companies to employ US workers. However, China’s online warriors
RSS