Mon, May 06, 2013 - Page 14 News List

Banks told to return NT$100 million to Lehman Hong Kong

ISSUE OF INTEREST:The amount is interest owed by the Taiwan High Speed Rail to the Hong Kong firm, according to the Financial Supervisory Commission

Staff writer, with CNA

A court has ruled that banks that hold NT$100 million (US$3.39 million) in interest belonging to Lehman Hong Kong must return the money to the company, the Financial Supervisory Commission (FSC) said yesterday.

According to the commission, the amount is interest owed by the Taiwan High Speed Rail Corp (台灣高鐵) to the Hong Kong company, which is one of the creditors in the high-speed railway’s syndicated loans.

LOCAL INVESTORS

When Lehman Brothers Holdings Inc declared bankruptcy in the US in 2008, the commission directed the banks to freeze the NT$100 million in a move to protect local investors affected by the bankruptcy.

According to the commission, the value of structured notes owned by local investors linked to Lehman Brothers totaled about NT$40 billion.

THIRD TRIAL

The court ruled in a third trial that Lehman Brothers’ franchises in the US and Hong Kong are independent of each other and that although the government can execute creditor’s rights against the US company, it does not have the right to keep any money that belongs to the Hong Kong company.

RESPECTING RULING

Banking Bureau head Kuei Hsien-nung (桂先農) said the commission “respects the ruling,” but added that it had instructed the banks to take the action at the time out of consideration of “protecting the rights of Taiwanese investors.”

He said the public would have labeled the government “useless” if it had not taken any action and had allowed Lehman Hong Kong to obtain the money.

This story has been viewed 1615 times.
TOP top