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"To society, you cannot really wash your hands of the entire matter ... You are the director," said another legislator James To. HSBC's Sayers said Lehman Brothers had a high credit rating when the mini-bonds were sold and that the Hong Kong government had approved the products. "None of us, unfortunately, had the benefit of foresight to know what terrible circumstances would happen," she said. Meanwhile, the local banks that offered to buy back the mini-bonds from investors have put that plan on hold because of legal issues raised by Lehman's lawyers. The Hong Kong Association of Banks said in a statement to the legislature on Monday the market prices of the mini-bonds depends in part on the value of the collateral they are backed by. But those prices are now inaccurate because Lehman's lawyers claim the failed investment bank should receive proceeds from any sale of the collateral first, the association said. "The banks have said clearly they will continue to support the buyback plan, but they need to clarify the legal issues ... Right now I can't give you a clear timetable," Hong Kong Secretary for Financial Services and the Treasury K.C. Chan told legislators Tuesday.
[Associated
Press;
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