China

Statement from the Provisional Liquidators, MF Global Hong Kong Limited (Provisional Liquidators Appointed) ("MFG HK") 

This is an update following our Statement to clients on 9 December 2011.

 

Clients' funds:

 

As of today, 15 December 2011, the Provisional Liquidators (PLs) currently have just over HK$1 billion under their control in Hong Kong. Of these sums, HK$895 million is held in the Provisional Liquidators' accounts at Standard Chartered Bank, and HK$116 million is held in fixed deposits at MFG-HK's Hong Kong based banks.

 

Interim Distribution Application:

 

The Hong Kong Court has today sanctioned an interim distribution of up to HK$500 million to "Qualifying Clients" of MFG-HK.

 

In order to be a "Qualifying Client" and receive an interim payment, the following conditions will need to be met:

 

1. a client must be entitled to receive money out of the clients' funds now held by MFG-HK;

 

2. a client (and its affiliates) must have repaid any amounts owed to MFG-HK and/or any affiliate of MFG-HK;

 

3. a client must have signed a letter of undertaking, acknowledging that the interim distribution payment remains subject to adjustment and undertaking to repay on demand by MFG-HK, and indemnifying MFG-HK and the Provisional Liquidators in respect of, inter alia, any amount that may subsequently be found to have been overpaid to the Qualifying Client following final reconciliation of all transactions and monies held for that Qualifying Client by MFG-HK.

 

The PLs' current expectation is that we should be able to start making the interim distribution payments within the next 2-4 weeks. Using clients' cash balances as at 28 October 2011 as the reference point, this interim distribution is expected to represent a payment of approximately 40% of clients' balances.

 

However, clients who had open positions as at 28 October 20011 should note that their 28 October 2011 cash balances will be adjusted to take into account the subsequent close out or transfer of those open positions.

 

The PLs note that it may take longer than the 2-4 week period to make interim distribution payments to certain clients, in respect of whose position transfers and close outs we are still missing critical data.

 

The PLs will be contacting Qualifying Clients individually to address specific issues relating to the interim distribution, the client's net closed out cash balance, the undertaking and the remaining issues to be addressed in each case prior to any payment being made.

 

Reconciliation of clients' positions:

 

As mentioned in our last update, the Provisional Liquidators are continuing to reconcile clients' positions, using data currently available, but are still missing considerable amounts of information, in the form of statements, confirmations and prices, from overseas brokers and MF affiliates, which means that the reconciliation process will take longer to complete than we would like. As noted above, in some cases, where critical data is missing, there may be a necessary delay in making any payment in respect of the proposed interim distribution.

 

Claim forms:

 

Claim forms are available on KPMG's website: www.kpmg.com/cn now and clients are encouraged to submit their completed claim forms by 16 December 2011, so as to facilitate the early completion of the reconciliation and determination processes.

 

Great care should be taken to fill out the claim form correctly, and to provide all relevant supporting information.

 

Please submit the claim form by email to MFGHKclaims@kpmg.com or by registered post to the Provisional Liquidators, c/o KPMG, 8th Floor, Prince's Building, 10 Chater Road, Central, Hong Kong.

 

Clients of MFG HK are encouraged to contact Ms Jasmine Lai on +852 2913 2539 or email mfglobalhk@kpmg.com should you have any enquires.

 

 

Yours faithfully

For and on behalf of MF Global Hong Kong Limited

 

Patrick Cowley

Joint and Several Provisional Liquidator

 

(The Joint and Several Provisional Liquidators act as agents of MFG-HK without personal liability)