All finance officials, including Hong Kong Monetary Authority chief executive Joseph Yam, will remain in office and faithful to their duties to tackle the financial tsunami, Chief Executive Donald Tsang and the financial chief said.

Tsang commented on his relationship with Yam in a radio phone-in program yesterday.

The chief executive was repeatedly questioned about the government's handling of the financial crisis in the program and in the Legislative Council question-and-answer session.

"Yam is my close comrade. We need to be faithful to our positions during this time to face the challenges. Yam will not resign or retire early. I don't want to make further comment. All finance officials need to whole-heartedly focus on the crisis," he said.

Financial Secretary John Tsang joined the chief executive in affirming Yam's role in the authority in a written statement released last night.

"His (Yam's) hard work over the years to reinforce Hong Kong's financial system and his contingency planning are now showing their full value," he said. "I look forward very much to continuing to work with him both through and beyond the present stormy times."

Concerns on the future of Yam were raised when Tsang delivered his policy address Wednesday. Tsang told reporters that Yam, born in 1947, needs to prepare to hand over his reign to others. There were speculations earlier that Yam will step down next year.

Apart from addressing the Joseph Yam issue, Tsang yesterday reiterated his call for unity to face the challenges and measures to protect investors when asked for more decisive action to handle the Lehman Brothers incident.

Tsang gave an ultimatum to banks Wednesday, asking them to respond to the government buyback proposal over the Lehman Brothers minibond saga within this week and pledging to inject funds to help investors involved.

However, he reiterated yesterday that the government is not forcing banks to buy back the minibonds.

He said the authority will investigate the whole Lehman Brothers incident and will consider whether to tighten regulations on the sale of such product. But he refused to penalize any officials at the time being.

"We should focus on handling the financial crisis and make a review later," he said. "We will seriously follow up the matter if it is found to be a criminal offence."

Shortly after Tsang delivered his policy address, a client of DBS Bank (Hong Kong) said the bank has made a settlement with two of its clients.

The two buyers are from the same family surnamed Chan. One of its family member said the mother, 84, and his mentally-ill brother, 58, who had a fixed deposit in the bank, were asked by bank staff to purchase the products that were worth HK$560,000.

"They have fixed deposits in the bank. One of the staff called my brother and asked him to buy the product which offered a higher interest rate. The staff said my brother could get back the deposit," Chan said, adding the compensation was satisfactory but refused to disclose details.

However, the bank said last night that it "has not made any settlements with any parties on the grounds of alleged mis-selling". But its spokesman said that the bank has been proactively engaging relevant customers and following up their cases.

Meanwhile, Consumer Council chief executive Connie Lau said the Consumer Representative Action Fund has so far accumulated a total of HK$16 million and added it is hard to say if the amount is enough should Lehman Brothers investors decide to take legal actions using the fund. She reiterated that the council will seek meditation before resorting to legal actions.

(HK Edition 10/17/2008 page1)