HONG KONG - HONG KONG investors vowed on Tuesday to continue to fight for a full refund of their Lehman Brothers-backed financial products, despite a government proposal for banks to buy back their bonds.

The government said on Monday that they had urged banks and brokers who sold the so-called 'mini-bonds' to buy back the products from clients at their estimated market value.

Disgruntled investors have argued the banks did not fully explain the risks associated with the products, which were backed by collapsed US investment bank Lehman Brothers.

'Buying back the bonds from the investors at the current market value is the least they can get back,' Mr To told AFP.

'The banks would not be required to shoulder the responsibility for mis-selling financial products to their clients under the proposal, when in fact they should be punished.'

He said bond holders, who bought an estimated 12.7 billion Hong Kong dollars (S$2.39 billion) of the products, would lose out, because the dire market conditions meant they would only get back around 30 per cent of their value.

However, some financial analysts estimated that investors could get back about 60 to 70 per cent of their investment under the proposal, newspaper Mingpao reported on Monday.

The Democratic Party and other parties will hold protests against the government and bond sellers outside the city's legislature building on Wednesday, when chief executive Donald Tsang will attend the first session of newly-elected lawmakers.

Mr John Tsang, the city's financial secretary, said in a statement released onMonday that the proposal was met with a positive response from distributors.

'I believe it is the best way forward. It will avoid the need for investors to go through a long and tedious liquidation process... This proposal will enable the investors to get some of their money back quickly,' he said.

Lehman Brothers, one of Wall Street's most established banks, collapsed last month, sparking turmoil on financial markets across the world. -- AFP