NEW YORK -- The Hongkong and Shanghai Banking Corp., which bought out the failed Golden Pacific National Bank, opened for business Friday to a swell of anxious Chinatown customers.
Hundreds of depositors, mainly immigrant Chinese, lined up outside the former Golden Pacific Canal Street headquarters -- now a branch of the Hongkong and Shanghai Bank. Some waited from early morning until 3 p.m. for the doors to open.
It was the first time Golden Pacific customers had access to their bank accounts since federal officials ordered the bank closed June 21 after federal officials found 'banking irregularities' and liabilities of $157.1 million.
The Hong Kong-based bank paid $6.4 million to take over $117 million of the bank's insured deposits, Federal Deposit Insurance Corporation spokesman Alan Whitney said. The transfer was approved Wednesday in a meeting of the FDIC directors.
'This transfer is not a merger,' Whitney said. 'The remnants of the Golden Pacific National Bank are in the hands of the FDIC.'
Since the Hong Kong bank only took over the insured deposits, the fate of deposits in excess of $100,000, the maximum insured by the FDIC, is still 'uncertain,' Whitney said.
The Golden Pacific bank had 170 accounts with over $100,000 and a total of $9.8 million exceeding the insured amount.
In addition, the bank had issued between 400 and 500 so-called 'yellow certificates'in amounts of $10,000 and up that depositors apparently thought were certificates of deposit. Such certificates are not clearly covered.
FDIC officials are investigating the 'yellow certificates,' some of which Whitney said were 'quite substantial,' to determine whether they will be covered.
About 150 FDIC employees, including some who spoke Chinese, were brought in from around the country to digthrough bank records before a sale was considered, Whitney said.
The Hongkong Bank has branches in Chinatown and Flushing in Queens that cater to Chinese customers. It also has two other branches in the city and plans to operate offices in all four former Golden Pacific branches, said bank spokesman Douglas Dougherty.
Former Golden Pacific employees were hired to work at the Hongkong Bank offices. Chinese-speaking bank employees reassured worried customers who waited for much of the day outside the ornate bright-red columned Canal Street branch and served them tea and doughnuts.
Whitney said the Hong Kong-based banking giant, which owns approximately 51 percent of Marine Midland Banks, made the only bid for the bank.
FDIC Chairman William Issac hailed the sale, claiming it would allow depositors to get their money 'with a minimum of delay and inconvenience.'
On Tuesday, bank chairman and president Joseph Chuang went to Washington to meet with FDIC officials. He denied any wrongdoing, accounting irregularities or other misconduct in connection with the management of the bank.