MAS has asked the financial institutions to give priority to the vulnerable investors. These are the elderly, low educated and the first time investors. The financial institutions have agreed to take full responsibility for these vulnerable investors who have been mis-sold. The full responsibility includes compensation for part or the full amount that they have lost. This is a an encouraging first step.
I wish to ask the other investors, who do not fall into the “vulnerable group” to be patient and to strong. If you have been equally misled into investing in these structured products, and it seems to be clearly the case, you have a strong case to ask for compensation. But, you have to be reasonable in your expectation and may have to accept partial compensation that is lower than the “vulnerable investors”.
Let us take this at the next step. In the meantime, you should lodge your complaint.
Friday, October 17, 2008
Statutory declaration - Glenn Knight
Mr. Tan,
We have approached Glenn Knight to do statutory declaration and show him our complaint letter to Hong Leong and MAS. He was patient, listened and jotted down notes. Glenn told us that some victims from Maybank are also meeting up with him.
Glenn highlighted that for the class suit against HONG LEONG to be strong, we should gather more victims. This would be a good case to show that there was a certain pattern of behaviour by the bank to mislead the customers.
Those who have been mis-sold and heard similar things from their own RM during the sales pitch such as:-
1) This is a low-risk product.
2) The principal is protected.
3) Minibonds is a BONDS.
4) Lehman Brothers not mentioned.
5) bankruptcy of Lehman Brothers not mentioned.
If you are interested, you can book an appointment with him. To save precious time, do DO YOUR HOMEWORK! Those victims from Maybank can also contact him.
To prepare this declaration, you have to provide the answers to the following questions:
1. Your name, NRIC, address, telephone
2. How did you get involved in the investment?
3. Which financial institution, branch, amount invested, date
4. What happened when you purchased the investment?
5. Were you alone or accompanied by another person? Who?
6. What did the representative (who sold the investment to you) tell you about investment?
7. Did the representative tell you about any guarantee on your investment?
8. Did they make you sign any form regarding the investment? Did you understand the content of the form? Was it given to you before or after you agreed to make the investment? Did you read the form? Did you understand the content?
9. Did you rely on the advice of the representative in making the investment? Which were the important aspects of the advice?
10. Do you have any other statements to make regarding this matter?
The lawyer fees include the fee payable to the Commissioner of Oath.
Fee $120 plus GST
Bernard & Rada Law Corporation
50 Robinson Road #08-00
VTB Building
Singapore 068882
Call Mr. Glenn Knight or his secretary, Ms Ivy Goh (Tel: 68999888)
Julie
We have approached Glenn Knight to do statutory declaration and show him our complaint letter to Hong Leong and MAS. He was patient, listened and jotted down notes. Glenn told us that some victims from Maybank are also meeting up with him.
Glenn highlighted that for the class suit against HONG LEONG to be strong, we should gather more victims. This would be a good case to show that there was a certain pattern of behaviour by the bank to mislead the customers.
Those who have been mis-sold and heard similar things from their own RM during the sales pitch such as:-
1) This is a low-risk product.
2) The principal is protected.
3) Minibonds is a BONDS.
4) Lehman Brothers not mentioned.
5) bankruptcy of Lehman Brothers not mentioned.
If you are interested, you can book an appointment with him. To save precious time, do DO YOUR HOMEWORK! Those victims from Maybank can also contact him.
To prepare this declaration, you have to provide the answers to the following questions:
1. Your name, NRIC, address, telephone
2. How did you get involved in the investment?
3. Which financial institution, branch, amount invested, date
4. What happened when you purchased the investment?
5. Were you alone or accompanied by another person? Who?
6. What did the representative (who sold the investment to you) tell you about investment?
7. Did the representative tell you about any guarantee on your investment?
8. Did they make you sign any form regarding the investment? Did you understand the content of the form? Was it given to you before or after you agreed to make the investment? Did you read the form? Did you understand the content?
9. Did you rely on the advice of the representative in making the investment? Which were the important aspects of the advice?
10. Do you have any other statements to make regarding this matter?
The lawyer fees include the fee payable to the Commissioner of Oath.
Fee $120 plus GST
Bernard & Rada Law Corporation
50 Robinson Road #08-00
VTB Building
Singapore 068882
Call Mr. Glenn Knight or his secretary, Ms Ivy Goh (Tel: 68999888)
Julie
Lost the sense of bonding and togetherness
Dear Mr. Tan Kin Lian
I am a retiree in my sixties and, like you, my heart sentiments and empathies are for the man-in-the- street, ordinary Singapore citizens, and the senior citizens, who are not able to express themselves on their plights and miseries, for lack of ability, education, literacy, IT skills and media know how.
The plight of the poor misguided uncles and aunties, and including my wife and I, who laboured all their lives trusting in the government's promise of a better life, when they can retire with their CPF nest eggs, have just had their dreams shattered and crumbled by the latest chain of events from the financial collapse from around the world. Some of us may be in the same age bracket as a few of our longstanding national leaders, some of whom have passed on, and some who are still giving counsel on the affairs of state. How does one compare the earning of a poor cleaner or bus or taxi driver, with that of those whose monthly salary income is 2000 times as much, or whose lifetime savings is not even one fifth of one months salary of some.
It is not my mission and agenda to protest against the establishment, just for protest sake. But we are now talking about retirees and hardworking citizens who have saved diligently and conscientiously for nearly all their working lives, and as they now walk into their sunset years, they have just suddenly seen the sun go down, without being sure whether it will rise up again the next day.
This is a very sad and human tragedy for Singaporean leaders to address quickly. There is no point in building more of the asset rich Singapore hardware, when the national heartware is in tatters. We have to offer a temple of hope, in order to create a real sense of community belonging in this small so called ' Red Dot island paradise'
Whilst we are shut out our city to entertain and accomodate our foreign guests, as they pop champagne and feast on caviar and veal, whilst they watch some silly machine zooming by, our taxi drivers, retailers and restaurants are hurting from lack of patronage and support. Whilst Rome burns, we are makiing sport.
It is paradox, and an irony, when well qualified and able young Singapore born sons and daughters, leave this 'island paradise' for greener pastures in Australia, NZ, the U.S., Canada, and may not come back home, and we then encourage new alien migrants from neighbouring feeder countries, offering them PR or Singapore citizenship after two years, because they can play better ping pong, or badminton, or football to add to our talent pool.
On the one hand we have full born and bred political opposition members who risk and sacrifice all they have and owned to speak up for the silent Singaporeans, but they are crucified on our court altar, for their their defiance and different points of view. Are we supposed to behave like obedient Singaporean sheep that goes "baa baa, yes sir, yes sir, you're right again,
all the time" .
What has happened to the days of the "gotong royong" when we were more kin and kind as near equals with 'cangkuls and poon kees' in hand, to re-build track roads and clean up the beaches. That was a time when we truly felt the kampong community spirit of collective self help, and we could relate and identify very strongly with our MPs and national leaders fighting for this country's survival. What has happened to the recognition and memories of some of our surviving pioneer old guards like Toh Chin Chye, Goh Keng Swee, Othman Wok, Ong Pang Boon, Jek Yeun Thong? Are they forgotten, because they have now become irelevant today? What about those who have also contibuted but are no longer with us - Devan Nair, S Rajaratnam., E.W Barker, Howe Yoon Chong, George Bogaars, Hon Sui Sen, Lee Siew Choh, Lim Chin Siong, J.B. Jeyaretnam and others.
This country and this nation's progress in the last 40+ years has been one of miraculous transformation, if we judge our report card by stainless steel, gleaming glass, bricks and mortar, and manicured trees and the landscaped gardens. No Singaporean in their 50 -80 years, would deny our government this credit. Our port, airport, CBD, MRT, highways, public housing, schools and institutions of learning stand out as wonderful trophies to our national sense of accomplishment, and much pride for the civil servants, town planners and estate managers. I, myself, have been a beneficiary of this economic progress, when I recall, as a kid, how I used to take my bath from a public stand pipe, or well, and poo into a bucket. Yes, I am grateful to this goverment for improving our creature comfort, dignity and quality of living, but not of life.
But somewhere along the way, coming to where we are today, we seem to have lost that sense of bonding and togetherness with our founding fathers. Our progress reminds me of the book "Animal Farm" by George Orwell. With the success of the physical transformation of the environment, there has also been an attitudinal and spiritual transformation of another kind. It has been a gradual process and shift of our cultural values and national priorities
As our leaders work and live in fine comfort, we the citizens of Singapore are mortgaged to our hilt, and now even our hard earned savings are going up in smoke, because the people in charge knows how to set up the traffic rules, but did not do anything to monitor and track the traffic flow.
Hence for many of us who continue to place our blind faith and trust in a government backed and publicly endorsed brand name, and then to be told when the bottom falls out, "you make your own bed, you lie in it". " If you fall down from bed, through no fault of your own, that's too bad. That's life. The market forces of caveat emptor will have to prevail "
It is like saying, we have proudly built for you a wonderful zebra crossing, but you can cross at your own risk, without the need for traffic light controls..
You are a brave man for doing what you are doing now, and I will refrain from egging you on, by being just an entertained spectator. Some people will do that, but when the riot vans come around, many will scatter and hide. I am a peace loving person, but like many Singaporeans who have helped to build and make this place our home, I too have my gripes and grouches, at the way we are often being programmed and manipulated by those who know what is best for us.
It will be interesting to see if the Prime Minister will still deliver on his national rally pledge, that no one will be left out of the national banquet and pie sharing, even in this difficult and trying time. To the rich dining in aircon comfort, an unfinished bowl of rice is only just $0.50 cents. To the impoverised and starving, that same bowl of rice, could represent a days wage, of burning and straining in the hot sun, or some bent old lady collecting tin cans and discarded cartons just to stay alive, let alone calling it a living.
May God bless, and keep you.
PatAngel
I am a retiree in my sixties and, like you, my heart sentiments and empathies are for the man-in-the- street, ordinary Singapore citizens, and the senior citizens, who are not able to express themselves on their plights and miseries, for lack of ability, education, literacy, IT skills and media know how.
The plight of the poor misguided uncles and aunties, and including my wife and I, who laboured all their lives trusting in the government's promise of a better life, when they can retire with their CPF nest eggs, have just had their dreams shattered and crumbled by the latest chain of events from the financial collapse from around the world. Some of us may be in the same age bracket as a few of our longstanding national leaders, some of whom have passed on, and some who are still giving counsel on the affairs of state. How does one compare the earning of a poor cleaner or bus or taxi driver, with that of those whose monthly salary income is 2000 times as much, or whose lifetime savings is not even one fifth of one months salary of some.
It is not my mission and agenda to protest against the establishment, just for protest sake. But we are now talking about retirees and hardworking citizens who have saved diligently and conscientiously for nearly all their working lives, and as they now walk into their sunset years, they have just suddenly seen the sun go down, without being sure whether it will rise up again the next day.
This is a very sad and human tragedy for Singaporean leaders to address quickly. There is no point in building more of the asset rich Singapore hardware, when the national heartware is in tatters. We have to offer a temple of hope, in order to create a real sense of community belonging in this small so called ' Red Dot island paradise'
Whilst we are shut out our city to entertain and accomodate our foreign guests, as they pop champagne and feast on caviar and veal, whilst they watch some silly machine zooming by, our taxi drivers, retailers and restaurants are hurting from lack of patronage and support. Whilst Rome burns, we are makiing sport.
It is paradox, and an irony, when well qualified and able young Singapore born sons and daughters, leave this 'island paradise' for greener pastures in Australia, NZ, the U.S., Canada, and may not come back home, and we then encourage new alien migrants from neighbouring feeder countries, offering them PR or Singapore citizenship after two years, because they can play better ping pong, or badminton, or football to add to our talent pool.
On the one hand we have full born and bred political opposition members who risk and sacrifice all they have and owned to speak up for the silent Singaporeans, but they are crucified on our court altar, for their their defiance and different points of view. Are we supposed to behave like obedient Singaporean sheep that goes "baa baa, yes sir, yes sir, you're right again,
all the time" .
What has happened to the days of the "gotong royong" when we were more kin and kind as near equals with 'cangkuls and poon kees' in hand, to re-build track roads and clean up the beaches. That was a time when we truly felt the kampong community spirit of collective self help, and we could relate and identify very strongly with our MPs and national leaders fighting for this country's survival. What has happened to the recognition and memories of some of our surviving pioneer old guards like Toh Chin Chye, Goh Keng Swee, Othman Wok, Ong Pang Boon, Jek Yeun Thong? Are they forgotten, because they have now become irelevant today? What about those who have also contibuted but are no longer with us - Devan Nair, S Rajaratnam., E.W Barker, Howe Yoon Chong, George Bogaars, Hon Sui Sen, Lee Siew Choh, Lim Chin Siong, J.B. Jeyaretnam and others.
This country and this nation's progress in the last 40+ years has been one of miraculous transformation, if we judge our report card by stainless steel, gleaming glass, bricks and mortar, and manicured trees and the landscaped gardens. No Singaporean in their 50 -80 years, would deny our government this credit. Our port, airport, CBD, MRT, highways, public housing, schools and institutions of learning stand out as wonderful trophies to our national sense of accomplishment, and much pride for the civil servants, town planners and estate managers. I, myself, have been a beneficiary of this economic progress, when I recall, as a kid, how I used to take my bath from a public stand pipe, or well, and poo into a bucket. Yes, I am grateful to this goverment for improving our creature comfort, dignity and quality of living, but not of life.
But somewhere along the way, coming to where we are today, we seem to have lost that sense of bonding and togetherness with our founding fathers. Our progress reminds me of the book "Animal Farm" by George Orwell. With the success of the physical transformation of the environment, there has also been an attitudinal and spiritual transformation of another kind. It has been a gradual process and shift of our cultural values and national priorities
As our leaders work and live in fine comfort, we the citizens of Singapore are mortgaged to our hilt, and now even our hard earned savings are going up in smoke, because the people in charge knows how to set up the traffic rules, but did not do anything to monitor and track the traffic flow.
Hence for many of us who continue to place our blind faith and trust in a government backed and publicly endorsed brand name, and then to be told when the bottom falls out, "you make your own bed, you lie in it". " If you fall down from bed, through no fault of your own, that's too bad. That's life. The market forces of caveat emptor will have to prevail "
It is like saying, we have proudly built for you a wonderful zebra crossing, but you can cross at your own risk, without the need for traffic light controls..
You are a brave man for doing what you are doing now, and I will refrain from egging you on, by being just an entertained spectator. Some people will do that, but when the riot vans come around, many will scatter and hide. I am a peace loving person, but like many Singaporeans who have helped to build and make this place our home, I too have my gripes and grouches, at the way we are often being programmed and manipulated by those who know what is best for us.
It will be interesting to see if the Prime Minister will still deliver on his national rally pledge, that no one will be left out of the national banquet and pie sharing, even in this difficult and trying time. To the rich dining in aircon comfort, an unfinished bowl of rice is only just $0.50 cents. To the impoverised and starving, that same bowl of rice, could represent a days wage, of burning and straining in the hot sun, or some bent old lady collecting tin cans and discarded cartons just to stay alive, let alone calling it a living.
May God bless, and keep you.
PatAngel
Today: Man with a Mission
.........How else would you describe a man who is “impatient, easily annoyed and often angry” — according to a former employee — but always having a heart for the man-on-the-street?
“It is completely consistent with his conduct at NTUC Income when he often commented publicly on various matters. I can’t see him keep quiet about something he feels is wrong and affects ordinary people,” said Mr Stanley Jeremiah, who was NTUC Income’s general manager of life and health insurance department between January and August 2006.
Mr Dharmendra Yadav, who was a corporate counsel at the insurance cooperative, added: “When I joined NTUC Income, my mentor told me, ‘Tan Kin Lian is one person who will stand up for what he thinks is right. And he is the one person who will let you do the same’.”
http://www.todayonline.com/articles/282198.asp
“It is completely consistent with his conduct at NTUC Income when he often commented publicly on various matters. I can’t see him keep quiet about something he feels is wrong and affects ordinary people,” said Mr Stanley Jeremiah, who was NTUC Income’s general manager of life and health insurance department between January and August 2006.
Mr Dharmendra Yadav, who was a corporate counsel at the insurance cooperative, added: “When I joined NTUC Income, my mentor told me, ‘Tan Kin Lian is one person who will stand up for what he thinks is right. And he is the one person who will let you do the same’.”
http://www.todayonline.com/articles/282198.asp
TV news on MAS conference
Read the TV news on the MAS conference and the media release in:
http://theonlinecitizen.com/2008/10/independent-parties-to-highlight-mis-selling-to-mas/#comments
http://theonlinecitizen.com/2008/10/independent-parties-to-highlight-mis-selling-to-mas/#comments
Investor meets HSBC Trustee
Dear Mr.Tan
I decided to vist HSBC Trustee's office because I could not get any satisfactory answers over their hotline. Two ladies in black pantsuits ushered me into a meeting rm. They appear to be quite senior in rank and asked for my identity card before taking my queries. I did not manage to obtain their names. Here are my questions and their replies:
1) Did you sieze the underlying assets and have examined them? Are they worthless, fraudulent or they are genuine and have value?
Answer: We are still examining and evaluating them.
2) What constitute the underlying assets of series 5 & 6 which were seized?
Answer: We cannot divulge this info.
3) MAS has directed you to keep investors informed what options are available to investors?
Answer: Presently some parties have approached them to look at the documents as potential new swap Counterparty but there are no offers. If after a period of time have lapsed and no offers are forthcoming they will proceed to liquidate.
4) You mean proceed with a fire sales in a frozen credit market? Can you hold it to maturity or for a year or two waiting for conditions to improve? or call an AGM to put it to shareholders?
Answer: AGM will be called only for the purpose of approving the new Swap Counterparty and 75% votes in $ terms is required. No shareholders approval is required for liquidation. As Trustee they cannot hold on to shareholders' assets indefinitely.
LTW
REPLY
The replies given by HSBC Trustees are unsatisfactory. I hope that the trustees realise that they have a fiduciary duty to the investors to give a complete statement of account on a timely basis and to take necessary action to protect the best interest of the investors. I shall be consulting a lawyer on this matter to see if there areas of breach of duty.
I decided to vist HSBC Trustee's office because I could not get any satisfactory answers over their hotline. Two ladies in black pantsuits ushered me into a meeting rm. They appear to be quite senior in rank and asked for my identity card before taking my queries. I did not manage to obtain their names. Here are my questions and their replies:
1) Did you sieze the underlying assets and have examined them? Are they worthless, fraudulent or they are genuine and have value?
Answer: We are still examining and evaluating them.
2) What constitute the underlying assets of series 5 & 6 which were seized?
Answer: We cannot divulge this info.
3) MAS has directed you to keep investors informed what options are available to investors?
Answer: Presently some parties have approached them to look at the documents as potential new swap Counterparty but there are no offers. If after a period of time have lapsed and no offers are forthcoming they will proceed to liquidate.
4) You mean proceed with a fire sales in a frozen credit market? Can you hold it to maturity or for a year or two waiting for conditions to improve? or call an AGM to put it to shareholders?
Answer: AGM will be called only for the purpose of approving the new Swap Counterparty and 75% votes in $ terms is required. No shareholders approval is required for liquidation. As Trustee they cannot hold on to shareholders' assets indefinitely.
LTW
REPLY
The replies given by HSBC Trustees are unsatisfactory. I hope that the trustees realise that they have a fiduciary duty to the investors to give a complete statement of account on a timely basis and to take necessary action to protect the best interest of the investors. I shall be consulting a lawyer on this matter to see if there areas of breach of duty.
Prompt reply to help "lost" investors
Dear Mr. Tan,
I wrote to you and you give me a reply to read this blog:
http://tankinlian.blogspot.com/2008/10/individual-advice.html
I understand that you must be very, very busy to attend to some many people, like me, who ask individual questions. We do so, because we are lost and do not know where to turn to.
But I understand that you must be facing a lot of pressure and take a lot of time to read some many personal problems. What I want to say is that, in spite of the pressure, you did bother to give me an immediate reply. This is wonderful.
I want to tell you that even the simple standard reply is helpful to me. I will attend the Saturday meetings at Speaker's Corner in Hong Lim to meet other investors in the same situation as me.
Thank you once again. Keep up the good work. Please consider to stand for President.
I wrote to you and you give me a reply to read this blog:
http://tankinlian.blogspot.com/2008/10/individual-advice.html
I understand that you must be very, very busy to attend to some many people, like me, who ask individual questions. We do so, because we are lost and do not know where to turn to.
But I understand that you must be facing a lot of pressure and take a lot of time to read some many personal problems. What I want to say is that, in spite of the pressure, you did bother to give me an immediate reply. This is wonderful.
I want to tell you that even the simple standard reply is helpful to me. I will attend the Saturday meetings at Speaker's Corner in Hong Lim to meet other investors in the same situation as me.
Thank you once again. Keep up the good work. Please consider to stand for President.
Interview with Zaobao
Dear Mr Tan,
Many of our readers and those who have invested in structured products are appreciative of your help in recent weeks but unfortunately quite a lot of them do not understand english and have not been able to act promptly.
In order for our readers to understand what actions they should be taking and to understand you as a person better, would you be able to grant us an exclusive interview.
On the current structured products saga
1. Congratulations Mr Tan, we understand from your blog that your granddaughter was born at 6pm on 11 October when you were speaking at the Speaker's Corner. You've said you'll like to nickname her "Speaker". Out of curiousity, is her chinese name going to be the Fang Lin (chinese for Hong Lim?)
Reply: My grand daughter's name is Nadya Zagarodnova. My son-in-law comes from Russia and now works in Nanyang Technological University. I like to give her the nickname of "Speaker" but this is between her and me. She has a Chinese name, but it is not Fang Lin.
2. Many of our readers only know you as the former CEO of NTUC Income. Could you share with us your recent work related engagements? What have you been involved in lately aside from helping distressed investors?
Reply: I am now a consultant to two insurance companies, one in Singapore and another in Indonesia. I also teach Risk Management & Insurance at Singapore Management University. I spend time to write a blog www.tankinlian.blogspot.com to educate the public about financial planning and insurance.
3. You are well known in the insurance industry and have always been giving consumers insurance advice. When did you start giving financial advice as well? Do you take an interest in consumer finance? Where do you get your financial information from?
Reply: I educate the general public about financial planning and insurance. I get my financial information through my own research, and the research of a few financial experts. I usually educate people about the basic tips on financial planning. This is general knowledge, but I am able to put them in a form that is easy for the public to understand.
4. What have you been doing for the investors in relation to this crisis? When did you start helping them? What made you do so?
Reply: I organise a Petition to ask the Singapore Government to investigate if there were any wrong doing or breach of the law by the financial institutions that created and marketed the structured products that has caused unexpected large losses to several thousand of risk adverse investors. The specific laws involved are the Financial Advisers Act (section 27), Securities and Futures Act (section 199) and the Trustees Act. Many investors said that they were misled by the advertisements, brochures and other materials and by the explanations and assurances given by the representatives of the financial institutions.
5. Although many Singaporeans were victimised by structured products, but there seems to be no one that would to take the leadership role in gathering fellow victims to take collective action, especially someone with a strong leadership background as yours. Do you see this as a problem with Singaporeans?
Reply: The proper people to provide the leadership should be the regulator, i.e. the Monetary Authority of Singapore, or the Consumer Association.
In the case of Hong Kong, the Monetary Authority has been pro-active in receiving the complaints of the retail investors and in investigating these complaints. This is a more satisfactory approach in addressing the concerns and complaints of the retail investors who have lose substantial amounts of their hard earned savings.
6. You're not an investor of the affected structured products. There are some who have queried your motivations and intentions for helping affected investors. They've also queried what you stand to gain from this. What is your response to these people?
Reply: I hope that more people can come forward to help other people who are weak and have suffered greatly from alleged misconduct by the financial institutions. Many of these investors felt strongly that they were "cheated" of their hard earned savings. I sympathise with their plight and help to articulate their anguish. I will also help them to find some redress. I have the assistance of a few other people who have come forward to help. Some are investors caught in these structured products. Others are non-investors but are willing to give their time to help the victims.
7. A year ago, you've started advising investors against structured products. Why so? How many structured product related emails do you receive in a day in the last one month?
Reply: I find these structured products to be unsatisfactory. The advertisements, marketing materials and prospectus are unsatisfactory. They are not transparent and cannot be understood by financial experts, like me. How can these products be approved to be sold to the general public in this form? As the risks cannot be clearly assessed and could lead to a loss of the entire principal, I strongly advised the general public to avoid these products. A few people have read my blog and took my advice. They now sent e-mails to thank me for saving them from making big losses of their savings.
8. What other products do you see to be at risk (eg. Dual currency deposits?)
Reply: I advise against Dual Currency Investments as well. I do not like products where the investors suffer the risk of large losses but are not given the benefit of large gains (as the major portion of the gains are taken by the financial institution). I find these products to be unfair to the investors. They are taken advatange of, due to their ignorance.
9. In your petition to MAS, you've requested for an independent inquiry to be set up. What results do you hope to achieve?
Reply: If there are wrong doings and breach of the regulations, e.g. misrepresentation, dishonesty or fraud, the authority can charge these alleged offenders to court. Alternatively, the alleged offenders can agree to give appropriate compensation to the victims who have suffered large financial losses due to the wrong doings.
10. What made you decide to organise a gathering at the Speaker's Corner? You plan to make weekly speeches for the next four Saturdays. What will you be talking about? Would you carry out the gathering differently from last Saturday considering many people were just clumped in groups, sharing about their grieviences but did not achieve the objective of taking collective action. Also, there were many elderly present who do not understand english. Do you plan to have a translator?
Reply: I feel it my responsibilty to meet with the people who signed the Petition to give them an update of the progress of the Petition. I also wanted them to have the chance to meet other investors who are in the same situation. This allows them to know each other and to discuss their collective response. They can keep in contact with the other investors in the future, until the issues are fully resolved.
I decided to hold weekly meetings at Speakers Corner to update the investors and allow them to meet with other investors in their sub-groups (according to the structured products or the distributors).
11. Besides setting up a new online petition to collect names of affected individuals, what are your other follow up plans?
Reply: I encourage the investors to visit the lawyer to prepare a statutory declaration. This will strengthen their case when they lodge he complaint against the financial institution or to the Financial Industry Dispute Resolution Center or FiDREC (www.fidrec.com.sg) Some investors want to engage a lawyer to take collective legal action against the distributor. I will help them to find a good lawyer. I hope that the dispute can be settled through other means, but legal recourse will be the last resort.
On politics
12. There were some political figures who appeared at your speech at the Speaker's Corner last Saturday. Did it worry you that they might capitalise on your gathering for their own political agenda?
Reply: I hope that the elected Members of Parliament will attend the future meeting at Speaker's Corner to meet their constituents, hear their anguish and help them to seek appropriate redress. As this is a public meeting, it is within their rights for anyone (including political figures) who are interested in the matter to attend, especially if they are investors who are affected by the failure of the structured products.
13. Are worried that you might become a political figure?
Reply: I think that there is nothing to be ashamed about being a political figure. I do not have any wish to be involved in politics at this time.
14. Do you have any political aspirations? Some investors and members of the public have been encouraging you would to run for our next Presidential elections. Would you consider running for President of Singapore?
Reply: My wife does not like me to run as President of Singapore. She thinks that it is a foolhardy idea. I have to respect her wishes.
15. Some of our colleagues have commented that you remind them of Mr Ngiam Tong Dow. You were seen to be a supporter of government policies when you were helming NTUC Income. However, ever since you've retired, you've adopted an active role in voicing the grieviences of common folk. How do you see this?
Reply: I support policies that are good for the long term interest of Singaporeans and speak against policies that, in my view, are bad for Singaporeans. While I was head of NTUC Income, I have to avoid being involved in social or political issues as they may have a negative impact on the business interests of NTUC Income. After retiring from NTUC Income, I do not have this constraint. I am honoured to be compared with Mr Ngiam Tong Dow, as I respect him greatly.
On yourself
16. You seem to enjoy advising people. You've advised Singaporeans on a variety of things, ranging from the 3-day Diet that you've researched while you were at NTUC Income, to annuities, to insurance, to financial planning. Why so?
Reply: I like to share my knowledge and experience with the common people. I hope that they find my views to be useful to their lives, especially on their financial security. I like to educate the public about financial planning and insurance. I want them to make the right decision, so that they get good value for their savings, and are not given a poor deal.
17. What are your hobbies? You've created logic9 2 years ago and it was very popular then. Do you plan to create more of such games in future?
Reply: I will be publishing new books on Sudoku and Intelligence Quiz. I hope that people like them. I will also create simulation games on the internet to teach people about investing, financial trading and business strategy. I hope that people will find them to be educational, interesting and fun.
18. How many hours of sleep do you get? With so many committments, do you get to spend time with your family?
Reply: I have enough sleep each night. If not enough, I catch up during the weekends. I find time to spend with my family.
19. When did you start your blog? What are the most common questions that you've received? What is the weirdest question or comment you've received so far?
Reply: I started my blog 18 months ago. The cumulative visitors have now exceeded 500,000. It now receives 5,000 unique visitors a day. This is a temporary situation, due to the structured product crisis, Prior to the crisis, the average was 1,000 visitors a day. My blog is www.tankinlian.blogspot.com
20. You give people advise on financial planning. Do you mind sharing with us your personal investment portfolio? What do you invest in (stocks/commodities/bonds/fixed deposits)? What is your best investment so far? What was the worst?
Reply: I invest most of my money in shares and REITS. I believe that they will give the best return over the long term. So far, my share investments are showing a paper loss, but it is all right. I will keep them for 5, 10 or 20 years. The values will recover.
韩咏梅 Han Yong May
Digital Media Editor / Asscoiate Local News Editor
Lianhe Zaobao
Many of our readers and those who have invested in structured products are appreciative of your help in recent weeks but unfortunately quite a lot of them do not understand english and have not been able to act promptly.
In order for our readers to understand what actions they should be taking and to understand you as a person better, would you be able to grant us an exclusive interview.
On the current structured products saga
1. Congratulations Mr Tan, we understand from your blog that your granddaughter was born at 6pm on 11 October when you were speaking at the Speaker's Corner. You've said you'll like to nickname her "Speaker". Out of curiousity, is her chinese name going to be the Fang Lin (chinese for Hong Lim?)
Reply: My grand daughter's name is Nadya Zagarodnova. My son-in-law comes from Russia and now works in Nanyang Technological University. I like to give her the nickname of "Speaker" but this is between her and me. She has a Chinese name, but it is not Fang Lin.
2. Many of our readers only know you as the former CEO of NTUC Income. Could you share with us your recent work related engagements? What have you been involved in lately aside from helping distressed investors?
Reply: I am now a consultant to two insurance companies, one in Singapore and another in Indonesia. I also teach Risk Management & Insurance at Singapore Management University. I spend time to write a blog www.tankinlian.blogspot.com to educate the public about financial planning and insurance.
3. You are well known in the insurance industry and have always been giving consumers insurance advice. When did you start giving financial advice as well? Do you take an interest in consumer finance? Where do you get your financial information from?
Reply: I educate the general public about financial planning and insurance. I get my financial information through my own research, and the research of a few financial experts. I usually educate people about the basic tips on financial planning. This is general knowledge, but I am able to put them in a form that is easy for the public to understand.
4. What have you been doing for the investors in relation to this crisis? When did you start helping them? What made you do so?
Reply: I organise a Petition to ask the Singapore Government to investigate if there were any wrong doing or breach of the law by the financial institutions that created and marketed the structured products that has caused unexpected large losses to several thousand of risk adverse investors. The specific laws involved are the Financial Advisers Act (section 27), Securities and Futures Act (section 199) and the Trustees Act. Many investors said that they were misled by the advertisements, brochures and other materials and by the explanations and assurances given by the representatives of the financial institutions.
5. Although many Singaporeans were victimised by structured products, but there seems to be no one that would to take the leadership role in gathering fellow victims to take collective action, especially someone with a strong leadership background as yours. Do you see this as a problem with Singaporeans?
Reply: The proper people to provide the leadership should be the regulator, i.e. the Monetary Authority of Singapore, or the Consumer Association.
In the case of Hong Kong, the Monetary Authority has been pro-active in receiving the complaints of the retail investors and in investigating these complaints. This is a more satisfactory approach in addressing the concerns and complaints of the retail investors who have lose substantial amounts of their hard earned savings.
6. You're not an investor of the affected structured products. There are some who have queried your motivations and intentions for helping affected investors. They've also queried what you stand to gain from this. What is your response to these people?
Reply: I hope that more people can come forward to help other people who are weak and have suffered greatly from alleged misconduct by the financial institutions. Many of these investors felt strongly that they were "cheated" of their hard earned savings. I sympathise with their plight and help to articulate their anguish. I will also help them to find some redress. I have the assistance of a few other people who have come forward to help. Some are investors caught in these structured products. Others are non-investors but are willing to give their time to help the victims.
7. A year ago, you've started advising investors against structured products. Why so? How many structured product related emails do you receive in a day in the last one month?
Reply: I find these structured products to be unsatisfactory. The advertisements, marketing materials and prospectus are unsatisfactory. They are not transparent and cannot be understood by financial experts, like me. How can these products be approved to be sold to the general public in this form? As the risks cannot be clearly assessed and could lead to a loss of the entire principal, I strongly advised the general public to avoid these products. A few people have read my blog and took my advice. They now sent e-mails to thank me for saving them from making big losses of their savings.
8. What other products do you see to be at risk (eg. Dual currency deposits?)
Reply: I advise against Dual Currency Investments as well. I do not like products where the investors suffer the risk of large losses but are not given the benefit of large gains (as the major portion of the gains are taken by the financial institution). I find these products to be unfair to the investors. They are taken advatange of, due to their ignorance.
9. In your petition to MAS, you've requested for an independent inquiry to be set up. What results do you hope to achieve?
Reply: If there are wrong doings and breach of the regulations, e.g. misrepresentation, dishonesty or fraud, the authority can charge these alleged offenders to court. Alternatively, the alleged offenders can agree to give appropriate compensation to the victims who have suffered large financial losses due to the wrong doings.
10. What made you decide to organise a gathering at the Speaker's Corner? You plan to make weekly speeches for the next four Saturdays. What will you be talking about? Would you carry out the gathering differently from last Saturday considering many people were just clumped in groups, sharing about their grieviences but did not achieve the objective of taking collective action. Also, there were many elderly present who do not understand english. Do you plan to have a translator?
Reply: I feel it my responsibilty to meet with the people who signed the Petition to give them an update of the progress of the Petition. I also wanted them to have the chance to meet other investors who are in the same situation. This allows them to know each other and to discuss their collective response. They can keep in contact with the other investors in the future, until the issues are fully resolved.
I decided to hold weekly meetings at Speakers Corner to update the investors and allow them to meet with other investors in their sub-groups (according to the structured products or the distributors).
11. Besides setting up a new online petition to collect names of affected individuals, what are your other follow up plans?
Reply: I encourage the investors to visit the lawyer to prepare a statutory declaration. This will strengthen their case when they lodge he complaint against the financial institution or to the Financial Industry Dispute Resolution Center or FiDREC (www.fidrec.com.sg) Some investors want to engage a lawyer to take collective legal action against the distributor. I will help them to find a good lawyer. I hope that the dispute can be settled through other means, but legal recourse will be the last resort.
On politics
12. There were some political figures who appeared at your speech at the Speaker's Corner last Saturday. Did it worry you that they might capitalise on your gathering for their own political agenda?
Reply: I hope that the elected Members of Parliament will attend the future meeting at Speaker's Corner to meet their constituents, hear their anguish and help them to seek appropriate redress. As this is a public meeting, it is within their rights for anyone (including political figures) who are interested in the matter to attend, especially if they are investors who are affected by the failure of the structured products.
13. Are worried that you might become a political figure?
Reply: I think that there is nothing to be ashamed about being a political figure. I do not have any wish to be involved in politics at this time.
14. Do you have any political aspirations? Some investors and members of the public have been encouraging you would to run for our next Presidential elections. Would you consider running for President of Singapore?
Reply: My wife does not like me to run as President of Singapore. She thinks that it is a foolhardy idea. I have to respect her wishes.
15. Some of our colleagues have commented that you remind them of Mr Ngiam Tong Dow. You were seen to be a supporter of government policies when you were helming NTUC Income. However, ever since you've retired, you've adopted an active role in voicing the grieviences of common folk. How do you see this?
Reply: I support policies that are good for the long term interest of Singaporeans and speak against policies that, in my view, are bad for Singaporeans. While I was head of NTUC Income, I have to avoid being involved in social or political issues as they may have a negative impact on the business interests of NTUC Income. After retiring from NTUC Income, I do not have this constraint. I am honoured to be compared with Mr Ngiam Tong Dow, as I respect him greatly.
On yourself
16. You seem to enjoy advising people. You've advised Singaporeans on a variety of things, ranging from the 3-day Diet that you've researched while you were at NTUC Income, to annuities, to insurance, to financial planning. Why so?
Reply: I like to share my knowledge and experience with the common people. I hope that they find my views to be useful to their lives, especially on their financial security. I like to educate the public about financial planning and insurance. I want them to make the right decision, so that they get good value for their savings, and are not given a poor deal.
17. What are your hobbies? You've created logic9 2 years ago and it was very popular then. Do you plan to create more of such games in future?
Reply: I will be publishing new books on Sudoku and Intelligence Quiz. I hope that people like them. I will also create simulation games on the internet to teach people about investing, financial trading and business strategy. I hope that people will find them to be educational, interesting and fun.
18. How many hours of sleep do you get? With so many committments, do you get to spend time with your family?
Reply: I have enough sleep each night. If not enough, I catch up during the weekends. I find time to spend with my family.
19. When did you start your blog? What are the most common questions that you've received? What is the weirdest question or comment you've received so far?
Reply: I started my blog 18 months ago. The cumulative visitors have now exceeded 500,000. It now receives 5,000 unique visitors a day. This is a temporary situation, due to the structured product crisis, Prior to the crisis, the average was 1,000 visitors a day. My blog is www.tankinlian.blogspot.com
20. You give people advise on financial planning. Do you mind sharing with us your personal investment portfolio? What do you invest in (stocks/commodities/bonds/fixed deposits)? What is your best investment so far? What was the worst?
Reply: I invest most of my money in shares and REITS. I believe that they will give the best return over the long term. So far, my share investments are showing a paper loss, but it is all right. I will keep them for 5, 10 or 20 years. The values will recover.
韩咏梅 Han Yong May
Digital Media Editor / Asscoiate Local News Editor
Lianhe Zaobao
Interview with Today Paper
1. Why are you doing this? What motivates you?
Reply: For the past 18 months, after I retired from NTUC Income, I have been writing a blog to educate the general public about financial planning and insurance. My blog is www.tankinlian.blogspot.com. I wanted to educate them to make to make the right choice about financial and insurance products, so that they can get a reasonably good return on their savings.
I write several tips on various topics and kept them in my website, www.tankinlian.com/faq. They cover investments, insurance, financial planning and other topics of interest to young people, retirees, parents and other situations.
A year ago, many people asked me about structured products. The products sold a few years ago were the capital guaranteed products. I found that these products guaranteed the safety of the principal, but also guaranteed an extremely low return. I advised people against investing in these products. They can get a better return and more security by investing in government bonds. I was proven right - the investors got a poor return on these capital guaranteed products after waiting patiently for five years.
When the credit-linked securities (such as the minibonds and pinnacle notes) were launched two years ago, I studiend these products with the help of another expert in financial analysis. We concluded that the product is highly risky and give a poor return to the investor (which is not commensurate with the risk). It seemed that the financial institution took away the bulk of the return and leave the high risk to the investor. I advised investors to avoid these products in my blog.
At that time, I was not aware about the extent of the risk, as it was not easy to understand the complex structure, and the prospectus did not give the relevant information.
I do not know how the authority could have approved a prospectus that was supposed to describe the product, when financial experts who spent many hours to read the propectus could not figure out what the structure was. How can you expect the general public who were sold these products to understand the risk that they were taking?
When several of these credit linked securities (which were linked to Lehman Brothers as issuer or as a reference party) were at risk due to the failure of Lehman Brothers, I became horrified to learn the true nature of the structure and the extent of the high risk. I was horrified to learn that so many people were misled into investing their hard earned savings or lifetime savings in these products, often on misrepresentations of the financial institution representatives, or the relationship managers.
It is very clear that most of these investors are risk adverse. They were only trying to earn a higher interest rate to make up for the high inflation of 7%. It is unfair to label them as "being greedy" to get a higher return. If there were properly advised, they should be putting their money on government bonds to earn 3% per annum over 5 years.
I decided to organise a Petition to ask the Singapore Government, in particular the Monetary Authority of Singapore and/or the Commercial Affairs Department to investigate if any law has been broken, particularly section 27 of the Financial Advisers Act, section 199 of the Securities and Futures Act or the Trustees Act. I received 983 signatories who signed the Petition. I lodged the Petition with a report that shows the possible areas that the law has been breached, and presented my arguments to these points.
I was also disappointed at the approach taken by the MAS in handing the complaints. The poor investors were left to lodge their complaints with the financial institutions who sold the products to them. When they lodge their complaints, they were challenged or ridiculed (in some cases) by the officers employed by these financial institutions. It was quite discouraging to hear their stories.
The Hong Kong Monetary Authority adopted a better approach. They set up a hotline and service center and employed 100 people to record the complaints and investigate the cases where there were evidence of mis-selling. They received more than 7,000 complaints (which is 10 times of the number of complaints lodged with the financial institutions in Singapore). This is more satisfactory to the victims.
What is my motivation? Nearly ten thousand people have lost their hard earned savings or their life time savings by being misled into investing in these structured products. The sums involved are huge, $100,000, $200,000, $300,000 or more. Most of them come from modest backgrounds. The invested sums represent 10, 20 or 30 years of hard work and frugality. Should I just stand back and say "Bad luck. If you take risk you have to bear with the consequences. Let's move on? " These people are victims of mis-selling and are helpless in how to seek redress.
These investors were told that these products are safer than bank deposits. If you talk to these investors, you will know that they are clearly careful and risk adverse. It is not just a few people with the others trying to join in the ride. The stories told by most of them are similar.
My motivation is to help these victims who have suffered losses to seek appropriate compensation. I like to see justice - which is a core value in the five stars of Singapore.
2. In bringing up the concerns of the man-in-the-street to the authorities, what is your strategy?
The Petition asked the Singapore Government to make a full and independent investigations into the creation and the marketing of these products and identify the law that could have been breached. It is signed by 983 petitioners. Many investors wanted to join in the Petition after it was closed. It is accompanied by my report giving areas where the law could have been breached.
I hope that the relevant authority could pursue these areas and gather the evidence of the victims of these structured products that have now wiped out their lifetime savings. If the evidence found that there were misrepresentation, dishonesty or fraud, the authority should charge the parties involved in court for wrong doing. It is their duty to investigage and enforce the law.
However, if the misrepresentation was an honest mistake by the distributor or their sales representative, it would be better to give a chance for the distributor to offer an appropriate compensation to the investor. In my view, an appropriate compensation is to share half of the loss sufffered by the investor.
My second approach. I also encourage the investors to take find a lawyer to write a statutory declaration, which is sworn under oath, to describe the circumstance in which they invested in the structured product. The statutory declaration will cover the verbal assurances and explanation given by the distributor's sales representatives or the marketing materials that were provided to the investor, and the state of mind of the investor when they agreed to invest in the recommended structured product.
I hope that this statement is made under oath, which is made under oath, will have a stronger impact when it is lodged to support the complaint lodged with the distributor, or with the Financial Industry Dispute Resolution Center (Fidrec, www;fidrec.com.sg) at the next stage.
If there are many customers who make similar sworn statments regarding the verbal representations given to them (which turned out to be wrong), it is quite likely that any indepenent person, such as a judge, will believe the sworn statements made by these people, even if they do not have any written record to support their statements.
If the matter is not resolved, I will help them to take collective legal action. But it will have to be their decision, as this course of action is expensive and the outcome is uncertain.
A third approach is my appeal to the distributor and the MAS to come forward and do the ight thing. If they have made a mistake in approving or selling the product, they should admit the mistake and find an appropriate way to compensate the investors who have suffered a large financial loss due to the mistake. They should make it easier for the investor to get the compensation and not make them suffer more through a difficult, lenghty and costly process.
3. How would you gauge your success?
My aim is to help the investors to get appropriate compensation for the financial loss that they have suffered, due to the misrepresentation of the product. I suggest that the distributor should compensate the investor for half of the loss, so that the full loss is shared equally between the investor and the distributor.
I also hope that MAS will change their approach in the future. They should appoint independent financial experts to analyse thse structured financial products (including long term life insurance products) to ensure that they are designed to suit a certain category of investors, that they are described properly and clearly and that the product is fair to consumers. The products should not be designed for the main purpose of making profit for the issuer or the marketer at the expense or detriment of the investor or consumer.
I also hope to see a more active enforcement of the law to protect the interest of the retail investors or consumer. If there is breach of the law, the offenders should be charged in court and be made to pay a heavy penalty. This will ensure a higher standard of conduct and responsibility.
4. Your consumer activism is to be lauded. But what you are doing is something unusual in apathetic Singapore. You don't see ex-politicians or ex-CEOs going into this area. Have anybody warned you of the possible pitfalls of your action? If so, what did you tell them?
Reply: A few people have warned me to "be careful". People are so scared to do the right thing in Singapore. They are only willing to do what the Government approves for them to do. It is such a sad state of affairs. I hope that more people can come forward and be courageous.
5. Analysing your actions on this issue, I get the sense that you are pushing this into a high-profile campaign against MAS. You tried an on-line signature campaign, then face-to-face meeting with MAS, litigation and now the Speakers Corner. What kind of results are you looking at, from a good case scenario and a worst case scenario points of view?
Reply: I do not wish to offend the Monetary Authority of Singapore. I see that the MAS is the best party to step forward and help the retail investors. I believe that it is their duty to take care of the investing public, so as to preserve confidence in the financial system in Singapore. I wish to help MAS in this task. If MAS can be pro-active, I do not need to work so hard, day and night.
6. Do you think the authorities are listening to you and the people who are affected?
Reply: So far, they are listening selectively. I hope that more people can shout louder, so that their voices can be heard more clearly. I will help them to convey the message.
7. What would you say to people who feels you have an axe to grind with officialdom?
Reply: This represents maybe 5% of the people. These are the sceptical Singaporeans. The majority, perhaps the remainign 95%, encouraged me to do what is right, to help the people who are victims of the structured products.
8. Can you tell us your experiences with the investors you have met? What kind of people are they, what are some of the stories they have told you? Whose was the most tragic story?
Reply: Most of the investors are ordinary working class people who are careful, risk adverse and save the money for their retirement or their children's education. It is so sad to see their years of hard work and savings being lost due to some flaws in our financial system. These people are the victims. They cannot be expected to shoulder the entire loss. They should not be made to suffer more, by going through a difficult process to lodge their claim. I hope that their grievances can be dealt with in a fairer way.
9. There is a view that people should be responsible for their actions, that those who went into structured deposits are themselves to blame. Do you share this view?
Reply: It is the duty of a trusted party, such as the financial institution or its representative, to give the correct information to the people who rely on their advice. Clearly, the risk of the structured products have not been clearly understood by the financial institution at the point of sale. This has caused a lot of confusion and unclarity. The advertisements and brochures give a misleading picture. The prospectus is not clear. The investors were assured by the sales representatives that these structured products are safe. Can they be asked to shoulder the entire loss,because they trusted the financial institutions to give them proper information and recommendation?
Many of the investors are willing to shoulder their share of the loss, as these structured products offered a higher return. But, it is not fair for them to shoulder the entire loss.
10. There has been suggestions on Internet forums for you to run for President- in light of all your efforts- is this a proposition that you would consider seriously?
Reply: If your newspaper can get 100,000 people to sign a Petition for me to run as President of Singapore, I will consider it seriously.
Reply: For the past 18 months, after I retired from NTUC Income, I have been writing a blog to educate the general public about financial planning and insurance. My blog is www.tankinlian.blogspot.com. I wanted to educate them to make to make the right choice about financial and insurance products, so that they can get a reasonably good return on their savings.
I write several tips on various topics and kept them in my website, www.tankinlian.com/faq. They cover investments, insurance, financial planning and other topics of interest to young people, retirees, parents and other situations.
A year ago, many people asked me about structured products. The products sold a few years ago were the capital guaranteed products. I found that these products guaranteed the safety of the principal, but also guaranteed an extremely low return. I advised people against investing in these products. They can get a better return and more security by investing in government bonds. I was proven right - the investors got a poor return on these capital guaranteed products after waiting patiently for five years.
When the credit-linked securities (such as the minibonds and pinnacle notes) were launched two years ago, I studiend these products with the help of another expert in financial analysis. We concluded that the product is highly risky and give a poor return to the investor (which is not commensurate with the risk). It seemed that the financial institution took away the bulk of the return and leave the high risk to the investor. I advised investors to avoid these products in my blog.
At that time, I was not aware about the extent of the risk, as it was not easy to understand the complex structure, and the prospectus did not give the relevant information.
I do not know how the authority could have approved a prospectus that was supposed to describe the product, when financial experts who spent many hours to read the propectus could not figure out what the structure was. How can you expect the general public who were sold these products to understand the risk that they were taking?
When several of these credit linked securities (which were linked to Lehman Brothers as issuer or as a reference party) were at risk due to the failure of Lehman Brothers, I became horrified to learn the true nature of the structure and the extent of the high risk. I was horrified to learn that so many people were misled into investing their hard earned savings or lifetime savings in these products, often on misrepresentations of the financial institution representatives, or the relationship managers.
It is very clear that most of these investors are risk adverse. They were only trying to earn a higher interest rate to make up for the high inflation of 7%. It is unfair to label them as "being greedy" to get a higher return. If there were properly advised, they should be putting their money on government bonds to earn 3% per annum over 5 years.
I decided to organise a Petition to ask the Singapore Government, in particular the Monetary Authority of Singapore and/or the Commercial Affairs Department to investigate if any law has been broken, particularly section 27 of the Financial Advisers Act, section 199 of the Securities and Futures Act or the Trustees Act. I received 983 signatories who signed the Petition. I lodged the Petition with a report that shows the possible areas that the law has been breached, and presented my arguments to these points.
I was also disappointed at the approach taken by the MAS in handing the complaints. The poor investors were left to lodge their complaints with the financial institutions who sold the products to them. When they lodge their complaints, they were challenged or ridiculed (in some cases) by the officers employed by these financial institutions. It was quite discouraging to hear their stories.
The Hong Kong Monetary Authority adopted a better approach. They set up a hotline and service center and employed 100 people to record the complaints and investigate the cases where there were evidence of mis-selling. They received more than 7,000 complaints (which is 10 times of the number of complaints lodged with the financial institutions in Singapore). This is more satisfactory to the victims.
What is my motivation? Nearly ten thousand people have lost their hard earned savings or their life time savings by being misled into investing in these structured products. The sums involved are huge, $100,000, $200,000, $300,000 or more. Most of them come from modest backgrounds. The invested sums represent 10, 20 or 30 years of hard work and frugality. Should I just stand back and say "Bad luck. If you take risk you have to bear with the consequences. Let's move on? " These people are victims of mis-selling and are helpless in how to seek redress.
These investors were told that these products are safer than bank deposits. If you talk to these investors, you will know that they are clearly careful and risk adverse. It is not just a few people with the others trying to join in the ride. The stories told by most of them are similar.
My motivation is to help these victims who have suffered losses to seek appropriate compensation. I like to see justice - which is a core value in the five stars of Singapore.
2. In bringing up the concerns of the man-in-the-street to the authorities, what is your strategy?
The Petition asked the Singapore Government to make a full and independent investigations into the creation and the marketing of these products and identify the law that could have been breached. It is signed by 983 petitioners. Many investors wanted to join in the Petition after it was closed. It is accompanied by my report giving areas where the law could have been breached.
I hope that the relevant authority could pursue these areas and gather the evidence of the victims of these structured products that have now wiped out their lifetime savings. If the evidence found that there were misrepresentation, dishonesty or fraud, the authority should charge the parties involved in court for wrong doing. It is their duty to investigage and enforce the law.
However, if the misrepresentation was an honest mistake by the distributor or their sales representative, it would be better to give a chance for the distributor to offer an appropriate compensation to the investor. In my view, an appropriate compensation is to share half of the loss sufffered by the investor.
My second approach. I also encourage the investors to take find a lawyer to write a statutory declaration, which is sworn under oath, to describe the circumstance in which they invested in the structured product. The statutory declaration will cover the verbal assurances and explanation given by the distributor's sales representatives or the marketing materials that were provided to the investor, and the state of mind of the investor when they agreed to invest in the recommended structured product.
I hope that this statement is made under oath, which is made under oath, will have a stronger impact when it is lodged to support the complaint lodged with the distributor, or with the Financial Industry Dispute Resolution Center (Fidrec, www;fidrec.com.sg) at the next stage.
If there are many customers who make similar sworn statments regarding the verbal representations given to them (which turned out to be wrong), it is quite likely that any indepenent person, such as a judge, will believe the sworn statements made by these people, even if they do not have any written record to support their statements.
If the matter is not resolved, I will help them to take collective legal action. But it will have to be their decision, as this course of action is expensive and the outcome is uncertain.
A third approach is my appeal to the distributor and the MAS to come forward and do the ight thing. If they have made a mistake in approving or selling the product, they should admit the mistake and find an appropriate way to compensate the investors who have suffered a large financial loss due to the mistake. They should make it easier for the investor to get the compensation and not make them suffer more through a difficult, lenghty and costly process.
3. How would you gauge your success?
My aim is to help the investors to get appropriate compensation for the financial loss that they have suffered, due to the misrepresentation of the product. I suggest that the distributor should compensate the investor for half of the loss, so that the full loss is shared equally between the investor and the distributor.
I also hope that MAS will change their approach in the future. They should appoint independent financial experts to analyse thse structured financial products (including long term life insurance products) to ensure that they are designed to suit a certain category of investors, that they are described properly and clearly and that the product is fair to consumers. The products should not be designed for the main purpose of making profit for the issuer or the marketer at the expense or detriment of the investor or consumer.
I also hope to see a more active enforcement of the law to protect the interest of the retail investors or consumer. If there is breach of the law, the offenders should be charged in court and be made to pay a heavy penalty. This will ensure a higher standard of conduct and responsibility.
4. Your consumer activism is to be lauded. But what you are doing is something unusual in apathetic Singapore. You don't see ex-politicians or ex-CEOs going into this area. Have anybody warned you of the possible pitfalls of your action? If so, what did you tell them?
Reply: A few people have warned me to "be careful". People are so scared to do the right thing in Singapore. They are only willing to do what the Government approves for them to do. It is such a sad state of affairs. I hope that more people can come forward and be courageous.
5. Analysing your actions on this issue, I get the sense that you are pushing this into a high-profile campaign against MAS. You tried an on-line signature campaign, then face-to-face meeting with MAS, litigation and now the Speakers Corner. What kind of results are you looking at, from a good case scenario and a worst case scenario points of view?
Reply: I do not wish to offend the Monetary Authority of Singapore. I see that the MAS is the best party to step forward and help the retail investors. I believe that it is their duty to take care of the investing public, so as to preserve confidence in the financial system in Singapore. I wish to help MAS in this task. If MAS can be pro-active, I do not need to work so hard, day and night.
6. Do you think the authorities are listening to you and the people who are affected?
Reply: So far, they are listening selectively. I hope that more people can shout louder, so that their voices can be heard more clearly. I will help them to convey the message.
7. What would you say to people who feels you have an axe to grind with officialdom?
Reply: This represents maybe 5% of the people. These are the sceptical Singaporeans. The majority, perhaps the remainign 95%, encouraged me to do what is right, to help the people who are victims of the structured products.
8. Can you tell us your experiences with the investors you have met? What kind of people are they, what are some of the stories they have told you? Whose was the most tragic story?
Reply: Most of the investors are ordinary working class people who are careful, risk adverse and save the money for their retirement or their children's education. It is so sad to see their years of hard work and savings being lost due to some flaws in our financial system. These people are the victims. They cannot be expected to shoulder the entire loss. They should not be made to suffer more, by going through a difficult process to lodge their claim. I hope that their grievances can be dealt with in a fairer way.
9. There is a view that people should be responsible for their actions, that those who went into structured deposits are themselves to blame. Do you share this view?
Reply: It is the duty of a trusted party, such as the financial institution or its representative, to give the correct information to the people who rely on their advice. Clearly, the risk of the structured products have not been clearly understood by the financial institution at the point of sale. This has caused a lot of confusion and unclarity. The advertisements and brochures give a misleading picture. The prospectus is not clear. The investors were assured by the sales representatives that these structured products are safe. Can they be asked to shoulder the entire loss,because they trusted the financial institutions to give them proper information and recommendation?
Many of the investors are willing to shoulder their share of the loss, as these structured products offered a higher return. But, it is not fair for them to shoulder the entire loss.
10. There has been suggestions on Internet forums for you to run for President- in light of all your efforts- is this a proposition that you would consider seriously?
Reply: If your newspaper can get 100,000 people to sign a Petition for me to run as President of Singapore, I will consider it seriously.
MAS Media Release on Structured Products
Opening Remarks by Heng Swee Keat, Managing Director, MAS, at the MAS Press Conference on the Sale of Structured Products to Retail Investors
Many individuals who purchased structured products linked to Lehman Brothers are worried about their investments. MAS has been actively working to ensure a fair resolution for these investors. We have also been communicating our actions to the public since the issue first came to light in the middle of September. Our first priority has always been to help affected investors. Let me touch on what we have done and how we have put in place a serious and impartial resolution process to deal with investors’ legitimate concerns.
2. First, we are making sure that HSBC Institutional Trust Services (Singapore) Ltd, the trustee for the Lehman Minibond Programme, carefully considers all options and acts in the interests of investors. If a new swap counterparty is available, investors would have the opportunity to vote on this option. In order to assist investors make an informed decision, MAS will appoint an independent financial adviser. We expect the trustee to know whether options will be available to noteholders by the end of next week.
3. Second, each FI now has an independent person to oversee the complaints handling process relating to the sale of the Lehman Minibond Programme, DBS High Notes 5 and Merrill Lynch Jubilee Series 3 Linkearner Notes. These persons are Gerard Ee, Hwang Soo Jin and Law Song Keng. We recognise that the complaints handling process has not been easy, particularly for customers of some FIs. But as circumstances for each case may be different, this is the best way to deal with all the complaints. The independent parties will ensure that customers get a fair hearing. We have set a very clear timeline for complaints to be resolved. All the FIs have also set up internal review panels which are chaired by their CEOs. The panel is expected to conduct a thorough review of each complaint and decide on a course of action within four weeks. The decision will then be communicated to the customer.
4. Third, for affected investors who are not satisfied with the FIs decision on the matter, we have established a fast-track process to refer the case to the Financial Industry Disputes Resolution Centre (FIDReC). The FIDReC mediation process is free for consumers. If a case goes to arbitration, it will cost the consumer $50. FIDReC will consider all relevant evidence whether written or oral. Statements can be prepared by consumers themselves and need not be made under oath. All FIDReC’s adjudicators are well respected professionals. The chairman of FIDReC is Mr Goh Joon Seng, a retired High Court judge. As over 80% of customers invested S$50,000 and below, FIDReC is the right avenue for them to pursue their claims. FIDReC normally deals with claims not exceeding S$50,000. In the case of the structured products, however, the FIs have agreed for FIDReC to hear deserving cases.
5. We have also said that if there are breaches of our regulation, we will take action against the financial institution or individuals involved. MAS has required the independent parties to highlight these breaches and potential cases of mis-selling to MAS. They have already brought a number of possible cases to our attention and we are following up on them.
6. Normally, as you know, MAS does not comment on our dealings with individual institutions. However given public interest in this matter, MAS confirms that we have been conducting formal inquiries into allegations of breaches of the law, inadequate internal controls by the FIs or poor sales practices by their representatives. We will make an announcement on any actions we are taking when our inquiries are completed.
7. MAS urges any affected investor who has a genuine claim that you were mis-sold the product to make sure you lodge your complaint with your FIs. MAS requires FIs to have a rigorous process to look into every complaint and resolve them fairly, giving due weight to the views of the independent parties.
8. Clearly, there is a range of investors who bought these products. Some are well-educated professionals. Others are sophisticated investors. The group we are most concerned with are the vulnerable customers. We are focussing on cases of mis-selling to vulnerable customers and on cases where the products were clearly inappropriate for them given their circumstances. We have required the FIs to give priority to these cases. They should not take an overly legalistic approach to mis-selling in dealing with these cases.
9. For cases where there are sufficient indications that the product was mis-sold or that it was clearly inappropriate given the investor’s profile and circumstances, the FI should take responsibility. Several FIs have assured MAS that they will take full responsibility in such cases. We welcome this commitment and expect all FIs that have sold these products to take the same approach. They must do the right thing and ensure a quick and fair resolution for these customers. We have communicated this to their CEOs.
10. Thank you, I will now take your questions
Many individuals who purchased structured products linked to Lehman Brothers are worried about their investments. MAS has been actively working to ensure a fair resolution for these investors. We have also been communicating our actions to the public since the issue first came to light in the middle of September. Our first priority has always been to help affected investors. Let me touch on what we have done and how we have put in place a serious and impartial resolution process to deal with investors’ legitimate concerns.
2. First, we are making sure that HSBC Institutional Trust Services (Singapore) Ltd, the trustee for the Lehman Minibond Programme, carefully considers all options and acts in the interests of investors. If a new swap counterparty is available, investors would have the opportunity to vote on this option. In order to assist investors make an informed decision, MAS will appoint an independent financial adviser. We expect the trustee to know whether options will be available to noteholders by the end of next week.
3. Second, each FI now has an independent person to oversee the complaints handling process relating to the sale of the Lehman Minibond Programme, DBS High Notes 5 and Merrill Lynch Jubilee Series 3 Linkearner Notes. These persons are Gerard Ee, Hwang Soo Jin and Law Song Keng. We recognise that the complaints handling process has not been easy, particularly for customers of some FIs. But as circumstances for each case may be different, this is the best way to deal with all the complaints. The independent parties will ensure that customers get a fair hearing. We have set a very clear timeline for complaints to be resolved. All the FIs have also set up internal review panels which are chaired by their CEOs. The panel is expected to conduct a thorough review of each complaint and decide on a course of action within four weeks. The decision will then be communicated to the customer.
4. Third, for affected investors who are not satisfied with the FIs decision on the matter, we have established a fast-track process to refer the case to the Financial Industry Disputes Resolution Centre (FIDReC). The FIDReC mediation process is free for consumers. If a case goes to arbitration, it will cost the consumer $50. FIDReC will consider all relevant evidence whether written or oral. Statements can be prepared by consumers themselves and need not be made under oath. All FIDReC’s adjudicators are well respected professionals. The chairman of FIDReC is Mr Goh Joon Seng, a retired High Court judge. As over 80% of customers invested S$50,000 and below, FIDReC is the right avenue for them to pursue their claims. FIDReC normally deals with claims not exceeding S$50,000. In the case of the structured products, however, the FIs have agreed for FIDReC to hear deserving cases.
5. We have also said that if there are breaches of our regulation, we will take action against the financial institution or individuals involved. MAS has required the independent parties to highlight these breaches and potential cases of mis-selling to MAS. They have already brought a number of possible cases to our attention and we are following up on them.
6. Normally, as you know, MAS does not comment on our dealings with individual institutions. However given public interest in this matter, MAS confirms that we have been conducting formal inquiries into allegations of breaches of the law, inadequate internal controls by the FIs or poor sales practices by their representatives. We will make an announcement on any actions we are taking when our inquiries are completed.
7. MAS urges any affected investor who has a genuine claim that you were mis-sold the product to make sure you lodge your complaint with your FIs. MAS requires FIs to have a rigorous process to look into every complaint and resolve them fairly, giving due weight to the views of the independent parties.
8. Clearly, there is a range of investors who bought these products. Some are well-educated professionals. Others are sophisticated investors. The group we are most concerned with are the vulnerable customers. We are focussing on cases of mis-selling to vulnerable customers and on cases where the products were clearly inappropriate for them given their circumstances. We have required the FIs to give priority to these cases. They should not take an overly legalistic approach to mis-selling in dealing with these cases.
9. For cases where there are sufficient indications that the product was mis-sold or that it was clearly inappropriate given the investor’s profile and circumstances, the FI should take responsibility. Several FIs have assured MAS that they will take full responsibility in such cases. We welcome this commitment and expect all FIs that have sold these products to take the same approach. They must do the right thing and ensure a quick and fair resolution for these customers. We have communicated this to their CEOs.
10. Thank you, I will now take your questions
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