http://www.pressdisplay.com/pressdisplay/showlink.aspx?bookmarkid=NUXNWDP32ZZ6&linkid=d95afe5e-d39c-4383-a4bc-8fd5ec04bb4d&pdaffid=8HM4kDzWViwfc7AqkYlqIQ%3d%3d
6 Nov 2008
Joyce Man
The Securities and Futures Commission will consider imposing a cooling-off period for investment contracts in light of the minibond debacle.
The move comes after some investors in complicated financial products complained that agents only provided crucial documents – which would have changed their investment decisions – after they had signed investment agreements.
“The SFC will consider whether the relevant sales contracts should contain a ‘cooling-off period’, during which investors may unconditionally terminate the contracts,” Secretary for Financial Services and the Treasury Chan Ka-keung said yesterday.
It would investigate the feasibility, merits and shortcomings of implementing a cooling-off period for other investment products, he said, without elaborating.
He was responding to legislator Raymond Ho Chung-tai, chairman of a Legislative Council subcommittee on Lehman minibonds and structured financial products, who wanted to know how the commission was educating small investors.
Andrew Fung Wai-kwong, a district councillor who has been helping investors complain to banks and demand compensation, said a coolingoff period would help them in future. “There is nowhere to run,” he said of the current arrangement, “and this would provide them with a way out.”
The commission is also considering more provisions for educating investors during the 2008-09 financial year.
From October 2006 to September this year, the commission produced 12 television programme episodes, broadcast 108 radio segments, published 130 newspaper articles, and issued 69 videos for broadcast on 1,000 buses, all containing educational messages for investors. It also organised 127 seminars and several university courses.
It has issued leaflets and brochures on stocks, funds, bonds, structured instruments and other products, with advice on how to choose brokers and investment advisers.
Since 1997, it has also provided investment information on television and radio, and organised quizzes and competitions to inform investors.
Wednesday, November 5, 2008
SCMP: Democrats drop legal bid after deal on Lehman products
http://www.pressdisplay.com/pressdisplay/showlink.aspx?bookmarkid=NUXNWDP32ZZ6&linkid=2ce84fa9-eda2-4ee1-8760-a6caf8dc01f8&pdaffid=8HM4kDzWViwfc7AqkYlqIQ%3d%3d
6 Nov 2008
Joyce Man
The Democratic Party has dropped plans to sue several banks over allegedly mis-sold derivative investments because the banks have settled with complainants.
Party chairman Albert Ho Chunyan had intended to file writs against the banks for six claimants, who had spent millions of dollars on investment products linked to collapsed investment bank Lehman Brothers. They reached settlements with the banks yesterday.
Standard Chartered said it had resolved “a few cases” since Tuesday, including at least one yesterday, and Bank of China (Hong Kong) resolved four new cases yesterday.
A 67-year-old woman with an 80year-old mother who needs money for surgery settled with Standard Chartered yesterday, Civic Party legislator Audrey Eu Yuet-mee said. The daughter had bought HK$500,000 in Lehman-related equity-linked notes.
A Standard Chartered spokeswoman said at least one case had been settled yesterday. She declined to disclose any details of the settlement or say whether the agreement was based on evidence of mis-selling, but said the bank was discussing settlements with elderly customers and those with little investment history.
Elsie Ho, a representative of the Standard Chartered complainants, said it was “ a positive step” and showed the bank was sincere. “Their senior management has always had a good attitude,” she said. “ They always responded to our requests, even if they sometimes were slow.”
Also yesterday, Bank of China (Hong Kong), which had earlier settled with two customers, reached settlements with four others. They were people in their 70s who had invested sums ranging from tens of thousands of dollars to more that HK$1 million in minibonds through the bank, a spokeswoman said.
Minibonds are not corporate bonds, but high-risk, credit-linked derivatives marketed as proxy investments in well-known companies.
DBS said payments to holders of two series of Constellation structured retail notes had been made on Friday.
The Hong Kong Monetary Authority said yesterday that banks should let customers who purchased Lehman investment products hear recordings of meetings with their agents. It said some banks had declined requests for the recordings from customers who purchased investment products from them.
“It is the view of the HKMA that as a matter of fair and responsible business practice, banks should allow customers to listen to the recordings of their telephone conversations with bank employees,” said the authority’s executive director of banking supervision, Nelson Man. He did not say, however, that customers had any right to the recordings.
The customers could be accompanied by a friend, relative or adviser or to take notes while listening to the recordings. Banks should provide investors and their advisers with information on the collateral underlying minibonds, he said.
The Securities and Futures Commission, which regulates brokerages, said investors had “no right to tape recordings unless through some compelled discovery process”, such as a lawsuit.
It said in a written reply to Ms Eu: “Usually firms that have tapes will play them for clients to resolve complaints, but this is a voluntary act and they do not always give the investors a copy of the relevant tape recording.”
6 Nov 2008
Joyce Man
The Democratic Party has dropped plans to sue several banks over allegedly mis-sold derivative investments because the banks have settled with complainants.
Party chairman Albert Ho Chunyan had intended to file writs against the banks for six claimants, who had spent millions of dollars on investment products linked to collapsed investment bank Lehman Brothers. They reached settlements with the banks yesterday.
Standard Chartered said it had resolved “a few cases” since Tuesday, including at least one yesterday, and Bank of China (Hong Kong) resolved four new cases yesterday.
A 67-year-old woman with an 80year-old mother who needs money for surgery settled with Standard Chartered yesterday, Civic Party legislator Audrey Eu Yuet-mee said. The daughter had bought HK$500,000 in Lehman-related equity-linked notes.
A Standard Chartered spokeswoman said at least one case had been settled yesterday. She declined to disclose any details of the settlement or say whether the agreement was based on evidence of mis-selling, but said the bank was discussing settlements with elderly customers and those with little investment history.
Elsie Ho, a representative of the Standard Chartered complainants, said it was “ a positive step” and showed the bank was sincere. “Their senior management has always had a good attitude,” she said. “ They always responded to our requests, even if they sometimes were slow.”
Also yesterday, Bank of China (Hong Kong), which had earlier settled with two customers, reached settlements with four others. They were people in their 70s who had invested sums ranging from tens of thousands of dollars to more that HK$1 million in minibonds through the bank, a spokeswoman said.
Minibonds are not corporate bonds, but high-risk, credit-linked derivatives marketed as proxy investments in well-known companies.
DBS said payments to holders of two series of Constellation structured retail notes had been made on Friday.
The Hong Kong Monetary Authority said yesterday that banks should let customers who purchased Lehman investment products hear recordings of meetings with their agents. It said some banks had declined requests for the recordings from customers who purchased investment products from them.
“It is the view of the HKMA that as a matter of fair and responsible business practice, banks should allow customers to listen to the recordings of their telephone conversations with bank employees,” said the authority’s executive director of banking supervision, Nelson Man. He did not say, however, that customers had any right to the recordings.
The customers could be accompanied by a friend, relative or adviser or to take notes while listening to the recordings. Banks should provide investors and their advisers with information on the collateral underlying minibonds, he said.
The Securities and Futures Commission, which regulates brokerages, said investors had “no right to tape recordings unless through some compelled discovery process”, such as a lawsuit.
It said in a written reply to Ms Eu: “Usually firms that have tapes will play them for clients to resolve complaints, but this is a voluntary act and they do not always give the investors a copy of the relevant tape recording.”
Is mis-selling a market misconduct?
In a speech made in 2002, Mr. Lee Hsien Loong, who was then chairman of Monetary Authority of Singapore said,
"Market discipline also requires an effective enforcement regime. To preserve investor confidence, penalties for transgressions must be swift and appropriate. MAS now has the power to investigate and bring a court action for market misconduct under the new civil penalty regime. This will complement the existing criminal penalty regime administered by CAD.”
Someone commented in my blog as follows:
"Alamak this market discipline referred to is not referring to mis-selling to auntie uncle and ah poh and ah kongs...is to prevent pple from insider trading leh...or market manipulation...but its a good step in the correct direction!! "
Is the mis-selling of mini-bonds and other credit linked notes considered a market misconduct? Was Mr Lee Hsien Loong referring only to market manipulation in 2002?
What do you think?
"Market discipline also requires an effective enforcement regime. To preserve investor confidence, penalties for transgressions must be swift and appropriate. MAS now has the power to investigate and bring a court action for market misconduct under the new civil penalty regime. This will complement the existing criminal penalty regime administered by CAD.”
Someone commented in my blog as follows:
"Alamak this market discipline referred to is not referring to mis-selling to auntie uncle and ah poh and ah kongs...is to prevent pple from insider trading leh...or market manipulation...but its a good step in the correct direction!! "
Is the mis-selling of mini-bonds and other credit linked notes considered a market misconduct? Was Mr Lee Hsien Loong referring only to market manipulation in 2002?
What do you think?
The New Paper: Latest structured product scandal
Tue, Nov 04, 2008
By Larry Haverkamp
SAY you have a persuasive friend named George. He promises a high return if you leave your money with him for five years.
Five years later, you get two shocks. First, your return is much less than promised. Then you learn George has been siphoning off your money, which explains the low returns.
You confront him. He is indignant. He won't even discuss the matter. Instead, he wants to talk about you. If you can prove you are old and uneducated, George will take pity and refund part of your money.
Hey! What does that have to do with anything?
You recall a similar story from America. Banks mis-sold auction-rate notes and were later required to repurchase a whopping $80 billion of them AND pay $750 million in fines.
Even the world's largest fund - Fidelity - agreed to buy back ALL the notes it sold to investors, regardless of their age or education.
Errors in auction-rate note sales were verbal. George's mis-selling can be backed up in black and white, or rather the lack of it.
Nowhere were his charges mentioned in the prospectus or any other documents. He simply took your money without telling you.
You guessed it. The story of George is about the latest banking scandal - a structured product, called credit and equity-linked notes or 'linked-notes' for short.
Over the past 10 years, sales of linked-notes have been in the billions. They have been in the news lately due to the 15 Sep bankruptcy of US investment banker Lehman Brothers.
Hardest hit have been High Notes 5 ($103m, a total loss), Jubilee 3 ($28m, a total loss) and Minibonds ($508m, a partial loss).
A feature common to ALL linked notes is that investors never see the charges. They include:
> costs embedded in the initial pricing;
> counter-party returns in the product's risk/return structure;
> commissions from buying and selling the options, swaps and underlying bonds;
> market-making and surrender fees; and
> annual management fees, including trailer fees kicked back to distributors.
They are deducted directly from the yield. Investors are likely to attribute the low return to market conditions rather than unseen costs.
Most importantly, unit trusts and investment-linked products (ILPs) routinely publish their charges. Linked notes never do.
THREE REMEDIES
The question of the day is: 'Should non-disclosure of embedded charges invalidate linked-note sales contracts and require a refund from issuers and distributors?'
Three remedies are possible.
1. THE BEST: Banks reimburse customers for the cost of the linked-notes plus accrued interest. It is similar to the remedy used in the case of auction-rate notes.
2. THE SECOND BEST: Banks limit reimbursement to money taken without customers' knowledge. It would amount to a refund of the undisclosed charges.
3. THE THIRD BEST: Banks simply reveal the undisclosed charges. It is a non-cash settlement, but at least investors would finally learn how much money was taken from their accounts.
By Larry Haverkamp
SAY you have a persuasive friend named George. He promises a high return if you leave your money with him for five years.
Five years later, you get two shocks. First, your return is much less than promised. Then you learn George has been siphoning off your money, which explains the low returns.
You confront him. He is indignant. He won't even discuss the matter. Instead, he wants to talk about you. If you can prove you are old and uneducated, George will take pity and refund part of your money.
Hey! What does that have to do with anything?
You recall a similar story from America. Banks mis-sold auction-rate notes and were later required to repurchase a whopping $80 billion of them AND pay $750 million in fines.
Even the world's largest fund - Fidelity - agreed to buy back ALL the notes it sold to investors, regardless of their age or education.
Errors in auction-rate note sales were verbal. George's mis-selling can be backed up in black and white, or rather the lack of it.
Nowhere were his charges mentioned in the prospectus or any other documents. He simply took your money without telling you.
You guessed it. The story of George is about the latest banking scandal - a structured product, called credit and equity-linked notes or 'linked-notes' for short.
Over the past 10 years, sales of linked-notes have been in the billions. They have been in the news lately due to the 15 Sep bankruptcy of US investment banker Lehman Brothers.
Hardest hit have been High Notes 5 ($103m, a total loss), Jubilee 3 ($28m, a total loss) and Minibonds ($508m, a partial loss).
A feature common to ALL linked notes is that investors never see the charges. They include:
> costs embedded in the initial pricing;
> counter-party returns in the product's risk/return structure;
> commissions from buying and selling the options, swaps and underlying bonds;
> market-making and surrender fees; and
> annual management fees, including trailer fees kicked back to distributors.
They are deducted directly from the yield. Investors are likely to attribute the low return to market conditions rather than unseen costs.
Most importantly, unit trusts and investment-linked products (ILPs) routinely publish their charges. Linked notes never do.
THREE REMEDIES
The question of the day is: 'Should non-disclosure of embedded charges invalidate linked-note sales contracts and require a refund from issuers and distributors?'
Three remedies are possible.
1. THE BEST: Banks reimburse customers for the cost of the linked-notes plus accrued interest. It is similar to the remedy used in the case of auction-rate notes.
2. THE SECOND BEST: Banks limit reimbursement to money taken without customers' knowledge. It would amount to a refund of the undisclosed charges.
3. THE THIRD BEST: Banks simply reveal the undisclosed charges. It is a non-cash settlement, but at least investors would finally learn how much money was taken from their accounts.
Business Times: Kudos to CIMB-GK and UOB-Kay Hian
By SIOW LI SEN
CIMB-GK and UOB-Kay Hian have broken ranks with the industry by offering to buy back in full the original Minibond investments from vulnerable investors, without deducting interest already earned.
By doing so, the two firms - one, Malaysian-owned, and the other, the broker arm of United Overseas Bank (UOB) - have done what just about every player in the financial services industry typically pays only lip service to and doesn't carry through: differentiating itself from the pack. CIMB-GK is owned by CIMB Group, Malaysia's second largest financial services group.
To recap, 10 distributors here sold failed Lehman Brothers-linked products worth a total of $639 million. They were ABN Amro Bank, DBS Bank, Maybank, Hong Leong Finance, CIMB-GK, DMG & Partners, Kim Eng, OCBC Securities, Phillip Securities and UOB-Kay Kian.
After some prodding from the regulator, DBS Bank, Maybank, Hong Leong Finance and four brokers said they would compensate vulnerable elderly investors (defined as those with not much education and little investment experience) the cost of their investments, minus the interest or coupons already paid. As for other investors, compensation would be decided on a case-by-case basis.
But CIMB-GK and UOB-Kay Hian said that, for vulnerable investors, they would buy back in full the original cost of their investment, irrespective of interest earned.
CIMB-GK chief executive Carol Fong explained the decision as 'appropriate, given the goodwill we have built among our customers'. A UOB-Kay Hian director told BT the company will also buy back the whole thing from the vulnerable group, with no deductions of interest already paid out.
Insiders said there had been quibbling among the distributors over the whole issue of compensation, such as who would qualify as vulnerable and the amount to be refunded.
The banks were said to have resisted going the full hog because they were the biggest parties in the whole affair.
But gouging back the interest paid seems rather petty, especially in view of the total amounts sold, and lost.
It is interesting that it is two brokers which are doing the right thing, rather than the big banks, which normally are seen as taking the lead.
Cynics will, of course, point to the fact that the amounts sold to vulnerable investors by these two brokers were small relative to the others. That could be because sales were done through their remisiers, who typically do have a more informed relationship with clients.
CIMB-GK disclosed that only less than 2 per cent of its total sales of $19 million of the Lehman-linked products or $380,000 were to vulnerable investors. UOB-KayHian said it sold less than $250,000 in value of these products to those considered vulnerable.
By contrast, DBS last month said that, based on the number of cases it reviewed, the bank estimates that total compensation in Singapore and Hong Kong is in the range of $70-80 million. This includes vulnerable customers and cases of mis-selling.
In all, DBS sold a total of $360 million of these failed products to 4,700 customers in Singapore and Hong Kong.
Matthew Wilson, a Morgan Stanley analyst, calculated that in basic financial terms, the amounts sold by DBS are immaterial to the bank's financials. Products sold amount to 13 per cent of its net profit for 2007, he said.
But the potential harm to the reputation of DBS is more serious and harder to calculate. As for Maybank and Hong Leong Finance - which are popular with locals here given that much of their branch networks are in the heartland areas - they too will have to work hard to rebuild trust.
On the other hand, CIMB-GK's gesture is not likely to be forgotten when its sister unit CIMB Islamic Bank launches Islamic banking in Singapore - targeting both the retail and business markets - over the next 12 months.
When the chips were down, and even though it may have been a small thing, CIMB-GK did it right. Ditto for UOB KayHian.
CIMB-GK and UOB-Kay Hian have broken ranks with the industry by offering to buy back in full the original Minibond investments from vulnerable investors, without deducting interest already earned.
By doing so, the two firms - one, Malaysian-owned, and the other, the broker arm of United Overseas Bank (UOB) - have done what just about every player in the financial services industry typically pays only lip service to and doesn't carry through: differentiating itself from the pack. CIMB-GK is owned by CIMB Group, Malaysia's second largest financial services group.
To recap, 10 distributors here sold failed Lehman Brothers-linked products worth a total of $639 million. They were ABN Amro Bank, DBS Bank, Maybank, Hong Leong Finance, CIMB-GK, DMG & Partners, Kim Eng, OCBC Securities, Phillip Securities and UOB-Kay Kian.
After some prodding from the regulator, DBS Bank, Maybank, Hong Leong Finance and four brokers said they would compensate vulnerable elderly investors (defined as those with not much education and little investment experience) the cost of their investments, minus the interest or coupons already paid. As for other investors, compensation would be decided on a case-by-case basis.
But CIMB-GK and UOB-Kay Hian said that, for vulnerable investors, they would buy back in full the original cost of their investment, irrespective of interest earned.
CIMB-GK chief executive Carol Fong explained the decision as 'appropriate, given the goodwill we have built among our customers'. A UOB-Kay Hian director told BT the company will also buy back the whole thing from the vulnerable group, with no deductions of interest already paid out.
Insiders said there had been quibbling among the distributors over the whole issue of compensation, such as who would qualify as vulnerable and the amount to be refunded.
The banks were said to have resisted going the full hog because they were the biggest parties in the whole affair.
But gouging back the interest paid seems rather petty, especially in view of the total amounts sold, and lost.
It is interesting that it is two brokers which are doing the right thing, rather than the big banks, which normally are seen as taking the lead.
Cynics will, of course, point to the fact that the amounts sold to vulnerable investors by these two brokers were small relative to the others. That could be because sales were done through their remisiers, who typically do have a more informed relationship with clients.
CIMB-GK disclosed that only less than 2 per cent of its total sales of $19 million of the Lehman-linked products or $380,000 were to vulnerable investors. UOB-KayHian said it sold less than $250,000 in value of these products to those considered vulnerable.
By contrast, DBS last month said that, based on the number of cases it reviewed, the bank estimates that total compensation in Singapore and Hong Kong is in the range of $70-80 million. This includes vulnerable customers and cases of mis-selling.
In all, DBS sold a total of $360 million of these failed products to 4,700 customers in Singapore and Hong Kong.
Matthew Wilson, a Morgan Stanley analyst, calculated that in basic financial terms, the amounts sold by DBS are immaterial to the bank's financials. Products sold amount to 13 per cent of its net profit for 2007, he said.
But the potential harm to the reputation of DBS is more serious and harder to calculate. As for Maybank and Hong Leong Finance - which are popular with locals here given that much of their branch networks are in the heartland areas - they too will have to work hard to rebuild trust.
On the other hand, CIMB-GK's gesture is not likely to be forgotten when its sister unit CIMB Islamic Bank launches Islamic banking in Singapore - targeting both the retail and business markets - over the next 12 months.
When the chips were down, and even though it may have been a small thing, CIMB-GK did it right. Ditto for UOB KayHian.
SCMP:Repairing the damage
http://www.pressdisplay.com.libproxy.nlb.gov.sg/pressdisplay/showlink.aspx?bookmarkid=DRY7OA3WU217&linkid=d102beba-e6ca-46db-b019-7f033156a5b0&pdaffid=8HM4kDzWViwfc7AqkYlqIQ%3d%3d
5 Nov 2008
Joseph Wong Wing-ping, formerly secretary for the civil service, is an adjunct professor at Chinese University of Hong Kong
Last Friday, the Hong Kong Monetary Authority (HKMA) announced it had made available mediation and arbitration services to help resolve compensation issues between investors in Lehman-related products and distributing banks. The Hong Kong International Arbitration Centre will provide the service. The HKMA will co-ordinate referrals.
So far, the HKMA has referred 72 cases to the Securities and Futures Commission (SFC). This number is expected to rise, given that of some 14,000 complaints received by the authority, only 37 have so far been found to be unsubstantiated.
More than 40,000 investors purchased Lehman products involving a total sum of about HK$15.6 billion. Most feel that the banks misled them on these "low-risk" products. Political parties have united to demand compensation from the banks. The matter has become political dynamite and a serious threat to social harmony. Yet, given the complexity of the issue, there is no sign of an early resolution.
To the government's credit, it has taken action. Apart from the offer of mediation and arbitration services, it has secured the banks' agreement to buy back the defunct Lehman products based on the value of the related collateral. The government has also pledged to provide unlimited financial support to the Consumer Council's Consumer Legal Action Fund, so it can take action against the banks where complaints are justified. The council has already selected some 50 cases for further analysis. But more needs to be done if the government wants to demonstrate compassion and fairness in handling the matter.
First, it should draw some lessons from what is happening in Singapore in handling the same problem. Like in Hong Kong, the Singaporean government has urged the distributing banks to discuss and, where appropriate, reach a settlement with clients. But it has gone further, by advising the banks to repay the principal amount in full to those investors aged above 62 (the official retirement age in Singapore) and with less than secondary-school education, on the grounds that these complicated products should not have been sold to them. In Hong Kong, thousands of poorly educated elderly people have lost substantial savings in the Lehman products.
They deserve our compassion and extra help from a government that has pledged to care for the elderly and disadvantaged. If the banks continue to play it by the book, our government should ask the Consumer Council to proceed with the legal cases involving the disadvantaged elderly with the utmost speed.
Second, the government should complete its own review of the respective roles of the SFC and HKMA as soon as possible. Pertinent questions need to be answered. For example, why were these products allowed to be sold to small investors when similar products were only available to institutional investors in the US? Why were they allowed to be named " minibonds " when our chief executive has remarked openly that he did not think they were genuine bonds? Did the HKMA exercise due diligence to regulate the banks? If so, why did the banks sell these products to so many less-educated elderly?
If the government was at fault, it would be better for the chief executive to admit it and make amends, rather than for the Legislative Council to come to the same conclusion after a tortuous investigation. Many people say that taxpayers' money should not be used to bail out losing investors. But, if the government was negligent in its duties, it owes the aggrieved parties an apology or even compensation.
Third, despite the availability of the mediation and arbitration service, the government should encourage the Consumer Council to select a full spectrum of cases, to ensure that the judgments can have a binding or guiding effect on other, similar cases.
Fourth, it is right to use public funds to uphold social justice. The Legal Aid Department handles many cases where the government is the respondent or defendant. The government should, therefore, make it clear that any legal cases taken up by the Consumer Legal Action Fund should not be so limited in scope as to exclude the possible liability of the HKMA and the SFC.
The disputes surrounding the Lehman products have all the attributes of a political storm that may blow some officials away in the government. The recent announcement by one bank that most of its Lehman-linked products are now worthless has driven more investors onto the streets. I am not hopeful that, when banks eventually announce the buy-back value of the minibonds , they will reduce the tension. I fear the opposite.
Many of the elderly buyers of Lehman products are exhausted, desperate and vulnerable. It is important for the government to seize the initiative and take further action; it risks paying a high price if it fails to do more promptly.
5 Nov 2008
Joseph Wong Wing-ping, formerly secretary for the civil service, is an adjunct professor at Chinese University of Hong Kong
Last Friday, the Hong Kong Monetary Authority (HKMA) announced it had made available mediation and arbitration services to help resolve compensation issues between investors in Lehman-related products and distributing banks. The Hong Kong International Arbitration Centre will provide the service. The HKMA will co-ordinate referrals.
So far, the HKMA has referred 72 cases to the Securities and Futures Commission (SFC). This number is expected to rise, given that of some 14,000 complaints received by the authority, only 37 have so far been found to be unsubstantiated.
More than 40,000 investors purchased Lehman products involving a total sum of about HK$15.6 billion. Most feel that the banks misled them on these "low-risk" products. Political parties have united to demand compensation from the banks. The matter has become political dynamite and a serious threat to social harmony. Yet, given the complexity of the issue, there is no sign of an early resolution.
To the government's credit, it has taken action. Apart from the offer of mediation and arbitration services, it has secured the banks' agreement to buy back the defunct Lehman products based on the value of the related collateral. The government has also pledged to provide unlimited financial support to the Consumer Council's Consumer Legal Action Fund, so it can take action against the banks where complaints are justified. The council has already selected some 50 cases for further analysis. But more needs to be done if the government wants to demonstrate compassion and fairness in handling the matter.
First, it should draw some lessons from what is happening in Singapore in handling the same problem. Like in Hong Kong, the Singaporean government has urged the distributing banks to discuss and, where appropriate, reach a settlement with clients. But it has gone further, by advising the banks to repay the principal amount in full to those investors aged above 62 (the official retirement age in Singapore) and with less than secondary-school education, on the grounds that these complicated products should not have been sold to them. In Hong Kong, thousands of poorly educated elderly people have lost substantial savings in the Lehman products.
They deserve our compassion and extra help from a government that has pledged to care for the elderly and disadvantaged. If the banks continue to play it by the book, our government should ask the Consumer Council to proceed with the legal cases involving the disadvantaged elderly with the utmost speed.
Second, the government should complete its own review of the respective roles of the SFC and HKMA as soon as possible. Pertinent questions need to be answered. For example, why were these products allowed to be sold to small investors when similar products were only available to institutional investors in the US? Why were they allowed to be named " minibonds " when our chief executive has remarked openly that he did not think they were genuine bonds? Did the HKMA exercise due diligence to regulate the banks? If so, why did the banks sell these products to so many less-educated elderly?
If the government was at fault, it would be better for the chief executive to admit it and make amends, rather than for the Legislative Council to come to the same conclusion after a tortuous investigation. Many people say that taxpayers' money should not be used to bail out losing investors. But, if the government was negligent in its duties, it owes the aggrieved parties an apology or even compensation.
Third, despite the availability of the mediation and arbitration service, the government should encourage the Consumer Council to select a full spectrum of cases, to ensure that the judgments can have a binding or guiding effect on other, similar cases.
Fourth, it is right to use public funds to uphold social justice. The Legal Aid Department handles many cases where the government is the respondent or defendant. The government should, therefore, make it clear that any legal cases taken up by the Consumer Legal Action Fund should not be so limited in scope as to exclude the possible liability of the HKMA and the SFC.
The disputes surrounding the Lehman products have all the attributes of a political storm that may blow some officials away in the government. The recent announcement by one bank that most of its Lehman-linked products are now worthless has driven more investors onto the streets. I am not hopeful that, when banks eventually announce the buy-back value of the minibonds , they will reduce the tension. I fear the opposite.
Many of the elderly buyers of Lehman products are exhausted, desperate and vulnerable. It is important for the government to seize the initiative and take further action; it risks paying a high price if it fails to do more promptly.
US Presidential Election 2008
Lessons for Singapore:
respecting the will of the people and working together as one
Transcript Of Barack Obama's Victory Speech
Listen: Obama's Victory Speech
http://www.npr.org/templates/story/story.php?storyId=96624326&ft=1&f=1001
Transcript Of John McCain's Concession Speech
Listen: McCain's Concession Speech
http://www.npr.org/templates/story/story.php?storyId=96631784
respecting the will of the people and working together as one
Transcript Of Barack Obama's Victory Speech
Listen: Obama's Victory Speech
http://www.npr.org/templates/story/story.php?storyId=96624326&ft=1&f=1001
Transcript Of John McCain's Concession Speech
Listen: McCain's Concession Speech
http://www.npr.org/templates/story/story.php?storyId=96631784
Advancing the best interest of our people
Contributed by Ho Cheow Seng
My Fellow Countrymen,
We, the Citizens of Singapore, are the best judge of what system of governance suits our Nation best in terms of advancing the well-being of our people. And no, we should not be so arrogant as not to want to look closely at other successful systems of governance with a view to adapting aspects of those systems to our benefit. Only that we need to be well-informed about why such and such a system has worked so well for such and such a country or countries.
The observation has been made that it is those countries in the West, who were former colonisers of countries in Asia, and who robbed lands belonging to others, suppressing the native inhabitants of the lands they conquered, and stealing their valuable resources to fuel the industrialization of the 'Great White Lord's
motherland, who now condescendingly want to teach us how to govern ourselves following their model wholesale.
These were also the countries that once lorded over the great ancient civilization of India, and who also derided China [another great ancient civilization] as the 'sick man of Asia. And these were also the nations that, at the height of their imperialism, imposed, by sheer brute force, the 'right' of extra-territoriality upon the countries they had subjected. And now, lo and behold, they are crusading for Freedom and Human Rights in their former colonies as well as the other countries of Asia.
Have you ever wondered why no Asian countries have ever tried to preach to countries in the West about our Asian values and way of life? Do remember that it was the great Asian and Middle-Eastern nations that gave the world the first great inventions in the various fields of human activities? As the current Chinese Premier Wen Jie-Bao once said in his address to the Chinese People's Congress:"Why should the U.S. and the West be afraid of China's economic re-surgence?" He went on to say that history has shown that China had never harboured any imperialistic ambition and had not occupied an inch of anyone's territory.
And so the West, and in particular the U.S., want now to teach us how to run our countries according to their model of Democracy. Beware of their pulling cotton wool over our eyes. Do you seriously believe there is genuine Freedom and practice of Human Rights in America? May I refer you to Noam Chomsky's "Manufacturing Consent" commenting on the 'eponymous efforts' of the rival political factions in engineering support for their partisan and provincial causes in America where Chomsky is both a citizen and one of its most brilliant thinkers and incisive critics of the American Democracy as well as of the American obssession with Human Rights to the point of being ridiculous in not a few instances.
You know the term 'cultural bananas'? To give you some clue, a banana is yellow outside and white inside. And 'cultural bananas' is the term the great white lords used to pour scorn on the 'Westernized Asians' who were bold enough to speak up to them.
Why do we allow ourselves to be treated this way? Have we no self-respect or do we totally lack the ability to think for ourselves that we should sink so low as to be devotees of everything 'white' and Western? Given our colonial history, many of our citizens are anglophones. This is perfectly fine especially as we are a muti-racial society and we need a common language to facilitate transactions both social and economic among our various ethnic groups.
But please, please, don't ever fall into the trap of taking that one further step to become an 'anglophile' in the misguided believe that THAT would enhance your standing in the eyes of your countrymen and also of the 'great white lords'. If at all, you will in all likelihood be despised.
The late Mahatma Ghandhi once penned a few verses to show his disgust for the Indian worshippers of Western Western culture. He wrote about them in the following vein:
Discarded by the West
And despised by the East,
They stand as living monuments
Of Western adultery.
By 'Western adultery' the Mahatma may be referring to the adulteration of Indian [and likewise Asian] culture by the Western culture. So don't be sold on Western Democracy and Human Rights. Right up to the second half of the 20th Century, Afro-Americans were still fighting their white counterparts to be accorded equal rights. In 1964 [date stands to be corrected] the late Martin Luther King Jr. had this to say:
"I have a dream that the day will come when the children of black slaves and the children of former black-slave owners will sit together at the table of brotherhood."
ML King Jr. may well be more than surprized should he be alive today to witness the very real likelihood of an Afro-American, a coloured man [strange that they don't consider 'white' to be a colour. Perhaps to be white is to be colourless] ascending to the highest post in 'the Land of the brave and the free'; the post, that is to say, of the President of the United States of America.
For all Afro-Americans and all coloured peoples of the world, indeed the wheel has come full circle.
Maju-lah Singapura!
Ho Cheow Seng
"Apparently, a democracy is a place where numerous elections are held at great cost without issues and with interchangeable candidates." - Gore Vidal:
"There are times in politics when you must be on the right side and lose." - John Kenneth Galbraith:
My Fellow Countrymen,
We, the Citizens of Singapore, are the best judge of what system of governance suits our Nation best in terms of advancing the well-being of our people. And no, we should not be so arrogant as not to want to look closely at other successful systems of governance with a view to adapting aspects of those systems to our benefit. Only that we need to be well-informed about why such and such a system has worked so well for such and such a country or countries.
The observation has been made that it is those countries in the West, who were former colonisers of countries in Asia, and who robbed lands belonging to others, suppressing the native inhabitants of the lands they conquered, and stealing their valuable resources to fuel the industrialization of the 'Great White Lord's
motherland, who now condescendingly want to teach us how to govern ourselves following their model wholesale.
These were also the countries that once lorded over the great ancient civilization of India, and who also derided China [another great ancient civilization] as the 'sick man of Asia. And these were also the nations that, at the height of their imperialism, imposed, by sheer brute force, the 'right' of extra-territoriality upon the countries they had subjected. And now, lo and behold, they are crusading for Freedom and Human Rights in their former colonies as well as the other countries of Asia.
Have you ever wondered why no Asian countries have ever tried to preach to countries in the West about our Asian values and way of life? Do remember that it was the great Asian and Middle-Eastern nations that gave the world the first great inventions in the various fields of human activities? As the current Chinese Premier Wen Jie-Bao once said in his address to the Chinese People's Congress:"Why should the U.S. and the West be afraid of China's economic re-surgence?" He went on to say that history has shown that China had never harboured any imperialistic ambition and had not occupied an inch of anyone's territory.
And so the West, and in particular the U.S., want now to teach us how to run our countries according to their model of Democracy. Beware of their pulling cotton wool over our eyes. Do you seriously believe there is genuine Freedom and practice of Human Rights in America? May I refer you to Noam Chomsky's "Manufacturing Consent" commenting on the 'eponymous efforts' of the rival political factions in engineering support for their partisan and provincial causes in America where Chomsky is both a citizen and one of its most brilliant thinkers and incisive critics of the American Democracy as well as of the American obssession with Human Rights to the point of being ridiculous in not a few instances.
You know the term 'cultural bananas'? To give you some clue, a banana is yellow outside and white inside. And 'cultural bananas' is the term the great white lords used to pour scorn on the 'Westernized Asians' who were bold enough to speak up to them.
Why do we allow ourselves to be treated this way? Have we no self-respect or do we totally lack the ability to think for ourselves that we should sink so low as to be devotees of everything 'white' and Western? Given our colonial history, many of our citizens are anglophones. This is perfectly fine especially as we are a muti-racial society and we need a common language to facilitate transactions both social and economic among our various ethnic groups.
But please, please, don't ever fall into the trap of taking that one further step to become an 'anglophile' in the misguided believe that THAT would enhance your standing in the eyes of your countrymen and also of the 'great white lords'. If at all, you will in all likelihood be despised.
The late Mahatma Ghandhi once penned a few verses to show his disgust for the Indian worshippers of Western Western culture. He wrote about them in the following vein:
Discarded by the West
And despised by the East,
They stand as living monuments
Of Western adultery.
By 'Western adultery' the Mahatma may be referring to the adulteration of Indian [and likewise Asian] culture by the Western culture. So don't be sold on Western Democracy and Human Rights. Right up to the second half of the 20th Century, Afro-Americans were still fighting their white counterparts to be accorded equal rights. In 1964 [date stands to be corrected] the late Martin Luther King Jr. had this to say:
"I have a dream that the day will come when the children of black slaves and the children of former black-slave owners will sit together at the table of brotherhood."
ML King Jr. may well be more than surprized should he be alive today to witness the very real likelihood of an Afro-American, a coloured man [strange that they don't consider 'white' to be a colour. Perhaps to be white is to be colourless] ascending to the highest post in 'the Land of the brave and the free'; the post, that is to say, of the President of the United States of America.
For all Afro-Americans and all coloured peoples of the world, indeed the wheel has come full circle.
Maju-lah Singapura!
Ho Cheow Seng
"Apparently, a democracy is a place where numerous elections are held at great cost without issues and with interchangeable candidates." - Gore Vidal:
"There are times in politics when you must be on the right side and lose." - John Kenneth Galbraith:
Subscribe to:
Posts (Atom)