If you held a steady job for many years, and you hear that your company has to downsize, what do you do? If you are retrenched, how are you going to find a similar job in a difficult job market? How are you going to pay your bills?
If you have some savings to draw down for a few months or longer, you may be able to tide over the interim period before you find a new job. What if you do not have any savings?
You can pray that you will be spared. But what about your colleagues who are axed?
It is time for us to consider the need for unemployment insurance. If 10% of the workforce has to be axed, an unemployment insurance scheme should pay them, say, 50% of the previous earnings for a period of up to 12 or 24 months. The cost of the unemployment benefit should be paid by those who have jobs. It should cost about 2% to 3% of the payroll. It is a cost that is worth paying to spread the burden.
An alternative to unemployment insurance is a relief loan to pay the above sum to the retrenched workers. As this is a loan, it should be repaid in the future. Interest should be allowed to accumulate with the loan at the same rate paid by the Central Provident Fund.
I hope that an unemployment insurance or relief loan will be introduced by the Government soon, before more people face financial distress due to retrenchment.
Tan Kin Lian
Tuesday, April 7, 2009
AFP:Hong Kong watchdog slams brokerage in minibond scandal
5 Apr 2009
Hong Kong's securities watchdog has reprimanded a major brokerage for misselling controversial financial products backed by failed US giant Lehman Brothers, a spokesman said Sunday.
KGI Asia Ltd, which has more than 40,000 clients in Hong Kong, has agreed to repay 1.4 million Hong Kong dollars (180,000 US) to five people wrongly sold so-called "minibonds", the Securities and Futures Commission (SFC) said in a statement.
The minibonds have been at the centre of major scandal in the city, after they were sold to investors -- including many vulnerable retirees -- before their value collapsed when the US bank went bankrupt last September.
Following an investigation, the SFC found that KGI Asia had not adequately assessed the risk of the minibonds and that sales staff had not fully understood the products they were selling.
KGI Asia has agreed to fully refund the five clients, none of them professional investors, the SFC statement said. The brokerage has not admitted any liability.
"This outcome resolves our concerns about KGI's past sales practices in respect of Lehman Brothers minibonds, covers present losses incurred to their clients and provides assurance that these problems will not arise again in the future," said Mark Steward, the SFC's executive director of enforcement.
The move is the latest refund by a major financial firm in Hong Kong in the scandal, which has sparked multiple protests as investors claim they were sold the products on the understanding they were rock solid.
But legislators have complained that thousands of misselling cases have still not been dealt with by the regulators, and the firms that sold the products have been dragging their feet.
More than 40,000 Hong Kong investors had put a total of 15.7 billion Hong Kong dollars of their savings into minibonds and other complex products backed by the investment bank.
Former Wall Street icon Lehman Brothers collapsed in September under mountains of debt.
Hong Kong's securities watchdog has reprimanded a major brokerage for misselling controversial financial products backed by failed US giant Lehman Brothers, a spokesman said Sunday.
KGI Asia Ltd, which has more than 40,000 clients in Hong Kong, has agreed to repay 1.4 million Hong Kong dollars (180,000 US) to five people wrongly sold so-called "minibonds", the Securities and Futures Commission (SFC) said in a statement.
The minibonds have been at the centre of major scandal in the city, after they were sold to investors -- including many vulnerable retirees -- before their value collapsed when the US bank went bankrupt last September.
Following an investigation, the SFC found that KGI Asia had not adequately assessed the risk of the minibonds and that sales staff had not fully understood the products they were selling.
KGI Asia has agreed to fully refund the five clients, none of them professional investors, the SFC statement said. The brokerage has not admitted any liability.
"This outcome resolves our concerns about KGI's past sales practices in respect of Lehman Brothers minibonds, covers present losses incurred to their clients and provides assurance that these problems will not arise again in the future," said Mark Steward, the SFC's executive director of enforcement.
The move is the latest refund by a major financial firm in Hong Kong in the scandal, which has sparked multiple protests as investors claim they were sold the products on the understanding they were rock solid.
But legislators have complained that thousands of misselling cases have still not been dealt with by the regulators, and the firms that sold the products have been dragging their feet.
More than 40,000 Hong Kong investors had put a total of 15.7 billion Hong Kong dollars of their savings into minibonds and other complex products backed by the investment bank.
Former Wall Street icon Lehman Brothers collapsed in September under mountains of debt.
Thought for the day: Exploitation by the Elite
"The history of mankind is a history of the subjugation and exploitation of a great majority of people by an elite few by what has been appropriately termed the 'ruling class'. The ruling class has many manifestations. It can take the form of a religious orthodoxy, a monarchy, a dictatorship of the proletariat, outright fascism, or, in the case of the United States, corporate statism. In each instance the ruling class relies on academics, scholars and 'experts' to legitimize and provide moral authority for its hegemony over the masses." : Ed Crane
Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power: Benito Mussolini
Ho Cheow Seng
Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power: Benito Mussolini
Ho Cheow Seng
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