This letter has been sent to Straits Times, Today and Zaobao.
Editor
Forum Page
Straits Times
Eight town councils have invested a combined sum of about $16 million in the credit-linked notes, including the minibonds, pinnacle notes, high notes and jubilee notes. Some of these notes are worthless. Others have lost a large part of their value.
The funds of these town councils belong to the residents who pay the conservancy charges. The town councils have the fiduciary duty to invest these funds carefully.
I suggest that the town councils explain if, when making the investment, they were aware that the credit linked notes carry the risk of the entire loss of the principal on a credit event involving any one of 5 to 8 reference entities, and the additional risks of the defaults of a certain number of 100 to 150 underlying assets, cormprising of collateralised debt obligations, subprime mortgages and other risky products?
Were the town councils aware that the risks of these credit linked notes are many times of the risk of default of a single entity? Does the return of around 5% commensurate with this high risk?
Were the town councils misled by the financial adviser who sold the notes or by the mis-representation contained in the sales materials or prospectus. If this is the case, I suggest that the town councils should take a legal case against the distributor for their negligence or bad advice and to seek fair compensation for their losses.
As the sums involved are quite large, the town councils should take the appropriate action to discharge their fiduciary duty to the residents.
If the town councils succeed in their action, the outcome will indirectly benefit over 10,000 helpless individuals who were also misled into investing in these credit linked notes.
Tan Kin Lian
Tuesday, November 18, 2008
CPF Medishield
Dear Mr. Tan,
I'm thinking of buying a health insurance but in the market there is so many health insurance. Could you recommend me one company that is providing the best health insurance?
I will be out of job soon, as my company is moving its operations to another country. I'm now 35 years old.
REPLY
I recommend CPF Medishield. As you will be losing a job, there is no need to spend so much money on a private Shield plan.
I'm thinking of buying a health insurance but in the market there is so many health insurance. Could you recommend me one company that is providing the best health insurance?
I will be out of job soon, as my company is moving its operations to another country. I'm now 35 years old.
REPLY
I recommend CPF Medishield. As you will be losing a job, there is no need to spend so much money on a private Shield plan.
Ask MAS to provide guidelines on mis-selling
Dear Mr. Tan
Can you help to lobby MAS to come out with some guidelines on mis-selling. That will help ordinary man a lot.
For examples MAS can say the following situations are high likelihood of mis-selling.
1. Sold product the buyer not originally wanted
2. Concluded sale (such a complicated product) within 30 mins
3. Sold without going through line by line of the marketing brochure
4. Sold without giving prospectus
5. Prospectus was given after sale concluded
6. Sold on repetition of the Reference Entities but did not mention RISK of other link products (just mentioning link is not enough)
7. RM did not read prospectus before selling to the clients
I think you expect your doctor to read the details of the drugs before prescribing it to you or children? I just think that it is not right to sell by mis-representation, but eliminate their responsibility by thick documentation.
LKH
REPLY
I will post your views in my blog first. I will decide later on how to approach MAS.
Can you help to lobby MAS to come out with some guidelines on mis-selling. That will help ordinary man a lot.
For examples MAS can say the following situations are high likelihood of mis-selling.
1. Sold product the buyer not originally wanted
2. Concluded sale (such a complicated product) within 30 mins
3. Sold without going through line by line of the marketing brochure
4. Sold without giving prospectus
5. Prospectus was given after sale concluded
6. Sold on repetition of the Reference Entities but did not mention RISK of other link products (just mentioning link is not enough)
7. RM did not read prospectus before selling to the clients
I think you expect your doctor to read the details of the drugs before prescribing it to you or children? I just think that it is not right to sell by mis-representation, but eliminate their responsibility by thick documentation.
LKH
REPLY
I will post your views in my blog first. I will decide later on how to approach MAS.
A doctor's definition of caveat emptor
Read this letter:
http://www.straitstimes.com/ST%2BForum/Story/STIStory_304035.html
The doctor said nothing about "eyes opened" or "eyes closed" or "greedy investors".
http://www.straitstimes.com/ST%2BForum/Story/STIStory_304035.html
The doctor said nothing about "eyes opened" or "eyes closed" or "greedy investors".
Reply to Chua Sheng Yang
Chua Sheng Yang's letter:
http://www.straitstimes.com/ST%2BForum/Story/STIStory_303479.html
18 November 2008
The Editor
Forum Page
Straits Times
I refer to the letter entitled “Questions on investment products rally” by Chua Sheng Yang (Straits Times, 18 Nov 2008).
I organize the fifth rally on 15 November for the purpose of updating the investors on the status of the three petitions that were sent to the Monetary Authority of Singapore. The text of my speech can be found in my blog, www.tankinlian.blogspot.com.
I did not organize the rally for the purpose of promoting The Online Citizen, as suggested by Mr. Chua.
I do wish to acknowledge the coverage given by The Online Citizen and other online blogs. They help to bring my messages to the investors who were not able to attend the events at Speaker’s Corner.
The first petition, signed by 983 investors and submitted on 9 October 2008, asked the Government to carry out an independent investigation to find out if there were any wrong doings by the financial institutions that created and marketed these credit linked securities and, if there were, to take appropriate action under the law. Specifically, the investigation should look at possible breaches under section 199 of the Securities and Futures Act and section 27 of the Financial Adviser’s Act.
Mr. Chua asked me to state if the people, who are neither elderly nor uneducated, should be entitled to their money back. In my view, all investors who have been misled into these securities through mis-representation and mis-selling (if proven by the findings) should be fairly compensated, regardless of their age and educational level.
I do not expect the Government to reimburse the investors for the financial loss. I only urge the Government to help the investors to get fair compensation for their loss from the financial institutions. I do not expect the compensation to be in full, as the investors have to bear some responsibility.
Several articles, written by journalists and university professors, have been printed in the newspapers explaining the high risk of these securities and how the investors could have been misled. I wonder why people like Mr. Chua choose to ignore them. I can only recall the saying, “None are so blind as those who will not see the truth”.
Mr. Chua made a personal attack on my character in the last three paragraphs of his letter. I am surprised that your newspaper found it fit to print these unsubstantiated remarks, as they are not relevant to the main issue. I shall not respond to them.
Tan Kin Lian
http://www.straitstimes.com/ST%2BForum/Story/STIStory_303479.html
18 November 2008
The Editor
Forum Page
Straits Times
I refer to the letter entitled “Questions on investment products rally” by Chua Sheng Yang (Straits Times, 18 Nov 2008).
I organize the fifth rally on 15 November for the purpose of updating the investors on the status of the three petitions that were sent to the Monetary Authority of Singapore. The text of my speech can be found in my blog, www.tankinlian.blogspot.com.
I did not organize the rally for the purpose of promoting The Online Citizen, as suggested by Mr. Chua.
I do wish to acknowledge the coverage given by The Online Citizen and other online blogs. They help to bring my messages to the investors who were not able to attend the events at Speaker’s Corner.
The first petition, signed by 983 investors and submitted on 9 October 2008, asked the Government to carry out an independent investigation to find out if there were any wrong doings by the financial institutions that created and marketed these credit linked securities and, if there were, to take appropriate action under the law. Specifically, the investigation should look at possible breaches under section 199 of the Securities and Futures Act and section 27 of the Financial Adviser’s Act.
Mr. Chua asked me to state if the people, who are neither elderly nor uneducated, should be entitled to their money back. In my view, all investors who have been misled into these securities through mis-representation and mis-selling (if proven by the findings) should be fairly compensated, regardless of their age and educational level.
I do not expect the Government to reimburse the investors for the financial loss. I only urge the Government to help the investors to get fair compensation for their loss from the financial institutions. I do not expect the compensation to be in full, as the investors have to bear some responsibility.
Several articles, written by journalists and university professors, have been printed in the newspapers explaining the high risk of these securities and how the investors could have been misled. I wonder why people like Mr. Chua choose to ignore them. I can only recall the saying, “None are so blind as those who will not see the truth”.
Mr. Chua made a personal attack on my character in the last three paragraphs of his letter. I am surprised that your newspaper found it fit to print these unsubstantiated remarks, as they are not relevant to the main issue. I shall not respond to them.
Tan Kin Lian
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