Investors compensated in Belgium?

Hi Kin Lian,

I'm a former lawyer from Singapore now residing in Brussels. I have closely followed the activities with regards to the Lehman Brothers saga in Singapore. I have attached an article from a news site in Belgium with regards to this matter to demonstrate how this matter is being handled over here. Keep up the good work.

Video link:
http://www.deredactie.be/cm/de.redactie.english/mediatheek_en/1.425647

Sat 29/11/08
Angry clients of Citibank and Deutsche Bank demonstrated in Brussels this afternoon. They first marched to the headquarters of Deutsche Bank in Brussels, and then to Citibank. The demonstrators are demanding compensation for the money they lost due to the bankruptcy of the American Lehman Brothers.

According to the Citibank and Deutsche Bank clients they had not been aware that there was a risk for their money as well when Lehman Brothers went bust. Apparently Citibank and Deutsche bank sold investments to their clients that were managed by Lehman Brothers. The clients say they were not informed of the risk. When the American bank went bankrupt, Belgian clients also lost their money. They want Deutsche Bank and Citibank to reimburse their loss in full. The pressure on Deutsche Bank and Citibank is rising especially because a number of other banks who had sold their clients Lehman Brothers investments such as Fortis, Ethias and Swiss Life have guaranteed the capital of their clients. In the meantime Deutsche Bank has said that there will be compensation for clients whose portfolios were composed largely of investments with Lehman Brothers.

A delegation of the demonstrators was received by Economy Minister Vincent Van Quickenborne. His inspection team also suspects deceit. Minister Van Quixkznborne: "Misleading advertising violates legislation on trade practices. The question is whether the people, when they bought these products, if they were properly informed about the possible risks.

There was talk of capital guarantee- 100% and it then it turned out that
1) it was a product that was not from the same bank they bought it from; and
2) afterwards it also turned out to be a bank that was vulnerable to problems."

Seek help from embassies

Dear Mr. Tan KL,

You have been advising the victims to seek the help of their respective MPs, but this is more suitable for citizens only. I doubt these MPs would bother about PRs/non-citizens when they are so indifferent towards their own citizens. Perhaps the non-citizens could try to seek the help from their respective embassy.

I'm really disappointed with the way X bank is handling the claims, very unfair, indifferent and high handed.

Things would be very different if it happens in M'sia. The press and the MPs, particularly the opposition will be assisting the helpless victims. The Malaysians just like the HK, Thais and Indonesia or even Filipino will fight for their rights and will not allow banks to cheat them of even RM$1 k not to mention S$100k!

Two months have passed and the banks and MAS are still so indifferent and ignore the plight and traumatic experience of the victims who have lost their hard-earned savings. It is sad that there is no compassion shown and instead abuses have been hurled at the helpless victims.

Notwithstanding the indifference shown by the relevant parties concerned and despite criticism and sarcastic remarks, you have out of compassion come out to do the right thing in helping the helpless victims, a true hero indeed.

I notice that some of the victims have lost faith, stamina after the heartless standard rejection letters. Please tell them not to give up and be more resilient and fight for your rights until they do the right thing i.e. compensate the victims their hard-earned savings of which they have been cheated!

tkh

Consumer speak against Opt Out Sales Tactics

Dear Mr. Tan,

I like to tell you about my personal experience concerning the practice of opt-out Sales Tactics.

Recently, I upgraded my mobile hand-phone with a leading local telecommunication provider.
I have been a loyal customer of this provider for more than 12 years and have been upgrading my phones at each regular cycle of 2 years.

This time round, I noticed that since the upgrading I have been receiving a barrage of SMS such as Gaming results, CNA news flash , ringtones etc.

After this recent financial fiasco, of which I am a victim of the MiniBond mis-selling, I am more wiser and call up the Service Provider hotline representative.

I was told these SMS messages form part of the upgrading contractual package and will be charged at $xxx after the 30th day from purchased date, unless I opt-out during this period.

Further, I was told by this representative that the Provider shop sales person has made this fact known to me during the sales. It was not made known to me ! Of course like the MInibond, I was made to sign some documents, which was quit routine like the previous upgrading I had.

I like to draw some parallel in this episode to the MiniBond selling procedure. Sales people did not disclosed all hidden costs and risks to their customer but only emphasis the unique selling point.

Mr Tan, I Fully support your efforts in educating the public and getting the authorities to review and investigate into the current selling procedures of these Institutions. These Institutions have become more profit focus and lose touch with their loyal customers (we placed too much trust in them) over the years.

In the name of efficiency, Institutions seems to heading this path of “Express Sales “ with fine prints embedded in the contract. Some Day our Life may also be opt-out !

Martho2008

REPLY
I suggest that you bring this matter to the Consumer Association of Singapore , www.case.org.sg. They will be able to act on this matter more effecitively than me.

Thoughts for the Day - Ho Cheow Seng

The form of law which I propose would be as follows: In a state which is desirous of being saved from the greatest of all plagues -- not faction, but rather distraction -- there should exist among the citizens neither extreme poverty nor, again, excessive wealth, for both are productive of great evil . . . Now the legislator should determine what is to be the limit of poverty or of wealth.": Plato (427-347 B.C.):

By 'distraction' Plato means that the 'citizens' are seduced by matters of no real importance so as to lose focus on issues that are crucial to their real well-being.

Appeal to the President of Singapore

Dear Mr. Tan,

The government is also not supportive to the investors, even sacrifice the Town Councils $16 millions. Shall we appeal to The President of Singapore?

We conduct another petition which include the age of the investors, the amount invested and also the % of the investment compare to all their saving. To include the age is to let every Singaporeans and especially the government knows that those who are above age of 45 may not have another 20 or 30 years to accumulate the same amount of saving again. The % is to show every Singaporeans and especially the government that how important these amount of money is to us.

The few ten thousands that we have invested, though this maybe some people 1 or 2 months salary or the few hundred thousands that we have invested, though this maybe just a peanut to some people, BUT they are all accumulated by us, cents by cents, over many years of hard work and sweats.

The situation now is seems to be only the top down instruction from MAS/Govt will make FIs to compensate. These CDOs related credit –linked investments amounted to billions, it is definitely very difficult for the FIs to settle the compensation by themselves. (There may be more products bust.)

The MAS should hold some responsibility (approving these products) and thus the government should step in.

LK

REPLY
I wish to invite volunteers to step forward and lead this project. I need volunteers who are convinced that this is worth the effort.

I will not be able to handle this additional project, as I already have too many things to do.

Legal action against the Issuers and Distributors

If the noteholders take legal action against the issuers and/or distributors of the credit linked notes and win the case, it is possible to get the contracts rescinded and the noteholders will receive a full refund of the invested money.

I heve spoken to several lawyers. They advised that the noteholders have a good case against the issuers and/or distributors on the following grounds:

1) There are possible misrepresentations, omissions and inconsistencies in the prospectus and pricing documents. Under the principle of "contract of adhesion", these inconsistencies will be interpreted against the financial institutions as they provided the legal wordings to the contracts.
2) The documents require more than 1 day to read and understand, even for an educated and financially savvy person. How is it possible for the securities to be sold over the counter to an ordinary layman withon one hour?

3) The actual risks of these securities clearly do not fit the risk profile of the people that are marketed to. This is sufficient grounds for the contracts to be rescinded.

I will be talking to two or three senior lawyers to go through the legal documents and the above arguments. If we find sufficient evidence, we can get the written opionion from a Queens Counsel or other suitable experts. This will strengthen the case and help to get the noteholders to join a class action.

I will find someone to fund the cost of the expert legal opinion, so that the noteholders do not need to wrry about this matter now. If the case proceed, those joining the class action can reimburse this cost.

I am still keen to avoid a costly legal battle and have a negotiated settlement with the financial institutions. I hope that they will come forward to offer a fair compensation to the notebolders, so that this matter does not need to be taken to the courts.

Clash of events at Speakers Corner on 29 November

Dear Mr. Tan,

Do you think that the Indian cultural event held on 29 November at Hong Lim Park was arranged to make it difficult for you to use Speaker's Corner?

REPLY

I do not think so. This type of event probably takes a few months to organise. If anyone is suspicious, perhaps you can check the facts for me.

It appears that Hong Lim Park is not used exclusively for Speaker's Corner. In the future, I will check if there are competing events on Saturdays. I am also considering to move my regular meeting at Speaker's Corner to Wednesday at 6 p.m. There is less likelihood of a clash of events during the weekdays.