TOC interviews some people who turned up at Hong Lim Park, including some investors of structured products.
Update: TOC has been informed that some investors are planning a sit-in protest at DBS’ Shenton Way office building this Wednesday at 10am.
“MAS should do what’s right”, says former NTUC Income chief, Tan Kin Lian, at Speakers’ Corner event which saw more than 1,000 people turn up.
Koh Yi Na
Former NTUC Income Chief Executive, Mr Tan Kin Lian, addressed a crowd of more than 1000 people at Speaker’s Corner in Hong Lim Park yesterday, speaking out for investors who were affected by the recent credit crisis and the loss of their savings invested in financial structured products.
Speaking to a crowd of rather bewildered Singaporean investors, many of whom had lost substantial portions of their life savings, Mr Tan made several proposals for them to seek some form of redress, one of which was a suggestion to organize themselves into groups where investors facing similar predicaments could discuss their respective financial situations and help each other out.
Following Mr Tan’s 10 minute long speech, financial planner and author Mr Leong Sze Hian, took to the stage, and spoke of the importance of diversifying one’s assets. He further explained the maxim “don’t understand, don’t invest”, and advised people to read the fine print on investment documents they signed.
The latter part of Mr Leong’s speech, which was delivered in Mandarin, was welcomed enthusiastically by the largely Mandarin-speaking crowd, largely consisting of middle-aged Singaporeans and retirees, many of whom came with their spouses, children and grandchildren. There were also a number of families and young couples present, all seeking a way to recoup the losses they had incurred, or at the very least, to find someone to explain the situation to them.
Many of the people that The Online Citizen (TOC) spoke to declined to be named, but the frustration, confusion and grief was nonetheless apparent when they spoke on the condition of anonymity. “We didn’t know that our money was going to investment banks,” one man in his 50s told us. “We thought all along that it was just like fixed deposits, very safe, but with a high interest rate. The bank representatives never told us that we could stand to lose so much, just like that.”
Financial structured products – low risk, high returns?
The entire affair began when local banks began offering credit-linked securities in the form of financial structured products, backed by investment bank Lehman Brothers. These structured products included Lehman Minibonds, DBS High Notes 5, Morgan Stanley Pinnacles Notes and Merrill Lynch Jubilee Series 3 LinkEarner Notes.
When Lehman Brothers filed for bankruptcy in September, Singaporeans, who had bought the structured products with the notion that they were low-risk, high returns investments resembling fixed deposits, found their hard-earned savings gone altogether. Unknown to many of them, the banks reserved the right to forfeit their principal payments should the investment banks fall, and fall they did. These investors found themselves missing thousands, and at times, tens of thousands of dollars, money that had been intended for their children’s educations or their retirement funds.
On 9 October, Mr Tan approached the Monetary Authority of Singapore (MAS), the governing authority for banks in Singapore, with a petition bearing 983 signatures, addressed to Senior Minister Goh Chok Tong, chairman of MAS. These signatures were gathered from individuals who had encountered the petition on his blog.
The petition appealed for MAS’ assurance that those who had invested in such financial products were not victims of misrepresentation or fraud by these financial institutions, and requested MAS to commence a full and independent inquiry into the sale of structured products by various financial institutions in Singapore. It also asked MAS to help the investors claim adequate compensation for their losses, caused by the misconduct of the banks offering structured products without providing sufficient information.
The event at Speaker’s Corner was meant as a gathering ground for investors who had suffered losses to voice their concerns and seek some form of relief. After the speeches by Mr Tan and Mr Leong at 5pm, investors huddled under various placards bearing titles such as “Pinnacle notes”, “Minibonds”, “High notes”, and “Jubilee notes and others” to discuss the proposals suggested by both speakers.
Redress and recourse
One of these was Mr Tan’s offer of an arrangement he had made with a lawyer for affected investors to make a sworn statement regarding the investment in the structured product, which could later be used to support investors’ complaint to their respective financial institutions and with the Financial Industry Dispute Resolution Center, or FIDREC. References were also made to a potential second petition, and particulars of investors were collected.
At 6pm, Mr Tan repeated his speech for the benefit of those who were unable to hear him the first time round because of the size of the crowd and the limited audio reach of the self-powered amplifier.
For the two to three hours that the event lasted, the field was flooded with people, undoubtedly the most that Speaker’s Corner has seen since it opened in 2001. Many looked lost as they tugged along entire families, and some approached strangers with sheets of paper, on which were written their structured products, banks and the amount of money they had spent on these investments. A substantial number of these were retirees who spoke little or no English, and had not understood the speeches, nor been able to access Mr Tan’s website and the advice located there.
Several passersby and onlookers milled around, listening in on groups of people, or discussing the credit market and structured products among themselves. One middle-aged man told TOC, “I didn’t lose any money from this, but I know some people who have lost their entire life savings, hundreds of thousands.” It was a sentiment that was echoed repeatedly around the field, as scenes of retirees, thirty-somethings and middle-aged Singaporeans breaking down into tears and pleading for help from Mr Tan or Mr Leong were seen.
Expectations of MAS’ actions
TOC met up with Mr Tan towards the end of the event, and asked him what he felt MAS could realistically do to help the investors. A direct answer was not provided, but what he said perhaps captured what most people could hope for: “…The government, MAS, should do what’s right. After all, these people have put their blood, sweat and tears into their jobs, only to lose it all at once.”
At the end of the event, a man in his 60s caught up with us, saying that he did not mind being caught on tape and having the tape aired on the Internet. “We spent our whole lives building up this country from scratch,” he said. “We worked for thirty, forty years, and we saved all our money to put into the bank. More than one hundred thousand dollars, over all these decades.
“Then they got greedy, and they decided to invest all our life savings into companies like Lehman Brothers. And now, we’re the ones who have to pay, because they’re not doing anything for us. We spent our whole lives working for this country, and now our money is gone.”
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You can view the videos of Mr Tan and Mr Leong’s speeches here.
Read also news agencies’ reports:
Irate investors rally in Singapore – AFP.
Angry Lehman investors hold public meeting in Singapore – Reuters.
Singapore investors decry losses from Lehman bonds – International Herald Tribune.
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Pictures by Damien Chng and sj.
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About Koh Yi Na (written report):
Yi Na is a Year 1 Arts student in Junior College. She is involved in debates and fencing, and enjoys reading and writing whenever possible. She would like to see more online platforms like TOC as an alternative voice to the mainstream media, and she believes that change in Singapore is inevitable.
About Teng Jing Wei (video interviewer):
Jingwei is a Year 1 Arts student in Junior College with varied interests. She hopes to study finance and economics at a tertiary level. She is grateful for the opportunities TOC gives her to pursue her deep interest in current affairs and challenge her preconceived notions about local socio-economic issues.
Mervin Lee (videographer, video editor):
Mervin is an 18-year-old student of the Nanyang Academy of Fine Art, majoring in trombone. His interests include Chinese orchestral music, film-making. He also teaches robotics to secondary students on a part-time basis.
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Below is a video of Mr Tan Kin Lian’s interview with the media. (TOC’s own video of interviews will be up soon.)
Investors explain about how they came to invest in structured products:
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Upset investors turn up at Speakers’ Corner
By Imelda Saad, Channel NewsAsia | Posted: 11 October 2008 2310 hrs
SINGAPORE: More than 1,000 people, who lost hard-earned savings investing in structured products like Lehman Minibonds and DBS High Notes, turned up at the Speakers’ Corner on Saturday evening.
+++++++++++++++++++
Police urge public to air grievances in lawful manner
By Margaret Perry, Channel NewsAsia | Posted: 14 October 2008 0118 hrs
SINGAPORE: Singapore police have advised the public to air their grievances in a lawful manner such as at Speakers’ Corner or to apply for an assembly permit if they want to use an indoor venue.
In a statement, police reminded the public that a demonstration in a public place without prior approval from the authorities may be deemed to be an illegal assembly.
The police advisory was in response to media queries following a DBS statement on Monday about its High Notes 5 and Constellation Series restructured products.
Over the weekend, hundreds turned up at the Speakers’ Corner at Hong Lim Park to voice their concerns over the current financial turmoil. – CNA/de
+++++++++++++++++++
The most funny thing is in the report “Police urge public to air grievances in lawful manner”, is that the photo used was about another event at Speakers’ Corner some weeks ago. Here is the caption of the photo:
Some 100 people turn up at the Speakers’ Corner to hear a debate on the public transport system
No wonder post 98 asked the question. What is CNA doing?
sarek_home (#101),
It is extremely stupid to continue to keep your money in the very same bank that you had perceived to cheat you, your friends and/or your family. Withdrawing your funds from DBS/POSB may even get you a better deal elsewhere in Singapore. For example, Maybank charges 0.5% interest higher for their current accounts.
So why not turn go to DBS Shenton Way tomorrow 10am to withdraw your money and close down your DBS/POSB bank account? Because your relationship with the bank is creditor-debtor, it is not illegal at all to withdraw your money. We don´t have to protest against DBS and MAS in the form of sit-in. We can protest in spirit by taking back our monies which have not been lost! This, however, is not illegal.
“SINGAPORE: Singapore police have advised the public to air their grievances in a lawful manner such as at Speakers’ Corner or to apply for an assembly permit if they want to use an indoor venue.”
Anyone or lawyer here who can advise, is it alright for all 1000 people (hey they are customers right) to go into the bank for some noisy consultation (same as airing grievances lah) all together at the same time.
Must air grievances in lawful manner lah. Must air carefully orelse not only lose money, you may get some free & lawful 5-star accomodation and delicious à la carte meals which shall compensate your pain for losing money.
Hundred = 100
Hundreds = 200 to 900, or 10 hundreds = 1000
I was there. Who knows how many people were there? My personal estimate was about 1000, plus or minus, though I didn’t actually count every single head there, and I doubt anyone else did either. People were also coming and going throughout. And would you count those seating at the edge watching? Or those watching from the shelter of the MRT station? Those lurking on the streets outside away from the main crowd, but watching nevertheless?
1. Reuters said the number is 600
http://in.reuters.com/article/businessNews/idINIndia-35909820081011
2. Yahoo/AFP said the number is 600
http://news.yahoo.com/s/afp/20081011/bs_afp/financebankingussingaporeprotest_081011143803
3. Straits Times said the number is more than 500
http://www.straitstimes.com/Breaking%2BNews/Singapore/Story/STIStory_288856.html
I was there too. Around 5.30pm the crowd already occupied almost half the entire SC and by 6.30pm there are so many people out there. Only that the portable speaker is too weak for this event. Maybe, suggest TOC should get a megasize one next time.
CNA reported 1000 leh
http://www.channelnewsasia.com/stories/singaporelocalnews/view/382114/1/.html
wow,so many ppl go to speakers corner …only when it happen to them then they decide to do something while all this while was “vote for PAP”….:D
hammer your feet won’t die, lightling strike your feet sure die.
Maybank and HSBC give u better interest rate for your current accounts too.
I am an investor in Lehman Minibonds. On Sep 24, I received a letter from Minibond Ltd. saying that they were substituting the underlying securities. They did not say why. The letter was dated 15 Aug, but only reached me after they filed for bankruptcy and it was not possible to redeem my notes. I wrote to MAS and asked them to assist in investigating this matter. This is the main bulk of the response I got:
___________________________________________
We note that you have copied the Note Trustee, HSBC Institutional Trust (Singapore) in this matter. The Trustee’s sole role is to be responsible for enforcing the rights of the Noteholders under the note programme in relation to any Series of Notes.
In the case of Leman Minibond Notes, HSBC Institutional Trust Services (Singapore) Limited will be best placed to answer your query. We have asked the trustee to expedite its considerations and keep the investors fully informed of their options….
____________________________________________
In case you need a translation for all those words:
2. It is not my problem it is the trustee’s problem.
3. We will ask the trustee to answer you.
They should send their staff to training to write plain English.
Independent Analyst ,
it is nothing new just like the way gov handle Mas Selamat case. Remember the case result in investigation that imply leadership is not a fault but the guard handling Mas Selamat should be blamed solely and punished.
When you give them money, it is their business, but when thing screw up and loss incur, they distance themselves immediately and push it to lowest person (if they ever be found again since most resigned), and say that it is not their fault.
For goodness’s sake, this is not a way business is conducted but only in Singapore where companies are linked with government, thing seem so different. A agent that sell product under the name of the bank is a representative of the bank, and so how can that not be bank’s problem when agent misleading the investors ?
I don’t think that hoping to get a 5% return per annum can be considered as “greedy”. That used to be the Fixed Deposit rate for goodness sake.
How can a 5% per annum return warrant a 100% loss risk?
Even buying blue chip stocks has potentially much higher return at less risk than this.
A poor MiniBomb victim,
Don worry. Is a normal bank account earning 0.5% interest and pays u monthly interest. Is not a Fixed Deposit. A FD account in maybank is even higher than 0.5%. As maybank is a Malaysia NAtional Bank i dun think it will collapsed and their exposure to sub-prime is so much lesser than DBS. They are well capitalized. The only bad thing is there ain’t many atms but that doesn’t stop me from putting my hard earned money in a safer place than DBS.
FG
Singaporedaddy,
I agreed with you that investors are held responsible for their investments. I too was tempted to buy mini-bonds when i was in queuing up to deposit money when the counter staffs recommended me to invest in mini-bonds with very high returns and low risk. That was in 2005. I told myself there is nothing in this world that gives high returns and low risk there must be a catch. I refused that offer.
Fast forward, i saw many singaporeans had their investments swallowed up in this credit crisis especially those who invested in mini-bonds. Many of them are retirees who had no knowledge of finance and are trusting. They trusted the DBS all these years. If not for the trust in local banks, nobody will dump life savings into the toxic bond if let say the bank is bank of nigeria, bank of indonesia.
These old folks are cheated of their trust and the DBS bank has failed as a financial institution to safeguard their money. The bank must compensate these retirees first and the rest of them on a reasonable terms. Singaporeans are reasonable people, they know that most investments are gone and recovery of 50-70% is deem much better than nothing.
What have the DBS proposed? Case by case basis and definitely with a confidentiality clause to divide and conquer these victims. If the Singapore gahmen has the will to help, do you think DBS can be so sloppy in their service, and MAS sitting on the fence doing minimal. MAS is a biggest joke in Singapore. They are responsible for such products to be sold, without check and balance being carry out, no public institution is safe from lax processes. Just take a look at the Prison escape, the customs flopped, the home team blunders, SAF and many more.
I hope the gahmen can come out and calm these investors and tell them that investigations and compensation will be carried out. These old folks can be suicidal when they know they will get nothing. In HK, the gov setup help lines especially for the investors who had invested in mini-bonds. How caring is the HK gov versus a heartless Singapore gahmen. Why are we a sovereign nation treating her citizens like dirt? HK is not even a sovereign country, but a Special Administrative Region of China. There is much this present gahmen must do to project her citizens that corporatism is not the current policy.
My verdict is to vote anybody other than a PAP. Some check and balance is better than none.
FG
People should name the RMs who sold them these high risk investemnents which they have no idea about.
If the sales person doesn’t fully understand them how can they be expected to give a clear understandable explation to the customers who are mainly retirees?
Its a clear case of misrepresentation by these RMs. People can be wary of these individuals if they encounter them in their visits to the bank and keep clear.if they know who they are.
#116)
“People should name the RMs who sold them these high risk investemnents which they have no idea about.
Its a clear case of misrepresentation by these RMs. People can be wary of these individuals if they encounter them in their visits to the bank and keep clear.if they know who they are.”
The point isn’t to learn to avoid those known to misrepresent their products. The point is to read the fine print, and don’t sign anything you don’t understand, or that you don’t agree with. Even if you have the names doesn’t mean that someone not on the least will not do the same to you. Try reading some terms of services / agreements from most big companies some time. The terms are so one-sided favouring the company that only an idiot or someone without a choice (like in case of essential monopoly) will sign it.
The number of people who turn out is more than 1000, a record demonstration! Show that Singaporeans will protest when their monetary interests are at stake.
A while back, SM Goh boasted that the PAP govt is not afraid of opening up the Hong Lim Park as he believes that there will not be a large demonstration due to the “good” governance of the PAP. Look’s like he will have to eat his words now.
I seriously think that Finance Ministry and MAS should hold the biggest responsibilities in allowing such a high risk product being packed as low risk mini bond and sell to the innocent retail investors. SM Goh’s comments on “that is the risk that investors looking for the high return “and “that’s life” shows that SM Goh has totally not taking his people’s interest into heart. They have forgotten that their world class salaries are from tax payee.
Very disappointment.
Don´t forget that PM Lee is the Minister of Finance while SM Goh is the Chair of MAS.
The government always emphasized that they are worried about our retirement such that it raised the CPF minimum sum over time for inflation and etc.
They should also concerned when a foreign bank issue a product that is trying to get its citizens’ millions of dollars.
Financial product advertisement in the papers, especially involving foreign banks, should be approved by the related government body (MAS). The body should ensure such advertisement stated clearly and boldly — not in fine print — and in simple layman english or chinese the risks involved.
This will provide an addition protection to the citizens.
Believed it or not, I put my cash surplus income on a property in KL. They may be less effecient but there is still safe investment. Collecting monthly rent and depositing it in a high saving account. If one time it right, there is also the exchange rate to gain as well. We Sinkaporean had always think we are better then the Malaysian and close our eyes to the opportunities that presented itself right in front of us. Even if that opportunity jump up and bit our bums we might not see it. That really speak volume. It is time to wake up and re-evaluatuate our values and investment strategy. Our Sinkapore government run by famiLee is no more better then the Mafia( fair enough they don’t gun down people in the street) but they could put you in prison and bankcurrup up( take all your hard saving legally through their courts. Are we all moron, born to be slave and lead by our noses? And keep saying thank you, more please. When are we going to wake up from our sleep? Is 50 years long enough or we need another 50 years before we realised we had been robbed?You be the judge.
It may sound weird but my browser doesn’t seem to be able to display your article rightly It looks like a whole chunk of if isn’t correctly displayed and also the layout of the page doesn’t appear to become right. Can you confirm that this post continues to be setup for Opera?
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