After Singapore government let the financial institutions screw the small guys, they are now telling me, it is all in my mind?! WTF. Do these highly paid people think the rest of us will willingly be Ah Q?

By Tan Kin Lian

The situation in Singapore is very sad. The investors have to take an expensive and uncertain class action to sue the distributors of the credit-linked notes. Although the distributors were, in my opinion, negligent in selling the notes to the investors, they earned only a modest commission (maybe 3%) from the transaction.

A better solution is for the distributors to collaborate with the investors to sue the issuers of the credit linked notes. The issuers were the party that benefited most through the creation of these notes. They were also responsible for writing the prospectus in a manner to hide the true nature of the structured product, hence misleading not only the investors but the distributors as well.

The distributors had a fiduciary duty to their customers. It is only right that they should do all they can to help their customers. In this regard, the action of Great Eastern Life should be applauded. The other financial institutions should emulate this good example to do what is fair and right for their customers.

If the distributors, being financial institutions, buy over the credit linked notes for 50% of the invested sum (plus 50% of the ultimate proceeds), they will have the financial and legal means to sue the issuers to recover any damages that were caused by their action. The distributors can also decide on the best action to recover and protect the value of the underlying assets. In contrast, there is no way that the individual investors can take any of these actions.

Another possible action is for the government authority to take the appropriate action on behalf of the consumers. This was done in many countries, most notably in New York State and other parts of USA. Hong Kong is also adopting a similar approach, although done at a somewhat late stage.

I hope that the financial institutions and the government authority can take this action now. Better late than never.

By Tan Kin Lian

Great Eastern Life has decided to give a full refund to purchasers of its GreatLink Choice policies. The refund is for the full invested sum, less any payments received by the policyholders. The total loss from the buy back is estimated to be $250 million.

Great Link Choice is a structured product that guaranteed against the failure of a certain number of collaterialised debt obligations (CDO). Due to the financial crisis, several CDOs have defaulted and the value of the structured product (GLC) had dropped considerably.

Great Eastern Life probably took this decision to buy back the product, following complaints by policyholders that they were badly or wrongly advised by the insurance advisers.

I congratulate Great Eastern Life and its parent company, OCBC Bank, for taking this bold decision. This will give relief to 18,000 the policyholders, who must have agonised over the loss of their savings during the past year.

On hearing the news yesterday, I wondered whether the loss would be borne by the policyholders in general (out of the surplus used to pay their bonuses) or by the shareholders. From the Straits Times report, it appears that the loss will be borne by the shareholders, including the parent company. This is a fair and correct approach, and I congratulate Great Eastern Life and OCBC for this decision as well.

I hope that Great Eastern Life will enhance its reputation by offering life insurance products (for savings and protection) that give good value to consumers, while making a reasonable profit for its shareholders. This require the products to be kept simple, described transparently and for the commission, marketing and other expenses to be kept at a modest level.

Being the oldest local life insurance company with 100 years of history, Great Easter Life can set a lead in this new direction to serve the people of Singapore.

I hope that this decision by Great Eastern Life will encourage the banks and stock-broking firms in Singapore, who have sold similar products to their customers, including the Lehman Minibonds, DBS High Notes, Morgan Stanley Pinnacle Notes and the Merill Lynch Jubilee Notes, to make a similar buy back offer to their customers who were badly or wrongly advised on these structured products.

Even if the financial institutions do not adopt the buy back arrangement similar to Great Eastern Life, a settlement similar to the one adopted in Hong Kong will be appreciated by the investors of these credit linked notes in Singapore.

I hope that the Monetary Authority of Singapore will encourage these financial institutions to consider such a settlement.

http://www.sgpolitics.net/?p=1677

http://tankinlian.blogspot.com/2008/10/lost-sense-of-bonding-and-togetherness.html

Dear Mr. Tan Kin Lian

I am a retiree in my sixties and, like you, my heart sentiments and empathies are for the man-in-the- street, ordinary Singapore citizens, and the senior citizens, who are not able to express themselves on their plights and miseries, for lack of ability, education, literacy, IT skills and media know how.

The plight of the poor misguided uncles and aunties, and including my wife and I, who laboured all their lives trusting in the government’s promise of a better life, when they can retire with their CPF nest eggs, have just had their dreams shattered and crumbled by the latest chain of events from the financial collapse from around the world. Some of us may be in the same age bracket as a few of our longstanding national leaders, some of whom have passed on, and some who are still giving counsel on the affairs of state. How does one compare the earning of a poor cleaner or bus or taxi driver, with that of those whose monthly salary income is 2000 times as much, or whose lifetime savings is not even one fifth of one months salary of some.

It is not my mission and agenda to protest against the establishment, just for protest sake. But we are now talking about retirees and hardworking citizens who have saved diligently and conscientiously for nearly all their working lives, and as they now walk into their sunset years, they have just suddenly seen the sun go down, without being sure whether it will rise up again the next day.

This is a very sad and human tragedy for Singaporean leaders to address quickly. There is no point in building more of the asset rich Singapore hardware, when the national heartware is in tatters. We have to offer a temple of hope, in order to create a real sense of community belonging in this small so called ‘ Red Dot island paradise’

Whilst we are shut out our city to entertain and accomodate our foreign guests, as they pop champagne and feast on caviar and veal, whilst they watch some silly machine zooming by, our taxi drivers, retailers and restaurants are hurting from lack of patronage and support. Whilst Rome burns, we are makiing sport.

It is paradox, and an irony, when well qualified and able young Singapore born sons and daughters, leave this ‘island paradise’ for greener pastures in Australia, NZ, the U.S., Canada, and may not come back home, and we then encourage new alien migrants from neighbouring feeder countries, offering them PR or Singapore citizenship after two years, because they can play better ping pong, or badminton, or football to add to our talent pool.

On the one hand we have full born and bred political opposition members who risk and sacrifice all they have and owned to speak up for the silent Singaporeans, but they are crucified on our court altar, for their their defiance and different points of view. Are we supposed to behave like obedient Singaporean sheep that goes “baa baa, yes sir, yes sir, you’re right again,
all the time” .

What has happened to the days of the “gotong royong” when we were more kin and kind as near equals with ‘cangkuls and poon kees’ in hand, to re-build track roads and clean up the beaches. That was a time when we truly felt the kampong community spirit of collective self help, and we could relate and identify very strongly with our MPs and national leaders fighting for this country’s survival. What has happened to the recognition and memories of some of our surviving pioneer old guards like Toh Chin Chye, Goh Keng Swee, Othman Wok, Ong Pang Boon, Jek Yeun Thong? Are they forgotten, because they have now become irelevant today? What about those who have also contibuted but are no longer with us – Devan Nair, S Rajaratnam., E.W Barker, Howe Yoon Chong, George Bogaars, Hon Sui Sen, Lee Siew Choh, Lim Chin Siong, J.B. Jeyaretnam and others.

This country and this nation’s progress in the last 40+ years has been one of miraculous transformation, if we judge our report card by stainless steel, gleaming glass, bricks and mortar, and manicured trees and the landscaped gardens. No Singaporean in their 50 -80 years, would deny our government this credit. Our port, airport, CBD, MRT, highways, public housing, schools and institutions of learning stand out as wonderful trophies to our national sense of accomplishment, and much pride for the civil servants, town planners and estate managers. I, myself, have been a beneficiary of this economic progress, when I recall, as a kid, how I used to take my bath from a public stand pipe, or well, and poo into a bucket. Yes, I am grateful to this goverment for improving our creature comfort, dignity and quality of living, but not of life.

But somewhere along the way, coming to where we are today, we seem to have lost that sense of bonding and togetherness with our founding fathers. Our progress reminds me of the book “Animal Farm” by George Orwell. With the success of the physical transformation of the environment, there has also been an attitudinal and spiritual transformation of another kind. It has been a gradual process and shift of our cultural values and national priorities

As our leaders work and live in fine comfort, we the citizens of Singapore are mortgaged to our hilt, and now even our hard earned savings are going up in smoke, because the people in charge knows how to set up the traffic rules, but did not do anything to monitor and track the traffic flow.

Hence for many of us who continue to place our blind faith and trust in a government backed and publicly endorsed brand name, and then to be told when the bottom falls out, “you make your own bed, you lie in it”. ” If you fall down from bed, through no fault of your own, that’s too bad. That’s life. The market forces of caveat emptor will have to prevail “

It is like saying, we have proudly built for you a wonderful zebra crossing, but you can cross at your own risk, without the need for traffic light controls..

You are a brave man for doing what you are doing now, and I will refrain from egging you on, by being just an entertained spectator. Some people will do that, but when the riot vans come around, many will scatter and hide. I am a peace loving person, but like many Singaporeans who have helped to build and make this place our home, I too have my gripes and grouches, at the way we are often being programmed and manipulated by those who know what is best for us.

It will be interesting to see if the Prime Minister will still deliver on his national rally pledge, that no one will be left out of the national banquet and pie sharing, even in this difficult and trying time. To the rich dining in aircon comfort, an unfinished bowl of rice is only just $0.50 cents. To the impoverised and starving, that same bowl of rice, could represent a days wage, of burning and straining in the hot sun, or some bent old lady collecting tin cans and discarded cartons just to stay alive, let alone calling it a living.

May God bless, and keep you.

PatAngel

http://forum.channelnewsasia.com/viewtopic.php?p=2453905#2453905

What is striking about the Madoff scandal and the credit linked notes debacle is that investors in Madoff’s schemes were not blamed for their losses. All attempts are made to help soothe and mollify the victims of Bernard Madoff. No one says to those who were conned by Madoff that they should have read the fine print or that they should have known better. There is the imputation of naiveté as Madoff’s supposedly consistent returns cannot possibly have been managed in a period of massive volatility, but fools the investors in Madoff’s funds maybe, criminals they are not.

The drum beat of articles in the Straits Times subtly instructing investors that they should blame themselves for their losses never seem to end. They have even gotten journalists whose parent was personally affected to turn their backs on kin and write the nonsensical propaganda intended to further mislead you. Madoff is now under 24 hour house arrest and everyone associated with him is under suspicion, has anyone in Singapore been punished? Actually, punishment has been doled out and it has landed squarely on the heads on the investors who have dared to seek justice. Character assassination is their favorite ploy and in their hour of deepest pain, Singaporean journalists have not hesitated to plunge the knife in even further. Why is it that these minions can go through life without any sense of decency or shame? They would prostitute the people close to them to get that small pet on the head?

I continue to urge investors to organize without the distraction of those who have different agendas. A weak leader who cares will serve you better than to listen to those who monopolize the soap box for their own personal ambitions. Otherwise you might want to lie down flat on your back and take the blame that the government wants to shove into you. You have to be strong for you must understand that they will move hard against you.

forum.channelnewsasia.com/viewtopic.php?t=187581&postdays=0&postorder=asc&start=160

Investors should decide if the weekly gatherings at Hong Lim are useful. If not, you may be better served by moving the discussion to a less public arena where everyone can be heard. There is a need to keep up the pressure without exhausting yourself because the fight will be long drawn. It stopped being a sprint when compensation decisions were made and it has instead become a long and somewhat arduous walk where every effort will be made to discourage you.

The Yahoo! Group is still open but it is inactive due to the lack of critical mass. Following your notification on this board, I checked the dbshighnotes account and have replied to your email.

Although the issue of investor compensation and Tan Kin Lian’s bid for the presidency appear to be unrelated, those of you who have experienced the sort of gross injustice that Singapore’s present system actively creates should understand that some degree of political maturity is vital if anyone of us is to be safe in our country. We are at present like a three year old kid walking around in a man’s shoes too drunk on our own success to understand the grave responsibilities that we must all bear. None of our elected representatives have stood on the side of investors. Only unelected, and in my case, self appointed citizens have dared or bothered to speak up on behalf of the unfortunate. Even members of parliament who are supposedly in opposition have sided with the authorities in their terrible handling of this matter. I do not know who Tan Kin Lian is but I believe his bid to be president of our republic is an event of great importance to the development of our country.

The highest priority now ought to be getting the 100,000 signatures. If you are a credit linked notes investor, the one way I can think of to concretely express your displeasure at how shabbily you have been treated is to get Tan Kin Lian on the ballot. Petitions are just words that can be tossed out with the flick of the wrist. Votes are real and cannot be disregarded.

Here is how I see it. The candidate should never go out to solicit signatures himself. The first order of business is to build a team and appoint a campaign manager. The idea is to not overexpose the candidate and by using volunteers it creates a sense of positive momentum that we believe in making Singapore a better place for one and all. A group of 20-30 volunteers working in pairs on the weekends should get the ball rolling. Neatly dressed, no body odor or bad breathe, they should approach people discretely at transit points like MRT stations or bus terminals. The schedule should be flexible so that volunteers will only have to give whatever time they can but it must be well organized so that gaps in coverage are plugged quickly. If the right catchment zones are canvassed, particularly if areas where there have not been elections for many years are attended to, the 100,000 signatures are achievable. Even if all the requirements are met under the constitution, it does not mean that Tan Kin Lian will allowed to contest. But the fact that the names were gathered would be a powerful and tangible show of support as the name Tan Kin Lian as a spokesman for the investor is now deeply enmeshed.

Despite the appearance of wealth, there is much to be disappointed about how our country is governed. In a different world and at a different time, I wrote that it is not about democracy, but about good governance. Some people were very pleased with my arguments but I will tell them now that it is still about good governance. You may not believe or even care if Singapore survives you, but I do, because I must.

http://tankinlian.blogspot.com/2008/12/legal-action-against-issuers-and.html

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.

Tan Kin Lian

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Tell Singapore government: Ask them a question or give a suggestion

We informed people about the “Tell Singapore Government” subsite and have received some interesting reaction at some forums.
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Our responses to some of the comments are listed below. If we are not answering some other specific questions, that is because we do not know how.
 

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