Tan Kin Lian's Blog: A good settlement?

Wednesday, October 22, 2008

A good settlement?

Dear Mr Tan

I thought that it may be useful to let you know that I have just obtained a verbal offer from X Bank to buy back the Minibond investment (Series 2) that was sold me in 2006. The buyback price is (details deleted .....................).

The bank has requested that I not make this details public for now (.... as they have to sort out some other matters). I am writing to inform you of this to let you know that your actions have resulted in a positive outcome in my situtation. I hope this encourages you to continue your good work for the rest of those affected.

At the same time, I hope that you can (without revealing details of the offer made to me) stress to all affected parties to work closely with the banks concerned in reaching a settlement. I am concerned because I noticed from the comments in your blog that many are disillussioned and are now focusing their energy on the legal action option, rather than working with the banks for a resolution.

Back to my situation, I know that you are very busy with many emails, but if you could find the time, could I ask if there are any concerns that I should have or if there are implications to such a settlement proposed by X? Is it necessary to consult with a lawyer before deciding on whether to accept the settlement?

Once again, my heartfelt thanks for everything that you have done.

Regards

18 comments:

Unknown said...: Dear Mr. Tan,
I believed that investors at this stage should not take any legal action nor accept settlement from FI till Friday when options are clearer.

For all you know, the settlement offered can be of lower value than the Friday option!

It would be nice if possible for the writer to share her circumstances of buying so that other investors can guage their chances. For all you know, the writer's case may be a very special case that the FI agreed to settle.; October 22, 2008 12:15 PM
Unknown said...: While it is very encouraging that someone someoneplace is getting through, at the same time, wouldnt it be sensible (and logical) that it can also be very questionable if the report of the getting through is genuine, or is it an attempt to create an encouragement that continued persistence will result in getting through SOON

personally i find it sort of interesting, a single investor with no doubt limited involvement (however sized) would be able to attain any sort of an affirmative response from any involved (or some might put, accused) institution at this what i consider to be still tumultuous stage

doest anyone agree, if at all; October 22, 2008 1:25 PM
Betsybug said...: It's hard to evaluate the case given the paucity of specific information of the poster's details (e.g. age, occupation, product bought, bank, amount, RM, offered amount, etc).

Can poster/Mr Tan share more info, pls?

I agree that it seems too early to accept since things are still unclear on the ground.; October 22, 2008 3:29 PM
siewkhim said...: This comment has been removed by a blog administrator.; October 22, 2008 4:25 PM
Tan Kin Lian said...: Several investors and journalists have asked me to disclose the name of the bank and the details of the settlement.

I am not able to do so at this time.

I had spoken to the person who sent the email to me. He was communicating on behalf of his elderly mothher. She belongs to the "vulnerable group".

I hope that the bank will be able to make an announcement at a later date. It will reflect well on the public image of the bank.; October 22, 2008 5:03 PM
Faircomment said...: I have mentioned before that "settling on a case-by-case basis" is a "divide and rule" tactic adopted by the banks.

The offer to settle is made on verbal basis. This means the offer is not firm and can be retracted any time. Also, the offer is a way of "testing the market" to find out how low the offers can go. This cannot be to the benefit of all the victims. They should stand united and negotiate en-bloc for a firm and fair settlement. This is where Mr Tan Kin Lian (not lawyers) can really help them in the negotiations. He has their respect and trust.

The bank also specifically requested the writer not to make public the offer details. This is further proof of the bank's ulterior motivation.; October 22, 2008 5:04 PM
sw said...: Dear Mr Tan,

Why don't you publish a book to teach the ordinary folks who are not financially literate. Say, english and chinese versions. Alot of people are not internet savvy.; October 22, 2008 5:49 PM
freeier said...: To be fair, there are bound to be people who knows the product and are trying to catch a free ride.

If one wants a one size fits all settlement, it would likely be a legal case and that might not be the best solution for many of the vulnerable investors.

Not sure why so many people voicing their desire to get the one size solution.; October 22, 2008 5:56 PM
Unknown said...: i disagree. there is a thing called class suit to represent many if not all aggrieved investors for product mis-sold to them.

it's like if a person in a town knows that the water supplier is piping toxic water to the people in the town, is it fair for him to be denied compensation for a wrongdoing by the water supplier?; October 22, 2008 9:16 PM
Unknown said...: the bank of authority should make public announcement of any known compensation offered to aggrieved investors because this is already a public issue.many people will appreciate any disclosure.; October 22, 2008 9:19 PM
Unknown said...: I would urge the bank to give a fair compensation. If not how to trust my money with the bank. Felt disappointed with MAS's response. Feel like they don't care of singaporeans esp those who are vulnerable.If they truly care, they should do more for the citziens instead of harping on caveat emptor. The problem is these retirees don't understand the prospectus and relied on RM's professional advice and trust in their integrity. Now, banks have tarnished their image of a trustworthy bank and one that take advantage of the weak and abused the trust.; October 22, 2008 10:08 PM
goodwill said...: My argument up to this point has always been - let them do what they need to do first, if you are not happy with the results, then do what you need to do. Why are some people rushing into taking legal actions? The banks aren't running away, are they? Mr Tan Kin Lian has done a fantastic job in escalating this issue and getting the media attention. The ball is in their court now, not ours. Give the FI some time to work out something for you, if you are not satisfied, go Fidrec. And again, if you are not satisfied, go start talking to your lawyer. I am sure the lawyers won't run away either. My point is this, if you think you have a genuine case here, I honestly don't understand why you wouldn't want to explore all options first you go all-in. It just doesn't make sense.....; October 22, 2008 10:54 PM
freeier said...: goodwill > sensible comment.
but from the ppl that i have mailed/spoken to so far, most are very emotionally burdened. Noted that its their money at stake so they are concerned, but if you ask me, the situation is already bad enough, let see what's the best solution out. And definitely nothing to rush about.

慢工出细货; October 22, 2008 11:37 PM
Unknown said...: Good Evening Mr Tan,
I think it is seriously wrong for DBS & HLF to just compensate this group of people termed vulnerable. They are just basing on what MAS said/told them to do.

There are many others that fall outside this group and it was clear to me they only want to compensate 20% of the investors who were affected since it was mentioned that 80% were below 62 yrs old.
Gov & MAS have been lagging below Hong Kong in all these actions and measures.

VERY DISAPPOINTED !!!!!!

If Gov/MAS can't force the banks to buy back, they should takeover the job of buying from the investors. It only cost a fraction of what they spent to buy Citi, ML & UBS and sitting on big paper losses. Why nobody highlighted these facts!; October 22, 2008 11:46 PM
Anonymous said...: Mr Tan,
If an investor is offered and accepted a 70% settlement, I suppose the FI will take over the note holder's rights and interest. Assuming a new swap counterparty take over Lehman's position and continue the minibond until its maturity when it is redeemed at 100%, does that mean the FI will stand to make a profit of 30% plus the interest income for each year?; October 23, 2008 3:57 PM
freeier said...: u want the cake and u want to eat it ?
so what you want ? hold on to it and take the risk ? or get out and take abit of losses ?!; October 23, 2008 11:24 PM
Unknown said...: Mr Tan,
I started to feel that banks need to disclose how they compensate investors regardless of whether he is vulnerable or not. It is so far, the non transparency that contributing all of these problems to the whole financial industry. If these toxic products' contract were being opened up to public for scrutinized, it will saved all of the troubles from beginning. The "ironical" product which doing well is Fixed deposit. It is simple, highly standardized and open up for people to understand.
In future, if a product is not easily understood or not transparent, people are very likely to avoid it.

For this compensation exercise, if there is any Non Disclosure Agreement between bank and investors, I'll still regard that as non resolved, and put my money away from these banks. At the end, I hope that you can help to collect the figures about how many investors are happy with the settlement between banks. We need those figures to punish banks not being ethical.

P/S: It is ok to make mistake unintentionally, it is not ok to skip the correction.; October 24, 2008 2:40 AM
Anonymous said...: At this juncture, I think the independent party should be involved or at least informed by the FI about the case (reason) for compensation and the amount. It is then the dicretion of the IP to make announcement.; October 24, 2008 2:18 PM