Speech at Speaker's Corner - 15 Nov 2008

1. Petitions to MAS
1 wish to give you an update of the progress of the three Petitions sent to the Monetary Authority of Singapore.

Petition #1 was sent to MAS on 9 October 2008. It was signed by 983 investors of the credit linked securities. It asked the Government to investigate into possible wrong-doings by the financial institutions that created and marketed these securities to the retail investors.

If there were possible wrong doings or breaches of the existing laws, specifically the Securities and Futures Act and the Financial Advisers Act, the Petition ask the Government to take appropriate action against the financial institutions and to seek fair compensation for the investors for their losses.

I met with Dr. Andrew Khoo and his colleagues on 9 October to hand over the Petition, which was addressed to Mr. Goh Chok Tong, chairman of MAS. I briefed Dr. Khoo and his colleagues about the possible areas of breaches of the existing laws.

I have not heard from MAS subsequently on the outcome of this Petition. I have sent two rerquests to Mr. Goh Chok Tong and to Dr. Andrew Khoo for a meeting to discuss the progress. So far, I have not been successful in getting this meeting.

Petition #2 was sent to MAS on 17 October 2008. It was signed by 277 investors. It asked MAS to investigate the sales training and marketing processes of the financial institutions that distributed these securities. Specifically, the investigation should examine if the sales representatives that distributed the securities were trained about the correct features of the securities and on the content of the prospectus, so that they can give the correct information to the investing public.

I have received an acknowledgment to this Petition. I do not know if the MAS intend to carry out any investigation as requested in the Petition.

Petition #4 was sent to MAS on 31 October 2008. It was signed by 1,017 investors. It asked MAS to review the complaint handling process of the financial institutions that distributed the credit linked securities. It asked MAS to set up an independent unit to receive the complaints and to encourage the financial institutions to adopt a collective approach in offering fair compensation to the investors who were misled into investing in these securities.

I have asked for a meeting with a senior official in MAS to discuss this petition and to follow up on the progress of the earlier petitions. My request was declined.

I reminded MAS that I am speaking on behalf of about 1,000 investors. They should not ignore my request for a meeting or to treat me like any single individual with a grievance. Even a single voice should be heard. If 1,000 voices are not loud enough, I wonder what will make our officials hear?

I will continue with my efforts.

2. Letter from an investor
I wish to share with you the views of an investor called SB. It is posted in my blog. This investor is willing to share some responsibility for investing in the credit linked securities carelessly, but is unhappy with the response of the Government leaders. I read his letter to you:

http://www.blogger.com/posts.g?blogID=11702093

I replied to SB that his approach is along the same lines that have been covered in Petition #1. So far, I have not heard from MAS if they intend to carry out an independent investigation into this matter.

3. Statutory declaration
A few weeks ago, I suggested that each investor should get a lawyer to help you to write a statutory declaration. This statement should explain how you were advised into making the investment. If you were given the wrong information or were misled about the credit linked notes, this fact should be stated in the statutory declaration. The lawyer will help you to state this fact properly.

You should make the statutory declaration truthfully and honestly. If you tell a lie, you can be prosecuted under the law. However, if you tell the truth, your statement under oath will have a stronger impact.

If many investors make similar statements about how they were sold or mis-sold on the credit linked notes by the sales representatives from the same financial institution, these declarations taken together will establish a pattern of mis-selling by the financial institution. It will convince an independent and impartial judge about the mis-selling.

The Monetary Authority of Singapore and FIDREC said that the statutory declaration is not necessary.

Subsequently, we learn that many of the financial institutions have rejected the claims of mis-selling made by the investors.

If your claim has been rejected, I advise you to make a statutory declaration now and lodged your complaint again with the financial institution. If they reject it again, you can use your statutory declaration to lodge your complaint to FIDREC.

You have lost many tens or hundred of thousand dollars in making these investments. It is better for you to send $120 to make the statutory declaration and lodge your complaint again.

If the statutory declaration is still rejected by FIDREC, you can join the collective legal action. The statutory declaration can be used for this third step.

4. Collective legal action
My committee is discussing with a few lawyers on the approach to take on a collective legal action.

Our Government leaders and MAS have advised that this should be avoided, and that other avenues are open for the investors to seek their redress.

Many investors have lost faith in their recommended approach.

My committee will help the investors to prepare for collective legal action, but we still advice that the legal action should be taken only as the last resort.

I hope that the MAS will respond to my requests for a meeting to discuss how the matter can be resolved fairly and that a costly legal action can be avoided.

We are still keen to seek an outcome that is fair to the investors and preserve Singapore’s reputation as a financial hub that can be trusted to take care of the interest of the ordinary people.

Tan Kin Lian