Tan Kin Lian's Blog: MAS seeks advice from senior counsel

Saturday, December 06, 2008

MAS seeks advice from senior counsel

By: FRANCIS CHAN, Straits Times

THE Monetary Authority of Singapore (MAS) has enlisted senior counsel Davinder Singh to advise it on the latest legal issues faced by the ill-fated Minibonds structured notes.

The central bank said last night that it had called on Mr Singh, the chief executive of Drew & Napier, "to advise MAS on the implications of the legal issues raised by the lawyers acting in the Chapter 11 proceedings for Lehman Brothers".

This follows Tuesday's warning by the Minibonds trustee – HSBC Institutional Trust Services Singapore – that the unwinding of the notes may be challenged by lawyers involved in bankruptcy proceedings over Lehman in the United States.

Minibonds series 1 and 5 to 10 of the notes have defaulted and will be unwound by three appointed receivers of the defaulted notes from PricewaterhouseCoopers (PwC) Singapore.

On Tuesday, the receivers said investors might have to wait at least two years or more for any resolution, given the legal complexities introduced by the notice from Lehman's lawyers.

MAS last month also called on Deloitte & Touche Corporate Finance to advise the central bank on the

Minibonds fiasco. Deloitte & Touche's services have also now been extended.

While the MAS has Mr Singh and the resources of Deloitte & Touche, the receivers from PwC are separately being advised by their own legal counsel.

Last night, the MAS also reiterated the trustee and receivers' warning that it may not be possible for any resolution to be reached within a short span of time.

"Nevertheless, MAS expects the trustee and receivers to pursue all appropriate avenues to protect noteholders' interests," it added.

About 8,000 retail investors sank $375 million in Minibonds – only to see Lehman collapse on Sept 15.

Three other independent parties have been roped in by the MAS to ensure that the plight of these investors is not ignored amid potential cross-border legal battles.

On Oct 2, Mr Gerard Ee, Mr Hwang Soo Jin and Mr Law Song Keng were appointed by distributors of structured products such as Minibonds, Merrill Lynch Jubilee Series 3LinkEarner Notes and DBS High Notes 5 to oversee their complaints handling processes.

All three said they were working closely with the financial institutions to ensure fair and prompt resolution of complaints by investors.

REPLY
I hope that MAS will also ask Mr. Davinder Singh to see if there were any wrong doing committed by Lehman Brothers in the creation of these products. Did they breach the requirements of the Securities & Futures Act to provide relevant information on the product for the investors to make a proper assessment, or were any material information omitted?

8 comments:

Unknown said...: T-A-I-J-I

This also means 'some authorities' have ran out of options. executable options on their end.; December 06, 2008 2:03 PM
Unknown said...: oh no! i cant believe i missed an even more subtle point, in fact 3

By referring for the Biggest Meanest Legal Kingpin on this island, they are sending 3 messages all at one go

1. This is a Commercial, if not Civil, affair

2. If the terms are favorable to the Investors, FIs please note you and whoever you are engaging would be going up against that Biggest Meanest Legal Kingpin on this island

3. If the terms are favorable to the FIs, Investors please note you and whoever you are engaging would be going up against that Biggest Meanest Legal Kingpin on this island; December 06, 2008 2:29 PM
Anonymous said...: Diving Sing will not be used to shoot their own foot.Don't expect any like that. If MAS is sincere it would have issued an edict to all banks to pay up. Pay or close shop should be the attitude of a regulator and not massaging instead.; December 06, 2008 3:02 PM
Chan J C said...: There are many actions going on with Minibond:-

1. US offers for legal class action against FI and issuer for HK investors...

2. MAS getting Mr. Davinder Singh to advise...

3. Class action from investor...

Can Mr. Tan kindly advise us what we should do as it is rather confusing.

Thank you sir.; December 06, 2008 3:05 PM
Anonymous said...: Does this mean MAS finally realized that the political cost would be too high to simply brush it aside? Hopefully they would get something out with substance instead of just paying lip service.; December 06, 2008 7:50 PM
Anonymous said...: As the brochures and related advertisements all have the distributors' logos printed on them, the distributors have to assume responsibility for missing critical info or misleading wordings like "Minibond".; December 06, 2008 9:53 PM
Anonymous said...: 7.50pm, Yes! I think you are right.
But, it's a bit too late for MAS to step the first step out now. Too Late already.
The final result of political will be reflected on the next election.

With the minibonds cases, it lets more people dare to stand up to think and action. Sincerely, we should thanks Mr.Tan and the investors.

For those who are still doubt the intention of Mr.Tan , pls wake up.

My best wishes to Mr.Tan and all of the investors.

cheers

LPC; December 07, 2008 8:50 AM
Anonymous said...: Hi All,
The last paragraph in the ST article wrote by Francis Chan needs to be corrected.

Quote" All three said they were working closely with the financial institutions to ensure fair and prompt resolution of complaints by investors." Unquote

We have specifically asked and talked to Mr Gerald Ee at the DBS HN5 dialogue and he clarified that
his role was to ensure that there was a compliant process in place and the process was carried out and complied by DBS. His responsibility did not include judging whether the decision reached by DBS was fair or not.

This critical difference in the role of the independent parties must be highlighted to the media. Otherwise readers would think that victims interest was safeguarded as the indep parties would arbitrate and arrive at fair resolution on their behalf.

Get Real ! We have to defend ourselves!; December 08, 2008 6:44 PM