29 Dec 2008
Jimmy Chow, Cheung Sha Wan
The controversy over the minibond saga does not only relate to compensation. It is about [alleged] mis-selling.
Instead of paying investors of Lehman’s minibonds back, local banks have come up with a complex way by providing a pool of HK$100 million to help the minibond trustee to perform its duty to protect the “interest of minibond investors” (“Deduction decision in legal fight irks Lehman investors”, December 19).
If a retired taxi driver did not seem to understand the minibond in which he had invested his life savings, he can hardly be expected to grasp this legal game [unfolding in the US]. Neither can I.
So far, only a limited number of people have received compensation from the banks, a small percentage of total claimants.
The mis-selling of securities in Hong Kong, which mostly occurred over the last two years, is reminiscent of the mis-selling in Britain between 1988 and 1994.
In 1988 the British government encouraged people to make private provision for retirement in addition to the state pension by purchasing personal pension plans.
It turned out that fast-talking salesmen misled people into buying retirement pension products they did not really need.
Realising there had been mis-selling on a huge scale, in 1994 the British financial services regulator “instructed” banks and insurers to stop these practices and review all cases.
By 1997 only 5 per cent of the cases were cleared up.
That year, the newly-elected Labour government decided to “name and shame” and to fine the laggards.
Disciplinary action was taken against 349 firms which resulted in fines totalling £11million (HK$126.3 million). Nearly £12 billion was paid in compensation to policyholders.
I hope I am wrong, but if our government remains reluctant to conduct a radical review on both the minibond scandal and the city’s regulatory framework, the saga will drag on indefinitely.
Jimmy Chow, Cheung Sha Wan
The controversy over the minibond saga does not only relate to compensation. It is about [alleged] mis-selling.
Instead of paying investors of Lehman’s minibonds back, local banks have come up with a complex way by providing a pool of HK$100 million to help the minibond trustee to perform its duty to protect the “interest of minibond investors” (“Deduction decision in legal fight irks Lehman investors”, December 19).
If a retired taxi driver did not seem to understand the minibond in which he had invested his life savings, he can hardly be expected to grasp this legal game [unfolding in the US]. Neither can I.
So far, only a limited number of people have received compensation from the banks, a small percentage of total claimants.
The mis-selling of securities in Hong Kong, which mostly occurred over the last two years, is reminiscent of the mis-selling in Britain between 1988 and 1994.
In 1988 the British government encouraged people to make private provision for retirement in addition to the state pension by purchasing personal pension plans.
It turned out that fast-talking salesmen misled people into buying retirement pension products they did not really need.
Realising there had been mis-selling on a huge scale, in 1994 the British financial services regulator “instructed” banks and insurers to stop these practices and review all cases.
By 1997 only 5 per cent of the cases were cleared up.
That year, the newly-elected Labour government decided to “name and shame” and to fine the laggards.
Disciplinary action was taken against 349 firms which resulted in fines totalling £11million (HK$126.3 million). Nearly £12 billion was paid in compensation to policyholders.
I hope I am wrong, but if our government remains reluctant to conduct a radical review on both the minibond scandal and the city’s regulatory framework, the saga will drag on indefinitely.
9 comments:
Yes, if an elected government does not intervene when its citizens have been abused and are shortchanged then what do these government people do except make nice sounding speeches and collect their salary? All countries make it their business to look after their citizens as a primary responsibility. Are we leading the world again towards a new paradigm to show that asians can think?
Our present government is thinking too much for theie own salary packages rather than the well being of its citizens. It is really sad indeed.
We have given the full trust to them for so many years but endup we got playout. Look at other countries, there are no parties can stay that long. Only the lighting Logo.
Pretty sad thing.
Only when the ruling party get kick out of parliament, then you got hope. One party is not a bad thing provided she is not selfish, self-centred, self esteem (too big, too high). Can this happen in S'pore? Dun think so, because of 40+ years of comfort which lead to complacency. Only thing that will not change is when the next boom time come, a big salary increase and big bonus will be brought up. Oh good time you have is because of us, the elite people. You object also no use, because there is no Congress or Senate to throw it out. Instead count yourself lucky, you are rule by the "elitism". Sounds a bit like those CEO of Walls Street companies??
Maybe in uniquely Singapore, the banks and other big or monopoly businesses are so interconnected with the gahmen that if they take action (hurt) against one, the other will also feel it. Only you folks are left out. If you feel hurt, they don't.
That's why the Gahmen behave the way they do and also of course not convenient to tell you why. That's why the silence and lack of a proper response.
You think MAS dares to do that, fine the banks and the insurers? There had been many cases of misconduct by insurance agents, did MAS discipline them severely/ Just massage them for a few months and these agents were back again disguised as better sounding titles like financial consultants to plan bigger heist and to fleece this time more carefully and legally.
In mature markets people like these agents would be in the coffins awaiting burial for good.The insurers would be fined until their underwear left.
When so many such products are in the market, sooner or later u will kena. Very hard to escape one.
a lot of people already kena revosave
locked for life for a return of only 1.35%. This is madness. It only shows how stupid consumers are and how insurance are ruthless agents are. One is an idiot and one is without conscience and this is how mis-selling is born.
Hope FISCA can be formed as soon as possible to stop all these. FISCA can also play the regulator's role, watchdog and whistle blower.
I read this report in the New Paper of December 30,
"HE stood his ground over a water issue and refused to budge.
Mr Francis Tan had wanted government agencies to foot a $1,200 water bill he felt he was not responsible for.
And that is exactly what the National Environment Agency (NEA) and the Public Utilities Board (PUB) have agreed to do, even if they do not admit liability.
Mr Tan had come home from a two-month trip to find himself with a damaged toilet cistern and a $1,200 water bill."
What is the relevance of this for us investors. Two things: it is standard policy to say consumers/investors are at fault. Secpnldy, stand your ground, sue them. Make it difficult for them to hide their mistakes. They will cave in!
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