Tan Kin Lian's Blog: Honesty and fairness

Monday, July 27, 2009

Honesty and fairness

It is important for our society to be operated on the principles of honesty and fairness. The minibond crisis has raised many issues of deep concerns to me, and many other people in Singapore.

When I organised the Petition last September, it was very clear that the financial institutions had failed in their conduct as required under the Securities and Futures Act and the Financial Advisers Act. The Petition, signed by more than 1,000 people, asked the authority to carry out an investigation and take appropriate actions under these law.

After a protracted period, which left many investors in deep anguish, the investigation report was published. The punishment meted to the financial institutions was light. Many investors, who lost large sums of money, were not compensated. This raised serious doubts on the question of fairness and justice in our society. It seems that the ordinary people are at the mercy of the powerful people and institutions.

Hong Kong took a different approach. The authority exercised its power and influence to get the financial institutions to make compensation of 60% or more, to the investors. The amount that is being compensated is many times of the compensation in Singapore. The situation is similar, in respect of wrong doings by the financial institutions.

The Hong Kong settlement is scantily covered in our local media, although it is a matter of great importance, not only to the investors who are affected and their families, but to the other people who are not affected. It shows two different approaches taken by two states on a similar issue.

This raise another serious issue of honesty and transparency. Why is such an important issue being swept under the carpet and not reported in the mainstream media? People are not blind. They can read the news in the internet and the blog. They have ears and can listen to gossips in the coffee shops and elsewhere.

I hope that the authority will reflect on this matter and re-approach it on the principles of fairness and honesty. It concerns the future of our country, the people and our children.

Tan Kin Lian

31 comments:

Anonymous said...: Mr Tan,
I agree with you fully. Any reasonable person will come to a conclusion that something is very wrong with the way MAS and our Government is handling this. Where is the fairness when they allow banks especially those with operations in both Singapore and Hong Kong to only compensate Hong Hong customers and not Singapore customers when the situations are the same in both countries. Where is the logic? Banks if they are not guilty would not fork out millions of dollars buy bank portions of the Minibonds from their customers. I would advise all Singaporeans and overseas investors to move all their investments to Hong Kong because over there customers more fairly protected by the Hong Kong authorities than in Singapore. I am sure MAS is not stupid to understand that in order to suceed as a financial centre, there must be both FIs and customers.; July 27, 2009 9:23 AM
Anonymous said...: Mr Tan,
I agree with you that government has not been hoest and transparent in this issue. My experience in this minibond has really changed the image I have of this government; July 27, 2009 10:22 AM
Anonymous said...: One "strong" party system with weak oppositions surely uses a "different approach" from HK.; July 27, 2009 11:13 AM
Junyang said...: +1. The observation is fair.

I sincerely hope that the government can respond to this post and justify her position.

This way, we can see the merits of argument for both sides and make an informed opinion on this matter.; July 27, 2009 12:15 PM
Anonymous said...: Thank you Mr Tan, I totally agree with what you have written, you have again spoken up for timid Singaporeans. Hope more Singaporeans could be like you.; July 27, 2009 12:38 PM
Anonymous said...: What will happen next? Govt has just swept it under the carpet and then talk about unity, low income group, foreign talent, Singapore future etc. But they just don't get it. This issue is so badly handled by them and they continue to ignore the ground feeling that justice was not done. Talking about caring for the people, Full of Crap.; July 27, 2009 1:05 PM
Anonymous said...: I bought Minibond from RBS/ABN AMRO. They have agreed to buy back from all their Hong Kong customers 60% to 70% of their Minibond. Up to now, they have not offered to me or all other Singaporean customers the same conpensation terms. As a Singaporean, I am fed up with being discriminated against by the bank. If our government and MAS chooses to do nothing to help Singaporeans get justice and fair treatment from ABN AMRO, I think it is time that we take actions ourselves. I call on all RBS/ABN AMRO Minibond customers to let all their friends, relatives and business associates know how RBS/ABN AMRO is treating Singaporeans. ABN AMRO is treating Singaporeans as second class customers. They compensate Hong Kong customers but refuse to compensate Singaporeans. We should call on all Singaporeans to boycott ABN AMRO for they way they discriminate against us. For those of you who are existing customers of ABN AMRO who are not affected, if a similar thing happens to you, are you sure ABN AMRO will not treat you the same way? Singaporeans, let us boycott RBS / ABN AMRO if they choose to continue this unfair treatment and discriminate against Singaporeans.; July 27, 2009 1:13 PM
Anonymous said...: You have my support.; July 27, 2009 2:36 PM
Anonymous said...: At the beginning of the fiasco I suggested to my friends and relatives that MAS will take care of the problem and I expected nothing less than a fair settlement. Protesting like people in Hong Kong would be immature. I had 100% confident that our government will take care of the people who were cheated with those empty promises. I thought that they would be glad that they invested here in Singapore and not elsewhere because we have MAS. But after making one turn followed by another, I realized that we were just going around in circles. The only "help" we can expect now from MAS seem to be just their encouragements to give up hope. :-((; July 27, 2009 3:55 PM
Anonymous said...: I think the opposition parties also sleeping.. now a chance for them to gain the support of the general populace.. but they keep quiet.. how to win election next time..

They can swing a lot of votes if they are seen to be on the side of the people. Now, people will know that oppositions are just fence-sitters. All talk and No Action.; July 27, 2009 4:39 PM
Anonymous said...: I feel sad for those who lost their money in this saga. How could you ask the government to recind a contract that is essentially a private investment decision between buyer of minibonds and financial institutions? The people of Singapore would be sharper, study the risks and make wise decisions when they know that they will not be bailed out. NO bailout, to do otherwise is to encourage reckless behaviour.; July 27, 2009 5:22 PM
Anonymous said...: I hope it's not too late for MAS to broker some sort of a deal between the FIs & investors who have bought the failed products. Perhaps some sort of a "fund" be instituted to look into some sort of refund of the capital to the burnt investors (we have been using the word "compensation" when actually there is no "compensation" whatsover but actually the "return of the capital invested" This unhappy episode has political implications which the Minister chose to ignore.; July 27, 2009 5:41 PM
Anonymous said...: Quote: am sure MAS is not stupid to understand that in order to suceed as a financial centre, there must be both FIs and customers.

In the west, governments are not allowed/discouraged by their citizens/constitutions to run businesses or own them, because it would lead to a situation where there could be a conflict of interest. If the government owns a bank or have huge shares in it, would it enact a law that would make its bank lose money?

Worse, remember, the salaries and bonuses of some MP's(Board members) and maybe ministers are tied to KPI's and "private bankers" compensation, remember. So would you enact a law that would REDUCE your own salary and bonuses?

I wonder why the western countries's citizens are so against their government owning businesses and running their country like a company instead of benevolent state.
Can anyone enlighten about this.; July 27, 2009 7:11 PM
Anonymous said...: Many people have tried to raise these issues of unfairness in the past, but the same methodology was applied to them. First, it is not published, second, if make more noise, just sweep under the carpet, third, if make even more noise, take action to neutralise you. Now, more and more people when their pockets are hurt then start to realise. where is the fairness to all those brave souls who spent their lives trying to fight for justice and fairness only to be labelled as bad, evil, stupid, insane, psychopathic, etc? We have often been told that our system is the best and that is why the pay has to be the highest. But you can all see that other countries whose leaders are paid much less often do better. This is conclusive evidence that performance has got nothing to do with pay alone. High pay does not mean better performances. The critical difference between HK and Singapore is therefore not the pay of the leaders but the fact that there is a balance of power in the legislature and political scene. This cannot be overemphasized as can be seen even if you patronise a shop. Any shop that has a monopoly will tend to be more arrogant and adopt the take it or leave it attitude. Once there is competition, however, the service immediately improves. So having a balance of power in the govt in Singapore is important, and stop believing the crap that once we do not have a one party system we will collapse. HK is a good example, it did not collapse because they have a powerful opposition, on the contrary, the people's rights are better guarded. In addition, the people of HK are more vocal and made their dissatisfaction known louder. This has played a part, just like the shop example, if you get bad service and chose to ask nicely for a refund, the monopolistic shop owner will just ignore you. However, if you decided to sit outside his shop and shout slogans against his shop, he, as a businessman, will then refund you so that he will not get a bad reputation. It is that simple. Do you all get it yet?; July 27, 2009 7:56 PM
Anonymous said...: The difference is that HK is a real democracy while SG is a tyranny. Many people simply fail to recognise the implications of this fact, and instead blame the opposition for being weak and not credible.

A weak opposition is a direct result of tyranny, to make things worse the majority of people are brainwashed by propaganda and refuse to support this weak opposition. This vicious cycle will result in the tyranny becoming stronger and the opposition weaker.

Until the majority of people wake up and break this cycle, nothing is going to change.; July 27, 2009 9:48 PM
Anonymous said...: Quote: Until the majority of people wake up and break this cycle, nothing is going to change.

Let's say I'm earning millions in salaries and bonuses, would I change the system that is giving me all these millions plus countless directorships....?

Surely I will die die defend it even though I do it by bullshitting, hoodwinking, bullying...etc.

Get it?; July 28, 2009 6:46 AM
Anonymous said...: Rex wishes to comment on two posts:

Post #1 (July 27, 2009 4:39 PM)
"..the opposition parties also sleeping.. now a chance for them to gain the support of the general populace.. but they keep quiet.."

Comment on Post#1: Spot on! Nearly one year had passed and the opposition party apparently are extremely uninterested in this matter. However, I can tell you, at election time, they will suddenly be very interested, and they will just use this matter to fan their popularity. But the critical question is, during the nine months since minibonds exploded, what positive action did the opposition party do? ZERO. Zilch. They are completely differnen kind compared to Hongkong opposition party. I would rather spoil my vote to protest against the incumbent's incompetence than to place another incompetent opportunist into parliament.

Post #2 ..(July 27, 2009 5:22 PM)
"I feel sad for those who lost their money in this saga. How could you ask the government to recind a contract that is essentially a private investment decision.."
Comment: The author of this post is living in a world of his/her own. He/she does not read widely, and does not even know that the minibonds stuff is an unfair contract. Minibonds was generated to mislead, it wasn't a Bond in the first place, and it was linked to CDO's and subprime loans in USA, which was the cause of the global financial collapse. The governments of many countries recognised it and some form of compensation had been worked out like 60% or so. IT is a recognition of the fact that the regulator who supposed to detect unfair contracts, was also partially at fault, so everyone share the blame, which is an honorable solution and no shame. Unfortunately, Singapore government doesnt believe in this thinking. And even more unfortunately as mentioned above, the oppostion party is not competent intellectually to deal with this issue.
REX; July 28, 2009 8:50 AM
Anonymous said...: Hi Mr Tan, want to share with you this related article by SDP too on this matter: http://yoursdp.org/index.php/component/content/article/2597-are-you-sure-democracy-cannot-help-you-financially; July 28, 2009 12:19 PM
Anonymous said...: It has been revealed that a no. of these banks used their untrained bank tellers to promote these structured financial products to unsavvy investors like retirees, housewifes, etc. But it seems a lot of investors from all walks of life were not spared either.

What I find unacceptable is that these bank were unprofessional in that with the prior knowledge of the bank accounts of these investors, there is an obvious breach of using privileged insider information on the part of these banks in approaching such bank customers.

The question is why are these banks not penalised for such misuse of privileged information regarding their bank customers before promoting such investments to them on the pretext of better returns compared to interest rates on saving or fixed deposit accounts.

Suppose some sales or insurance personel were in a position to obtain such financial status of their potential customers from banks before they try to promote their products to them, is there not a direct breach of misusing such information and can be similarly prosecuted.

Remember the case of Citibank sued their ex-staff for pinching customer information from their records. So why were these banks free from such prosecution when there was an obvious breach of confidential information ?; July 28, 2009 5:34 PM
Anonymous said...: Re the mail of July 28, 5:34 pm

Only the first paragraph makes sense.

The other paragraphs... one cannot compare citibank case. Citibank case was when the employees who resigned, made use of Citibank information base when they cross over to other bank. For the minibonds discussions, We are talking of a bank using its own informaion base to ask its customer to buy its own product. generally this is not wrong... if the product is a fair product, like a regular fix deposit. However, minibond is a unfair product, the bank knew it, or at least, some top guy in the bank knew it, maybe not the RM. That is the whole point. We shouldn't digress.
REX; July 28, 2009 9:59 PM
Anonymous said...: Reply to July 28, 2009 6:46 AM.

You said "Let's say I'm earning millions in salaries and bonuses, would I change the system that is giving me all these millions plus countless directorships...."?

Of course the elites earning millions would like to keep the status quo as the current system benefits them at the expense of the majority who are earning much much less. Yet we have a majority 66% supporting the tyranny. Obviously quite a large portion of the lessor mortals are still part of this 66%. Therefore I am referring to this group of people who needs to wake up and vote wisely.; July 28, 2009 10:44 PM
Anonymous said...: Reply to July 28, 2009 8:50 AM:

You said "I would rather spoil my vote to protest against the incumbent's incompetence than to place another incompetent opportunist into parliament".

I suggest you read my post of July 27, 2009 9:48 PM.
By spoiling your vote you are contributing to the weakening of our little disadvantaged opposition because nothing gets changed and indirectly helping the tyranny. As I said, its a vicious cycle.
I hope people like you will realise how difficult it is just to weaken a tyranny, much more to topple it.; July 28, 2009 10:59 PM
Anonymous said...: A friend was cheated by his "friedn" some 45 yeasr ago for $20-$50. Now he still curse the "friend" who cheated him long ago.

Now someone misled u into signing something to protect themself(FA & FI), and then blame all the fault on u. and u may loss $20k to 50K for no fault (or little fault) of yours (was misled into).
U trsut him/her becaues he/she is a FA!!!!!
Now it seemed that you hvae to bear all the loss.
Is it fair?
Can u forget?
And it is a very big sum of money u cannot afford to loss!!! How?; July 29, 2009 7:12 AM
Anonymous said...: On the part about the minibonds not being a real "bond" - it is a synthetic product that mimicks a bond via the use of a CDS (credit default swap)...

However, the devil is in the details and based on the payout, the risk is greatly understated...

And because of the complexity of the structure, I don't think they should be sold to retail clients...; July 29, 2009 11:44 AM
Anonymous said...: From the earlier posting "ABN AMRO is treating Singaporeans as second class customers. They compensate Hong Kong customers but refuse to compensate Singaporeans. We should call on all Singaporeans to boycott ABN AMRO for they way they discriminate against us."

I like to add this: To Singaporeans employees of ABN ABMRO, do you feel proud working for a bank that discrinates against Singaporean and treat your fellow Singaporeans as "second class customers"? Can you be proud to tell your friends, relatives and business associate that you work for such a bank in Singapore? You may want to consider your long term career options and consider working for a more principled bank.; July 29, 2009 6:12 PM
Anonymous said...: If ABN AMRO refuses give Singaporeans the same fair & just compensation as the citizens of Hong Kong, we must set up a permanent Internet blog as memorial, in memory of the "rape" of Singaporeans by ABN AMRO. We should document all the facts from the misleading name "Minibond", the misleading sales brocure, "low risk and easy to understand", "For defensive investors", "High quality & low risk entities have been selected".. etc to how we were misled and then discminated against. This is to ensure and warn other Singaporeans so that they will not taken in again by ABN AMRO. Just like we have the war memorial for our World War 2 victims. This is the least that those of us who have been "raped" by ABN AMRO can do for the rest of our fellow Singaporeans. At least then, our pain will not be in vain.; July 30, 2009 9:38 AM
Parka said...: If MAS thinks that people will forget this incident, then they are too naive.

There are so many victims this time round. And the amount of money lost isn't small.; July 30, 2009 10:09 AM
Anonymous said...: As long as our million dollars paid ministers are not lifting their hands to help FI will just happily smile in silence.; July 30, 2009 10:55 AM
Anonymous said...: The above posts hit out at ABN AMRO but what is more sickening is our own Damn Bloody Sucking bank who compensate HK victims but not fellow citizens. Really, this is much much more deplorable.; July 30, 2009 9:59 PM
Anonymous said...: Besides setting up a permanent Internet blog memorial to help all Singaporeans remember how Singaporeans were "raped" by RBS/ABN AMRO, we should also set up another one to remember the many blunders of MAS and our government in this whole Minibond episode. For their part in causing many ordinary Singaporeans to lose millions of dollars of their life savings which they slog their whole lives for. And for causing them so much distress & for not fighting for Singaporeans to get the same just compensation similar to what the banks gave to the Hong Kongers. Wonder why we elected them in the first place? So that they can protect the banks? I agree that this is something all of us who are inflicted this pain and injustice can ever forget.; July 30, 2009 10:27 PM
Anonymous said...: 诚然，我们的社会是否以诚实和公平的原则去运作是很重要的。问题是，在这里，公平和诚实已经变成了一座装饰的牌坊。想到诚实与公平，不由得让我回忆起许文远“我们都是道德和诚实的人”的说话。当杜莱因为筹款的方式被国家福利理事会质疑而执照未能更新时，卫生部却及时的给杜莱批了三年，让他能够继续挥霍慈善捐助人的善心。对此，许文远从来没有解释，诚实与道德就成为空话。

因此，针对雷曼兄弟迷你债卷，虽然苦主们幸得先生鼎力相助，然而在新加坡的这种环境，其中的艰难是可以想象的。不过，自香港政府秉持良心，和金融机构洽谈出一个更为合理的解决方案 — 向投资者作出60%或者更多的赔偿后，我觉得先生向主持正义的愿望又靠近了一步。那就是星展银行的因素。我想，星展银行岂能够因为迷你债卷而内外有别？既然投资者在香港星展银行能够得到赔偿，那么在本地的，因为星展银行的误导而作出错误投资的人，自然也必须得到相同的待遇。; July 31, 2009 9:38 AM

Monday, July 27, 2009

Honesty and fairness

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