Wednesday, October 24, 2012

Early action could have reduced losses

21 October 2012 

Editor, Forum Page
Straits Times

I refer to the letter from Ms. Angeline Fernandez, Director (Communications) of the 
Monetary Authority of Singapore ("MAS spells out regulatory criteria, ST. xx Oct 2012") 

Ms. Angeline said that MAS does not regulate schemes that involve investors
acquiring physical assets, such as property, gold, art or wine.

I understand that the property or gold schemes involve more than the acquisition of
the physical assets. There is a guarantee of a buy back of the assets for the invested sum
 and the payment of an attractive, guaranteed rate of interest. 

These schemes are more akin to taking of money on deposits with the promise of
payment of interest and capital, 

Most of the investors would not have invested in these schemes, if it did not carry 
these promises on the guaranteed payments.

MAS is responsible to regulate companies taking deposits. It issues licences to 
banks and finance companies to carry out this type of activity and supervises their
business. MAS should not have allowed other businesses to take money from the public 
with similar promises, without getting a licence from MAS.

MAS knew about the activities of these companies but decided to put their names in 
their website under its Investor Alert List. If MAS had investigated these companies at that 
time to find out if they are infringing the law on deposit taking, it was likely that these activities 
would have been stopped earlier, when fewer people were involved. 

Tan Kin Lian

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