XI'AN (China) - SINGAPOREANS aggrieved by their investment in Lehman Minibonds and DBS High Notes 5 will have their complaints handled 'fairly and properly', Prime Minister Lee Hsien Loong assured on Sunday in his first remarks on the issue. He said it was understandable that some investors had reacted emotionally as they lost their money in a sudden and unexpected manner, while others felt that the risks had not been adequately explained to them.
But ultimately, the banks do realise that it is in their interest to resolve the matter quickly and not let it drag on, he told reporters in the western Chinese city of Xi'an where he wrapped up his five-day visit to China.
'The banks have what they call reputational risk,' said PM Lee. 'In other words, if you do the right thing, your customers will remember you for a long time.
'If you do the wrong thing, customers and potential customers will remember you for a long time. The banks and financial institutions know this and have every interest in sorting this out expeditiously and fairly.'
In Singapore, about 10,000 retail investors have invested over $500 million into structured products linked to now-bankrupt Lehman Brothers. DBS Bank, Hong Leong Finance and Maybank said last week that they would look into complaints and fast-track vulnerable cases, prompting some investors to worry that they would be left out.
The Prime Minister repeatedly stressed the notion of fairness during his lengthy remarks on the issue yesterday, and added that instances of mis-selling would be investigated.
Mis-selling, at its simplest, means giving the wrong advice to potential investors. Beyond that, it can also mean a failure to help clients diversify their assets, non-disclosure of risks or not completing a proper fact-find to ensure the product being sold suits the customer.
Said PM Lee: 'Where there has been mis-selling, it has to be put right.
'Where there has been less than professional behaviour by the relationship managers, or where things don't measure up to the standards that the Monetary Authority of Singapore (MAS) expects when you promote the financial products, then the banks have to do the right thing.'
The MAS said on Friday that it would look into complaints of mis-selling, and added that an imminent review of the structured products industry would address such issues as better descriptions and labelling of products, as well as more professionally trained relationship managers.
It is encouraging for the Prime Minister to emphasise on fairness. I hope that fairness has to be seen in the eyes of the aggrieved person. It will be difficult for the aggrieved person to feel that he (or she) has been fairly treated, unless the matter is settled through mutual agreement or by a fair, independent adjudication.
Some businesses hold the view that there are 4 million customers and if a few of them gets angry, there are other customers for them to tap. They also think that customers have short memories.
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10/26 - 11/02
- Compare toxic financial product with melamine
- Why are banks allowed to sell structured products ...
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- Scuffle in HK Protest Over Lehman-Linked Products
- Speaker's Corner - 1 Nov 2008 5 to 7 pm
- Speaker’s Corner 1 November 2008 - Speech
- Use your real name
- Educate the public about the structured products
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- Petition #4 - Review Complaint Handling Process
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