With a wave of the hand, compensation is no more perhaps? MAS looked good as it made DBS do something about supposed mis-selling. DBS nodded its head but soon after, shrugged its shoulders and said that the Minibonds are worth less than toilet paper.
Sounds like a great opportunity to have a toilet roll protest at Speakers’ Corner. Just buy lots of house brand toilet paper, or the those that you buy from the SAF emart, and line it ala anti-Odex protest the other time. The great toilet paper fall in to symbolise the great DBS disappointing Minibond fallout. One could dump the toilet paper on Sunday at a specific DBS branch as protest so that on Monday, staff reporting for work would face a mountain of toilet paper, but the culprits face the risk of being fined for littering.
Singapore DBS says Lehman-linked notes worthless
By ALEX KENNEDY
SINGAPORE (AP) — Singapore’s DBS Group said 103 million Singapore dollars ($68 million) of structured notes linked to bankrupt U.S. brokerage Lehman Brothers Holdings are now worthless.
That’s about a quarter of the amount of Lehman-linked securities sold to clients in Singapore and Hong Kong.
The notes, known as High Notes 5, were linked to the risk of a bankruptcy occurring to one of the reference entities, such as Lehman, DBS said in a letter to 1,004 investors posted on its Web site Tuesday. DBS said it valued the notes by calculating, “among other factors, the price of the reference obligation of the reference entity.”
The letter did not specify what the reference obligation was.
DBS said last week that 4,700 clients in Singapore and Hong Kong bought SG$360 million ($239 million) in Lehman-linked structured notes from the bank.
In Hong Kong, the total outstanding amount of the Lehman-linked products sold by all banks is 20.2 billion Hong Kong dollars ($2.6 billion) while Singapore investors bought around $400 million.
DBS said last week it would pay up to SG$80 million ($53 million) in compensation to investors who received poor service, but Tuesday’s letter did say anything about this. Singaporean investors, including retirees, have said bank officials did not properly explain the nature of the notes.
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DBS, pressured by MAS, is making promises of compensation to the retired and the needy who were “misled” into buying High Notes 5. I am trying to follow the topic as best as I can and the first thing that jumped out to me was that the government is caving in finally to public cries. DBS is also seeing this as an expensive publicity campaign of a people’s bank, something which it never really took on when POSB disappeared and appeared again years ago. It should be in DBS’ strategic interests to woo the public as Singaporeans would surely buy products via DBS and place their deposits there as a result from now on because of the expensive guarantee gestures by DBS. At the very least, DBS would be more stringent on its sales tactics in future as they would not want to repeat this costly buy-back exercise.
The obvious problem now to all is what is fair compensation since DBS might not compensate all, or compensation might not be enough, or compensation might not be in cash even. There will be hordes of minibond customers who would claim that they were misled into thinking that their structured products was as safe as a term deposit. DBS CEO Richard Stanley, who came over from Citigroup China early this year, has dark difficult weeks in front of him. What a tight thin line to balance to compensate and win hearts without digging deep into the purse. DBS shareholders might not be too happy.
The government is expected to use this DBS minibond fiasco as a perfect example that it listens to the people, which is not far from the truth frankly. I’m certain MAS would have stepped in eventually and it is just a matter of when. However, it is difficult to say but they might have acted slower if Tan Kin Lian from TOC had not gone on his song and dance routines at the Speakers’ Corner to lobby and lead a public-spirited cause.
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With JB Jeyaretnam sadly out of the picture, what would the opposition scene be like? The Reform Party, rhetorical old wine in new bottle like it or not, would have provided an interesting renewed challenge to the PAP in the coming elections.
Even in his death the vindictive PAP were not gracious enough to acknowledge fully his contribution to the discourse and tried to distastefully politicise the letter of condolence to JB Jeyaretnam’s family. Their political folly resulted instead when a genuine dignified condolence would have won them respect grudgingly. But the temptation of politicising his death was maybe not restricted to the PAP. The SDP have shamelessly propped him up as a rallying banner, just as El Cid’s body was in the battle for Valencia in 1099.
Nevertheless, the outpouring of kneejerk heartfelt euologies with the passing of JB Jeyaretnam and the posthumous decoration of a stalwart to the point of him being a de facto national legend is perhaps a bit too much, or perhaps it is just more convenient to do so in this social networking media age. I don’t remember David Marshall or Devan Nair having this sort of this Che Guevarisation . Nevertheless, one explanation is that JB Jeyaretnam more than any person romantices the idea of never surrendering despite being cornered and cracked at every political turn. He certainly deserves tremendous respect and recognition for his steadfast determination to offer change to Singaporeans. Sadly not enough of us bought his vision although Don Quixote he was not.
The late Devan Nair aptly described him, likely with a bit of dramatic flourish, and Lee Kuan Yew’s irate frustration with the man who demolished the notion that the PAP cannot be defeated until 1981 -
“Look,” he said, “Jeyaretnam cant win the infighting. I’ll tell you why. WE are in charge. Every government ministry and department is under our control. And in the infighting, he will go down for the count every time.” And I will never forget his last words. “I will make him crawl on his bended knees, and beg for mercy.”
Jeyaretnam was made of sterner stuff. To his eternal credit he never did crawl on bended knees, or ever begged for mercy.
The late JB Jeyaretnam was indeed made of sterner stuff. Sued, slandered and often silenced by the local papers until lately, he still held on and bounced back, as we can see in the eulogy meme by bloggers these few days. Unlike some opposition members, he insisted on a confrontational robust style in parliament. Unlike some opposition members, he did not court foreign organisations for support. That is why we like JB Jeyaretnam so much in retrospect. He was the best of the opposition in this heroless age, and I mean no disrespect to the current cohort of opposition parliament members intended.
Absence does make the heart fonder.
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