AnnouncementAll investors in credit linked securities are invited to attend a meeting at Speakers’ Corner today, Oct 18, at 6pm. There will be two short speeches by Tan Kin Lian (in English) and another speaker (in Mandarin). Visit Tan Kin Lian’s blog for more.

Andrew Loh / Deputy Editor

Anyone who has been following the unfolding saga of the chain of events resulting from the collapse of Lehman Brothers would be scratching his head. He would be questioning what the Monetary Authority of Singapore (MAS) is doing – or not doing – and why it is not leading but following.

From the get-go, the MAS seemed to be lost – lost in how to deal with the financial and credit crisis, lost in how to deal with aggrieved investors who are clamouring for redress, and lost in providing leadership at a time of uncertainty.

Perhaps I should have already noticed this when Mr Tan Kin Lian went to the MAS’ office in Shenton Way to deliver a petition on behalf of the investors two weeks ago. I was there to meet Mr Tan who had gone in earlier to deliver the petition. While waiting for him outside the building, I was approached three times by security guards and by a lady who said she was “from the comms department”, meaning their corporate communications department. She obviously was quite concerned that I would take photographs of the building or of any proceedings from that meeting Mr Tan was having with the MAS.

She asked me twice if I were from the media and kept reminding me that no pictures were allowed and that this was “our premises”. Seeing how uncomfortable she was with me waiting there (and how one of the guards kept looking in my direction), I asked if it was better if I waited somewhere else. She replied that if it was more comfortable, maybe I should. I chose to stay put.

Perhaps that was a sign of the chaos and fear, one would imagine, within the MAS. In the weeks following that encounter, many things have happened, which has led to some people questioning the actions of the MAS.

As fellow blogger Lucky Tan  said, our Government seem to take their cue from the Hong Kong Government, keeping one step behind, sometimes two.

When the saga first broke, the MAS was rather dismissive of investors’ complaints, telling them to go settle it with their banks individually, in contrast to the Hong Kong Government’s tough stance on the banks which had sold the structured products to unwary investors. In fact, the chairman of the MAS, Senior Minister Goh Chok Tong, irked many when he later advised that “that’s life, if you want good rewards, you have to take risks. Otherwise, leave your money with the CPF.” Some I spoke to were quite upset at those words.

The MAS then told the banks (the same banks which investors are complaining about) to appoint their own “independent investigators” to look into the merits of the complaints. When this was met with protests from investors, the MAS made a u-turn and decided to appoint its own investigators instead. And as Lucky Tan also noted, this was done without the MAS meeting a single one of the investors affected.

When the Hong Kong Government announced that they were providing guarantees for bank deposits, the Singapore Government reassured Singaporeans that our financial and banking systems were sound and, as many understood it, the Government was not going to do the same as Hong Kong by providing guarantees for bank deposits. The very next day, however, the Singapore Government made another u-turn of sorts and declared that it too would guarantee bank deposits in Singapore- an unprecedented move in our 43-year history as a nation. This however is being met with some questions: Is it because the Government cares about Singaporeans’ money or that money, by the millions, will flow out of Singapore? With the markets in flux, depositors would naturally want to park their funds in territories or countries with such a guarantee, wouldn’t they? It doesn’t take a genius to figure this out. So the question is why the hesitation on MAS’ part when Hong Kong (and several other countries) already adopted this measure?

In the latest development in the saga, the MAS again took its cue from Hong Kong, it would seem. The Government in Hong Kong has launched investigations into the possible mis-selling of the products. A day after, the MAS announced, in a press conference, that it basically is going to do the same.

Perhaps what the MAS will be doing next is to – again – follow Hong Kong’s lead. Hong Kong has given the banks there an ultimatum to respond to its proposal to buy back the structured products from investors and it also said it was ready to top up the legal funds pool which aggrieved investors could use to initiate legal proceedings against the banks. This is something which is quite unthinkable in Singapore and to my memory, nothing of this sort has ever happened here.

In the light of the depressing lack of leadership from the Singapore Government, it is left to the investors – and public-spirited individuals such as Mr Tan Kin Lian – to do what they can to seek what they consider justice and fairness.

As for the MAS, one would hope that more initiative would be forthcoming. Else, in the words of Lucky Tan, despite paying our ministers the highest salaries in the world, Singaporeans would be given “no leadership in times of trouble!”.

Thus far, the MAS looks more like a headless chicken desperately dashing around than an authority providing certainty in leadership.

I think 10,000 investors deserve better.



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