Lim Chih Yang / Writer
There is a saying that “silence is golden”. The recent financial turmoil unleashed initially in the global financial system and the changes in oil price has made the silence of the various institutions and bodies in Singapore deafening.
Now let us first consider the hot topic of the day – investors who lost money in the Minibond crash. The background of the Minibond saga should be familiar with most of the readers and thus do not bear repeating here. It is estimated that about 10,000 investors in Singapore lost about $500 million in this particular investment.
The investors in this particular product may hail from all walks of life but it is to The Straits Times credit that they highlighted a group of people within the investors that we are most sympathetic to – that of the old retiree. By putting a face to the investors, we could perhaps empathize with these folks knowing that they could be the friendly next door auntie who has scrimped and saved her entire life only to lose her life savings overnight.
In a similar development, over the last two weekends, Mr Tan Kin Lian held various speeches at Speakers’ Corner highlighting the plight of the investors. To his credit, Mr Tan did not just engage in speaking but also acted by helping the investors by providing for them avenues and means to address their concerns. The fact that he has managed to get a lawyer to help the investors and organized an online petition highlights his seriousness in seeking redress for these investors. Granted, not all investors are financially-illiterate and in the dark about the risks of the product but nevertheless there is a need to address the issue of mis-selling by the banks to ensure that any genuine victims are given opportunities for a fair hearing at seeking compensation.
Disinterested and silent
Given the magnitude of the losses, it is strange to see MAS initially appearing to be disinterested in the saga. As a regulator, should not the MAS take a more pro-active role to determine if there had been any breaches in the banks’ financial compliance? It would appear that MAS seems unsure of the appropriate response and seems to be taking the cue from various foreign central banks. Another body that has been strangely silent is The Financial Industry Disputes Resolution Centre Ltd (FIDReC). The mission statement of FIDReC says,
“To provide an affordable alternative dispute resolution scheme that is independent and impartial, so as to encourage and assist in the resolution of disputes between consumers and financial institutions in an amicable and fair manner”
Unless one has been hibernating the last few months, it is hard not to be aware of the Minibond saga. Why has FIDReC been silent on the issue thus far? Given the breadth and depth of the minibond losses and its impact on Singaporeans of all walks of life, should they not take a more pro-active position in requesting for all aggrieved investors to register as a group with FIDReC so that their concerns can be addressed? Why does it require a retiree to rally the investors and hold speeches at Speakers’ Corner before the various bodies are willing to take notice? It is sad that in such desperate times, the leadership that is expected of a highly paid government and its ministers is sorely missing, while the action of an unpaid retiree is reaping the desired results that the investors are seeking.
Another institution that has been surprisingly silent is The Consumers Association of Singapore (CASE). As we are all aware, oil price has dropped from a high of US$145 per barrel in July 2008 to a current price of about US$75 per barrel, any company that is remotely dependent on oil has used high oil prices as a reason for price increase. Comfort Delgro had in July claimed that high oil price necessitated the introduction of a fuel surcharge to help taxi drivers alleviate their cost. While I am in no doubt that taxi drivers work long and hard hours for their income in these difficult times, there are also many people who are affected by the fuel surcharge but have no choice but to take taxis out of necessity. Given that the prospect of a sustainable low oil price is forecasted in the short-to-medium term, should not CASE take issue with the various taxi operators at lowering their taxi fares to help alleviate the recession that many Singaporeans are facing?
It is said that desperate times calls for desperate measures. The silence of the various institutions created to provide the ordinary folks with a low cost means to seek a hearing is deafening. If FIDReC had acted soon enough to provide the platform and avenue for the investors to address their grievances, would it have been necessary for a retiree to spend hours in the sun rallying investors, engaging lawyers and organizing petition? The time, money and effort could have been better utilized in other avenues. Should not CASE seek to ensure that the various companies which had cited high oil price as a reason for price increases not similarly reduce their prices given that fall in oil prices?
We are face with many what-if scenarios. Should the various institutions continue to play a silent by-stander, wait-and-see attitude, Speakers’ Corner may not be big enough to accommodate the growing number of discontented citizens seeking a voice for themselves. Silence is not always golden – not when one’s rice bowl is at stake.
Cartoon from My Sketchbook. Click on cartoon to enlarge.