 Print Article
|
The Monetary Authority of Singapore (MAS) has directed financial institutions that sold the products to appoint independent parties to oversee 'their complaints handling processes and investigations into any mis-selling'.
'The independent party is to assure investors that their complaints will be heard, documented and reviewed fairly and swiftly.'
Meanwhile, about 200 disgruntled investors met outside the National Library after being rallied via blogs and Internet forums.
They compiled a petition that was later presented to the MAS. By late last night, they had collected about 600 signatures - 95 on paper, the rest online.
The controversy centres on the investment products DBS High Notes 5, Lehman Minibonds and Merrill Lynch Jubilee Series 3 LinkEarner Notes. The Lehman collapse has hit these products hard.
DBS Bank distributed the High Notes 5 while the Minibonds were sold by several local and foreign banks, brokerages and Hong Leong Finance.
The MAS said it has asked DBS to 'appoint an independent party to review the computation of the payout to investors of the DBS High Notes 5'.
Separately, it asked HSBC Trustee to 'expedite the resolution of the issues relating to the Lehman Minibonds'.
HSBC Institutional Trust Services (Singapore) was the trustee for Lehman Brothers' Minibond programme.
Industry sources said the MAS acted after receiving many queries and complaints from investors in the structured products.
MAS also said that it will work with the Financial Industry Disputes Resolution Centre (FIDReC), the independent parties and financial institutions.
It said: 'This is intended to fast-track the process for investors to seek mediation and adjudication of their cases.'
In a statement last night, DBS said that despite having already set up an investor care centre, it will also appoint 'independent external consultants to review complaint handling and the final credit event redemption amount for High Notes 5'.
While these high-level moves were going on, investors outside the National Library were compiling their petition.
It stated that the 'group of very concerned investors who have bought into...Minibonds issued by Lehman Brothers' felt there was 'misrepresentation in the marketing of the product'.
The petition called for MAS to lobby Japan's biggest brokerage, Nomura Holdings, to 'take over the Minibonds as a pre-condition for granting' it a licence to operate in Singapore.
Nomura has agreed to buy Lehman's Asia-Pacific arm as well as its equities and investment banking units in Europe and the Middle East.
The MAS was also asked to 'explore negotiations with all other parties...so that (Minibonds) have a chance to run till maturity'.
It also urged the MAS to instruct HSBC Trustee not 'to force liquidate any series of the Minibonds without consulting the investors'.
Two investors, who only wanted to be known as Mr Lai and Mr Lingam, gave the petition to a Straits Times reporter outside the MAS office at 9.30pm. It was subsequently handed to the MAS.
Minibond trustee engages investors
THE trustee for Lehman Brothers' Minibond programme has stepped up moves to communicate with affected investors.
HSBC Institutional Trust Services (Singapore) said on Tuesday: 'As there is now a situation of non-payment of the interest due on Sept 22 by the issuer for Minibond Series 5 and 6, (we) felt it was important to inform investors.'
Last week, Lehman sought bankruptcy protection, a move that shocked local investors of its Minibond products. Lehman structured the notes for the products.
Only Series 5 and 6, issued by Minibond Limited, a special purpose vehicle set up in the Cayman Islands, have failed to meet their scheduled interest payments. Minibond Limited has not defaulted on payment under any other series of notes
HSBC Institutional Trust Services (Singapore) has published various notices in The Straits Times to explain that its role was to 'enforce the rights of the noteholders on their behalf if there is an event of default'.
It added that Minibond Limited - the issuer of the Minibond series - still has 15 days to 'remedy the situation before any action can be taken to sell the underlying securities for those series'.
This means that if no payment is received by 15 days from Sept 22 to Oct 8, the trustee can start the process of selling the assets to recover some money.
HSBC's trust unit also said that it is 'not a party to the notes except in that capacity' as note trustee. In other words, it is not the issuer.
It has posted a set of frequently asked questions to assist noteholders on the website www.hsbc.com.sg
