Martin Lee @ Sg
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What Will Happen to my Lehman Minibond?

The minibond series by Lehman Brothers had been sold in Singapore for the last couple of years and some retail investors have purchased them. In the recent uncertainty facing Lehman Brothers, many of these investors are now wondering what will happen to their Lehman Minibonds investment.

First of all, recall that the Lehman Minibonds is not a normal bond in the normal sense of the word. It’s a structured note which exposes you to the default of the reference entitles and has assets backed by the underlying securities (which are different from the reference entities).

The money you gave to Lehman Brothers is used by them to purchase the underlying securities and enter into contracts for interest rate and/or currency swap. They also sell credit default swap on the reference entities.

The swap counterparty is Lehman Brothers Special Financing, Inc.

A few months ago, I was particularly concerned what the underlying securities of my Lehman Minibonds were. I wanted to know the extent they were affected by the current credit crisis and whether my principal would be affected. At that time, the worst case scenario I thought possible was that the underlying securities had enough credit default events which would result in a significant loss of capital (This is different from the default of the reference entities which was the one heavily marketed).

Well, I certainly didn’t factor the collapse of Lehman Brothers as one of the scenarios.

So, what will happen to the Lehman Minibonds if something happens to Lehman Brothers? There are a few possible scenarios.

1) There is no bailout and Lehman Brothers goes under

According to the pricing statement of the Minibonds, the notes might be redeemed early if the swap arrangements for the notes are terminated for any reason. This is likely to happen if Lehman Brother collapses.

The swap will terminate and the notes will redeemed early in an amount equal to the liquidation value of the underlying securities plus/minus the swap termination value. Lehman will have a claim for any swap termination value owing to it. The creditors of Lehman will have no direct claim to the assets of Minibond.

The liquidation value is an unknown but when I checked the market valuation of my Minibonds a few months ago, it had a face value of around 80% of the purchase price.

2) Lehman gets taken over by another party which assumes their Minibond Obligations

In a takeover, it is likely that the acquirer will have to assume all of Lehman’s obligations. They will then take over the swap counterparty role of the Minibonds. In this scenario, nothing would have changed for the Minibond holders.

3) Lehman gets taken over by another party which does not assume their Minibond Obligations

In the unlikely event that the acquirer does not take over the obligations of the Minibonds, the notes will be redeemed in a way similar that described in 1) above.

It will take some time for any takeover of Lehman Brothers to be completed as you can imagine the acquirer will have to look into all the obligations of Lehman Brothers, with the Minibonds just one very small component of it.

Added: You can contact the HSBC Institutional Trust Services for updates. The hotline is 62167449.

Added more updates: Minibonds Update

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905 comments
Jasmin says 13 years ago

What if there is no compensation after some months (Oct till mid Jan) of waiting?
Do not be surprise that this might be the outcome awaiting.

I dread of going through legal actions because there is no guarantee that we will recover something but it is confirmed we have to pay legal fees.

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angrymum says 13 years ago

Are we all waiting for the bomb-shell by mid-January. I dread to receive news that we would be compensated only 10 – 20% of our investmnent… what then, if this scenario unfold. What’s our next course of action.

angrymum

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Jasmin says 13 years ago

Mine (LB series 2) was bought using joint-names with my spouse.
The purchase of this toxic waste was a painful lesson to be learnt.

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Joyi says 13 years ago

Hi, I was informed by the IFA that the purchase of Minibonds cannot be in joint names. As such, though my mom is already 70 years’ old, my case cannot be classified as under the “vulnerable” group. This is clearly another wrong info provided to me, as I only realised now that it could be bought in joint names. This has caused nightmares & miseries for past few months …….. our case have been dangling in the air and I doubt we could get back anything in the end, as economy is really getting from bad to worst !

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Steve Tan says 13 years ago

Hi, have been monitoring the news since after my mom have invested $40k into MB3. It is money left to her by my dad who had passed away. In fact, she is taking quite by heart. But given the current situation, I know all we can do is wait. Have to admit I am the one who ask her to buy it on the simple minded theory that mini-bonds are money collected together to lend to the banks and will only suffer loss if one bank goes under and only lose the money that are loan to the bank. Also have been deceived by the brocehures that it is guaranteed. Had asked the FA who said also it is guaranteed.

But I really would like to know from investors who have invested in MB3 what is the current status? Do we really have to wait till MB3 defaulted on the interest before the unwinding starts?(Selling of MB3 to some one)

OK I admit I have not filed a complaint to either Hong Leong or MAS or whatever. Reason? I am not good at talking and will tend to shoot the wrong thing, the end is rejected by Hong Leong.

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    lioninvestor says 13 years ago

    Hi Steve,

    unfortunately, due to legal issues raised, it might take a couple of years before unwinding can take place. And even then, we might not know whether we will be getting any money back.

    Other than waiting, the only thing you can do is to file a complaint, no matter how high (or low) the chances of succeeding.

    Reply
    183 says 13 years ago

    Steve,

    If your mother is above 62, according to media report in early nov, HLF will refund full minus interest paid when the series is defaulted. If you are joint account holder, may be they will take a cut. So go to Tan Kin Liang’s blog to download the form in 2 lingo, and get it prepared. You dont have to wait till it defaulted, send it to HLF by registered post and e-mail immediately. Take note of the risk level the RM classified the product sold to her in the form your mother signed, and state clearly whether or when you receive the full prospectus?

    Form:
    http://www.tankinlian.com/forms/complaint_form.pdf

    If you can express better in Chinese, do it. I am sure HLF has a lot of Chinese competent officers.

    Also refer to this link:
    http://creditlinkedsecurities.blogspot.com/2008/10/distributor-hong-leong-finance.html

    You may also seek advise / help from HLF Investors Group. The contact is
    [email protected]

    All the best.

    Reply
Jasmin says 13 years ago

Any local lawyers operate on “no win, no pay” basis? This is the best because the lawyers’ interest is aligned with the investors’.

Pardon me, I think it may not be realistic to fight in a US court.

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    VSL says 13 years ago

    SG does not have the culture where lawyers work on a “no win no pay” basis. One would be hard-pressed to find such a local lawyer. Besides, which local lawyer is an expert on cross-border litigation?

    The US is full of such lawyers. If (and it is a big IF) our case can be lodged in the US, it will give us the best chance of recovery. Perhaps James Spader of Boston Legal is our answer 🙂

    Reply
VSL says 13 years ago

A US law firm has approached investors in HK (and possibly SGP) to represent their class action suit in a US court. Does anyone know who this US-based lawyer is? Though Lehman is bankrupt, the lawyers plan to go after Lehnam’s directors, their wives, mistresses, in-laws etc to try to recover the money. I believe our chances of recovery are higher if our case is heard in the US instead of SG. We need to chk first whether our case can be heard in the US, as that is where the product was created.

Another US law firm by the name of “Coughlin Stoia Geller Rudman & Robbins” was mentioned in a recent website.
Their website is http://www.csgrr.com/.
Glancing thru their website, I think this US law firm is super. They are experts in cross-border securities fraud. They have recovered billions of $$$ for Enron shareholders and received only about 10% of it as legal fees. They get paid on a contigency basis, with the % determined by the US court. Even if they were to get 20-30% in legal fees (due to case complexity etc), I still say it is worth it. They operate on a “no-win, no-pay” basis. This is unlike several local lawyers who charge up to S$400/hr just for consultation.

Coughlin Stoia is now working on a case of Citigroup investors against Citigroup. The complaint is at http://www.csgrr.com/cases/citigroupmortgage/complaint.pdf. It mentions mis-selling, non-disclosure of material facts etc. This case mirrors that of Lehman Minibonds. A SG investor has already contacted Coughlin Stoia with a brief of the Minibond saga, and is awaiting a reply.

In view of the numerous rejection letters we are receiving from the FIs, and the non-willingness of Fidrec to handle cases substantially greater than $50k, I see no other option than a lawsuit. MAS has taken all of us for a long ride to nowhere.

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Frustrated says 13 years ago

I think the no of default of the underlying securities would still remain at say 10 or 11 for the credit event to take place.

The figure was worked out at the time of launch of Minibond where the assumption of the remaining underlying securities not yet default at value between at 50% or 60% of $1.

Now, with the market value of the underlying securities at their all time low [with mark to market rule with practically no taker], I would opined that all it takes is 3 to 4 default of these underlying securities will trigger the credit event.

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Ryan says 13 years ago

Hi 5D,

I do believe that there is some residual value left in the Minibonds, especially that of the series 9 and 10 and also other series which have some coporate bonds in there. The reason Lehman lawyers are challenging to claim rights for this derivative contracts is because they are keen to sell off the underlying assests of the contracts to pay off their creditors asap. However, I still hold a small hope that the US court would not let them do so as this will affect hundred of thousands of institutional and retail investors globally and will attract worldwide criticism and unrest. Lets pray that the US court do the right thing and rule against lehman to disallow them to have any claims on those derivative contracts that they have entered into b4 they file for bankruptcy.

Unfortunately, it seems the last resort is the only resort left. I have choose to ignore MAS recommendation to approach the FIs from the very start. Pestering my MPs, MAS and HSBC is my approach.

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    5D says 13 years ago

    Hi Ryan,

    As you pester MAS and HSBC, think of one more question also.

    Just like the opposite of what the US bankruptcy lawyer did, do we need to file any claim in the US bankruptcy court? In other words, do we think Lehman owe us something? And, who is looking into this on our behalf? MAS? HSBC? No body?

    5D

    Reply
5D says 13 years ago

With the news about US bankruptcy lawyer asserting their rights and local report of the legal process may take 2 years, my thinking is that could be good. Why? Because if we make that into 3 years, the Minibonds would have reached it maturity and then we don’t have to go thru the unwinding process (which is about worthless as Kenneth mentioned). And, all it takes is someone throw in a small legal curve ball to drag it out from 2 to 3 years.

This Hold to Maturity approach still bares two risks. One is 1 of the 6 reference entity defaults. The chance is much lower now as everyone, even Hank Paulson and Bernanke recognizes that it was a mistake to let Lehman go bankrupt which set off this global financial fiasco. I think history will give credit to Greenspan for saving Long Term Capital (at all costs at that time) and Paulson and Bernanke did just the opposite. Another reason you cannot just unwind is investors in Minibonds are actually insurance companies as we are now finding out. So, if we were life insurance companies and the insured has developed cancer, how much would it cost to unwind the insurance contracts? It would be very expensive, if not impossible. That is another way of saying Hold to Maturity is the only choice if we want to have some real money back.

Then, there is a second risk which is in the underlying basket of securities (about 150, varying by series). If a part of the securities (say 11, again, various by series) defaults, unwinding will take place. It seems like with the assignment of the 3 receivers may eliminates or delays this 11 limit. The chance of a small percentage of the underlying securities going bad is real (10%? Fill in the blank yourself) but the whole basket going to zero is unlikely.

Then, the third risk is the contingency of whether we can locate the basket. That, I hope the Big-4 CPA consultants could let us know quick if they are not under the control of HSBC Singapore.

This does not mean people should stop the complaint/Fidrec process to claim their losses if they have been mis-sold. What I am saying is don’t under-estimate the residual value of Minibonds and don’t assume the $375 million invested by the 8,000 investors are now worth zero. And hence, we should work towards this to recover the most for the investors on top of any mis-selling people can claim. I would like to hear from the experts in this forum to validate this thinking.

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Kenneth says 13 years ago

As of today’s report, Minibond series is as good as dead as any effort from HSBC institutional trustees for new swap gurrantor just got blocked by Lehman bankruptcy lawyers.

Unwinding? With the experience from Pinnacle, DBS high notes and Jubilee notes, the notes are worthless especially when the US & global market is in such a bad state.

I have a standard registered reply letter from Philips Securities rejecting my complaint. Basically it is saying you signed the document and you took the risk. Not happy with reply then go to FIDReC.

Regards,

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    Leon says 13 years ago

    Me too as well.

    Received a registered letter from Phillips rejecting my complaint. same answers I had. Looks like they are just going thru the formality. Very disapointed with their reply as they bluntly put it.
    The key point is still that we’d been misled into buying a risky product which was claimed to be low-risk. Since they are the intermediary sellers, FI/they have to take responsibilities.

    keen to team up to look at alternatives together?

    Leon

    Reply
      Kenneth says 13 years ago

      Hi Leon,

      Do give me your email address and in the event a class suit materialize and need support, I can contact you for your interest.

      Mr Tan Kian Lian is also talking to 2 x senior lawyers on case against FI / Lehman when he updated us last sat at Hong Lim Square.

      Usually we meet at Hong Lim Square in each brokers’ house investors’ grouping and discuss. Next meeting I believed will be 13 Dec. I wonder what happen to DBS High Notes? If these 1400 people can do nothing with DBS, then our Minibond case is as good as dead.

      As of now, I am slowly withdrawing my accounts from Philips Securities and decided the best person to protect your investment is yourself.

      Regards,

      Reply
Jasmin says 13 years ago

Hi patrick,
So far, I did not attend any interview because I did not see the point to meet the FI at their convenient time.
Some days ago, I received a letter from Maybank seeking more time for their investigation. I sent an email to ask them to expediate my case. I am unsure if delaying trick has been used. I just want to get an answer and move on.

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Patrick says 13 years ago

Not sure if this discussion is still alive.

In short, i’ve received a notification by my FI, Mayback, to head down to their HQ for an appointment. This, after i have written them a formal email complaint in early Oct and phone interview in late Oct.

Anyone received similar invitations? Am afraid it’ll be just a ‘formal’ announcement of the rejection.

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Jojo says 13 years ago

Pardon my outsider view, anidst all the emotions of the investors of minibonds and the kind people trying to help them get the money back, I think the situation really cannot be resolved immediately. Here are my 2 cents view:

From my understanding, HSBC is the trustee of the minibonds, they do not control the underlying assets. All proceeds from minibonds were invested by Lehman, the arranger, in credit markets. These credit assets should still be lying somewhere inside Lehman (not with HSBC), although few people will know the value of the underlying assets. I am therefore surprised the HK financial secretary can say that HK investors would get 60% of their principal back.

Unless this financial secretary have been briefed by Lehman’s administrators, there is no other way to know the market value of the credit assets. And if he is estimating the salvage value for the minibonds, that is also quite surprising, as it is unlikely anyone would want to take over the minibonds given that Lehman’s assets are frozen by the administrators. Even hedge funds who have billions of deposits with Lehman are not getting their assets back for many months, so why would someone want to risk buying the minibonds, which is a claim (not sure if it is direct, have to check the legal documents of the minibonds) to the credit assets now controlled by Lehman’s administrators?

Second, Lehman’s accounts are in such a mess: just this morning, FT reported that China’s Chinalco who used Lehman as trustee to keep shares Chinalco bought in Rio Tinto, have been told by Lehman’s administrator that the shares “could not be located”. Another private equity firm used Lehman to safeguard US$700m of shares in another company, and are fighting with administrators to get it back.

The best outcome is for the MAS to press Lehman’s Singapore administrators (assuming these are local firms and not the ame ones for Lehman in the US) to deal with the minibond assets quickly and either return the underlying assets or cash realised to investors. Or secondly, to press the FI who sold the minibonds to compensate investors by giving back their fees. But the latter would be very low, maybe 3% to 5% max.

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VSL says 13 years ago

An update on my earlied post.

Got a call from HSBC Trustee. Currently they have NO plans to liquidate any of the defaulted series. It is unlike what happened to Jubilee 3. This provides us with a breather.

Apparently a few parties are interested in taking over the role of swap counterparty. It may take weeks or pehaps months for them to evaluate. HSBC has not given them any timeframe to make the decision.

As to whether HSBC will force liquidate without noteholders’ consent, she said that HSBC will cross that bridge when it comes.

I have reiterated this point with my AMK GRC MP at a recent mtg. Mr Wee Siew Kim said he will bring this up to MAS and at the next parliament sitting on 20-Oct Mon.

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    Dan says 13 years ago

    Hi VSL,

    HSBC is currently considering between option of a swap counterparty replacement and worst case liquidate it. But I was told that if no one else wants to take over, it will be liquidated in a matter of time. Currently, it seems that there are no comfirmed party yet for the take over, HSBC told me that they are now geting valuations for all the series of the minibonds.

    HSBC will talk all investors into liquidating, stating that it is only the best option available.

    I am doubtful that HSBC would go all out to safeguard the investors interest. That’s how I feel.

    I think the more promising action we investors can take would be either to go for statutory declaration or as mentioned yesterday by a lawyer to go for class action suit.

    Reply
    PT says 13 years ago

    I understand that most of your MP are at least kind enough to do a record. Our Hong Ka GRC Dr Amy Koh said there is nothing they can do. Not even a record!

    Reply
      Dan says 13 years ago

      Hi PT,

      Currently, the situation has blown up and getting messy with several suggestions going round. And I think it will take a long time for any resolution to take place too. We investors must not give up, we must focus on what we believe in or else time we will get nothing out if it, maybe peanuts the most !

      Let’s see what MSA & FI can do now, Mr Tan Kin Lian has publicly written in his blog urging them to take actions for the mis-selling. Not sure how far it will take us. If it does not improve the situaiton, the next step for investors will be to go for statutory declaration or class action suit.

      But we need to stay focus and not loose hope at all !

      Reply
    NChong says 13 years ago

    Hi VSL: Did HSBC mention if there was a good chance that a counterparty was willing to provide the replacement swap? I wonder how serious the potential new counterparties are. Liquidation of the collateral /swap at current market is going to be extremely penalising for investors. thx

    Reply
ENGEL says 13 years ago

Yesterday news mentioned about class suit but how to go about ? Will we be counter sue for “collaboration” ?
All are from different FIs …. need to gather some data, who has bought from GYC / Phillip Securities, anyone here ?

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VSL says 13 years ago

I just spoke with HSBC Trustee. They have a FAQ website on http://www.hsbc.com.sg/1/2/miscellaneous/minibond-notes-frequently-asked-questions.

Para 7 is reproduced below:

7. Can noteholders do anything to trigger enforcement action?

Following an event of default in respect of any series, under the terms of the programme documentation noteholders holding (together) at least one fifth of the principal amount of the notes of the relevant series can require the trustee in writing to take enforcement action in respect of that series. Alternatively, we as trustee may be instructed to take enforcement action by way of an extraordinary resolution at a noteholders’ meeting in respect of the relevant series. Following any such direction, we are advised that we, as trustee, would be obliged to enforce but that the actual method and timing of enforcement would remain subject to our discretion. As in any enforcement scenario we would seek expert advice in this regard.

I asked him whether HSBC can force liquidate Minibond without the necessary approval from noteholders. He feels that noteholders’ approval is needed before liquidation. There is a holding cost incurred in the event of non-liquidation, which he will chk on. He agrees that HSBC must do whatever pleases the noteholders. I will post any updates.

Bottom line – if we deny HSBC the permission to liquidate, they cannot do it. It will give us time to find alternatives.

-Lingam

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SWN says 13 years ago

I thought I read earlier someone announced that they are going to meet up with their respective MPs, could these persons kindly update the fellow victims on the outcome of their meeting and any followup actions by the MP?

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Desperate says 13 years ago

Lawyer says investors could recoup some cash through class action suit

http://www.channelnewsasia.com/stories/singaporelocalnews/view/383040/1/.html

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Desperate says 13 years ago

10公众聚集珊顿道星展银行 痛失10万元 七旬老夫妻落泪

http://www.omy.sg/News/Local%2BNews/Story/OMYStory200810151521-47144.html

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Desperate says 13 years ago

六旬老翁起诉大华银行 误导投资导致巨额亏损

69 Yrs Old Retiree sue UOB for misrepresenting high risk product, resulting in $360K lose in one month

http://www.zaobao.com/sp/sp081015_503.shtml

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Fury says 13 years ago

I think it is easier for DBS to compensate since all the money that investors invested in H-5 went into DBS’ pocket. Whereas for other FI, they just earned commission, so they are very reluntant to pay.

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minibomb exploded says 13 years ago

I think it is time to come together to take collective action by asking lawyer to draft statutory declaration that we are mis-lead and seek compensation.

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richard says 13 years ago

Hi Dan,

HSBC Trustee has expressly said that they would safeguard the interest of the noteholders. I hope that they would do this by deed and not word, otherwise their reputation will be at stake.

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SF says 13 years ago

I agreed with Dan,they are just taking us for a long ride.I bought mine from MB.
After writing an email to them and cc to MAS and Fidrec,today I received a letter from them saying their investigation is still going on.
Therefore I beleive we should group together and take action collectively,than we can see result.

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    lioninvestor says 13 years ago

    It will take time.

    Refer to the timelines provided by MAS.

    http://www.martinlee.sg/mas-sets-out-resolution-process-and-timeline-for-investors-of-structured-products/

    (a) To acknowledge receipt of a customer’s complaint within two working days;
    (b) To have an interview with each customer who files a complaint within two weeks;
    (c) To complete the review of a customer’s complaint and update the customer within four weeks of the interview.

    Following the results of the review, you can then decide your next course of action.

    Reply
Lew says 13 years ago

Hi,#sian,
Same things as happened to me,i bought MB s7 from HLF on Dec
2007,just because of the difference of 1.45%,i kenna like shit now.I think we should group together and sue HLf?

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    Dan says 13 years ago

    Hi #sian, Desperate, Jasmin, Lew & PT

    Also to all investors from other FIs, the FI may call us for an interview or survey or what not. But their main intention so far is only to calm us down and try to persuade us to wait for HSBC to work things out. That is their main objective, they are not exploring any other ways, not to mention compensation to investors ! They just file our complains, persuade us and then feedback to MAS, that’s all ! Neither is MAS going to do any firm actions too ! If we do not act on our own, 1 fine day, HSBC will just liquidate and thus we will receive our share of peanuts !

    This is what I gather from my conversations with Hong Leong & HSBC. Another important point, HSBC warned that this whole process will take weeks, worst case even months. I forsee that resolution time will be long, by then we will be tired out since the day Lehman went burst.

    Therefore, I urge all investors, we must endure & fight for what we believe in, and not to lose focus in our standpoint. It is a jungle out there, don’t fall into the traps of the predators !

    Reply
Jasmin says 13 years ago

After sending the letter to the FI, I read that the next step would be called up for an interview. I wonder the need for this meet-up. I don’t intend to attend such a meet-up because I don’t know what are the intentions from the other side. But they are very clear of my intentions.

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    PT says 13 years ago

    I was call for an interview tomorrow. Now still hesitate whether should I go. I am worry it might be to my disadvantage. But if don’t meet, its sort of no ending..

    Reply
      lioninvestor says 13 years ago

      You need to go for the interviews for the dispute process to be completed. These were the guidelines given to the FI by MAS:

      (a) To acknowledge receipt of a customer’s complaint within two working days;
      (b) To have an interview with each customer who files a complaint within two weeks;
      (c) To complete the review of a customer’s complaint and update the customer within four weeks of the interview.

      Just make sure whatever you say during the interview is consistent with what you have written. You might also want to take notes of what exactly you say.

      Reply
sian says 13 years ago

HI

If no news from FIs till Friday, I intend to get the declaration letter if all of you agreed that should be final way.

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sian says 13 years ago

Hi, Jason58, Dan, Desparate,

Look like we are the victims from the same FIs. I have been tracking since the day series 5 & 6 was announced default… now, it the fate for series 7 & 8… soon will be another series…. are we going to wait for HSBC to act for us…

Same… I complaint and received the phone call interview… after that died off… I felt very strong case of misrepresentation by the FIs as the high risk factors was not even mentioned to us…at the point of purchase. Also, the prospectus (two booklets) only came in abt 10 days later after the signing of the purchase. Basically, I purchase the product base on the trust on the RM ( on what he told me) and the reputation of the FIs that the product is safe to purchase.

At that point, the FD interest rate was 2.8%, which can give me 100% of principle guanrantee.. By giving me additional 1.55%, they expect us to take a risk of loss 90%-100% of principle amount… do you think a layman will go for it ???? I just felt that we are conned by the RM to purchase the product who didn’t hightlight the RISK Factors to us.

Besides,the investor should be given the prospectus which spelt all the terms and conditions at the point of the purchase and subsequently reminded should be advised by the RM to investor to read the prospectus on the product details…. no proper advise from the RM.

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Dan says 13 years ago

Hi Desperate,

Normal complain letter will not go far at all, it is just registered as a complaint for the FI to improve ! I suggest that you should get a layer (as as recommended by Mr Tan Kin Lian) to draft the statutory declaration for a small fee. I am planning to get my declaration letter across to HLF soon.

Basically, the distributor is just trying to show the whole world that they are doing their job to investigate further. But in the end, their final direction is still tied to HSBC as the trustee. At this moment, all the distributors seems to just carrying their investigation. Because they cannot keep quiet knowing that so much publicity has been made. So far except DBS, which has declared that they are willing to make some compensation. So unless, we take action thru’ the legal way and push the FI, if not they will just handle our complaints as feedback, that’s all. But what about compensation to investors ?? We investors should explore all means, we never know what we can achieve !

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sian says 13 years ago

Hi,

I am affected by the Minibond series 7. Wonder those directly affected at this moment i.e series 5, 6,7 and 8, would you like to meet up and see how best we could tackle the situation and also the legal action for the FIs’ misrepresentation. I bought the minibond from Hong Leong. I have made complaint letter to them and cc to MAS. Till now, no reply…. do we still wana to wait…. I think they are trying to escape from all these.. If DBS can take the initiative to investigate… how abt the rest of the FIs…

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    #Jason58 says 13 years ago

    Hi #sian

    Me too, victim of MB series 7. Just got the letter from HLF with attached of HSBC trustee statement. Stated as they had received the reply from Issuer on 8 oct 08, (don’t know how true, no proof attached for reference-lei) that it does not intend to exercise by 8 Oct its right to redeem early any MB Notes…… it seem that the rest of the series will have the same fate. …. I think we can’t do anything at this moment…..sad.

    Reply
    Dan says 13 years ago

    Hi #sian,

    I invested in MB series 5 & 6 thru’ Hong Leong too. Lodge complaint to MSA & Hong Leong but seems no weight at all. They just point finger back to HSBC as the trustee. We can all unite and get layer to draft the statutory declaration and send to Hong Leong. We have to push and make things work ! If we do nothing and wait, basically everyone will just wait for HSBC to take action. Soon HSBC will just decide to liquidate and we get back peanuts.

    Reply
    Desperate says 13 years ago

    My wife bought MB7 from HLF too. We e-mail the complain letter on last tuesday, and they call on Thursday to acknowledge receipt. We also send by registered mail (Kiasu). On Monday they call again to interview with about 10 questions to clarify, e.g. how long the RM spent with us to get us convinced to buy; did we given the propectus and pricing statement, and when? did the RM explain the role of Lehman Brother? etc etc.
    It is not Interrogating, very friendly mode.

    Reply
      Dan says 13 years ago

      Hi,

      Basically, the distributor is just trying to show the whole world that they are doing their job to investigate further. But in the end, their final direction is still tied to HSBC as the trustee. At this moment, all the distributors seems to just carrying their investigation. Because they cannot keep quiet knowing that so much publicity has been made. So far except DBS, which has declared that they are willing to make some compensation. So unless, we take action thru’ the legal way and push the FI, if not they will just handle our complaints as feedback that’s all. But what about compensation to investors ?? We investors should explore all means, we never know what we can achieve !

      Reply
steve says 13 years ago

Bad news for Minibond Series 7 and 8

HSBC just send out an email to distributor informing them that series 7 and series 8 has defaulted. The notice has mentioned that the estimated value of the underlying securities is 9 cents and 2 cents to a dollars for these 2 series respectively.

I have posted the full notice at http://drop.io/minibond

You can either view online or download it.

Reply
    Mr Lew says 13 years ago

    Hi Steve,
    How about the estimated value for series 5&6,
    can you kindly find out for me,thank you

    Reply
      steve says 13 years ago

      The only person who can give you that figures is HSBC Trustees. Give them a call.

      I only extract the above figure from their notice. HSBC Trustees no. is in the notice.

      Reply
    lioninvestor says 13 years ago

    Hi Steve,

    I think you misread the notice.

    There’s no estimated value of the underlying given in the notice. The one given is the principal value.

    They still need to go and obtain valuations.

    Reply
      steve says 13 years ago

      So does it means that it is less than the stated principle amount?

      series 7 $14 millions and series 8 only $320k?

      Perhaps someone can help explain what its mean?

      HK5D??? what’s your take?

      Reply
        richard says 13 years ago

        Hi Steve,

        I attempt to answer your query; The two amount of $14 and $320k
        (for series 7 & 8) could be loans given to Beryl Financial Limited , in return
        for which they have issued us with IOU via synethetic Portfolio Notes ISIN XXX with maturity date.

        Reply
steve says 13 years ago

HK5D

I like to volunteer for Track B project. Contact info send to your hotmail account.

Reply
tan says 13 years ago

Can anyone tell me which instituition should I direct my letter of dispute regarding my minibond and Jubilee note 3, I bought it from someone at Finexis?

Reply
    lioninvestor says 13 years ago

    Depending on how you were advised, you could send it to Finexis, the dealer they placed the order with, or both.

    Reply
sianzz says 13 years ago

some hope for those who bought from dbs

http://www.channelnewsasia.com/stories/singaporebusinessnews/view/382531/1/.html

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ENGEL says 13 years ago

I have not received anything at all, not even the redemption prices. If from this, we could actually deduced that something is wrong if the prices dropped tremendously.

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steve says 13 years ago

Here is an video from theonlinecitizen. Not those censured video clips from Mediacorp.

http://www.youtube.com/watch?v=ZzpYO2NunEY

Forward it to your MP.

If they have any integrity, they would take it up in Parliament!

Reply
sianzz says 13 years ago

anyone can explain in layman terms?

http://www.hsbc.com.sg/1/2/miscellaneous/minibond-notes-frequently-asked-questions

Reply
melscout66 says 13 years ago

did u receive periodical price/info update from your FI .
if u are informed / receive update that your investment value has dropped drastically , will u close your investment ?

will this constitute a breach by FI ?

below link ‘ pg 6 item i ‘spelt up some interesting point.

http://www.mas.gov.sg/resource/news_room/press_releases/2005/CIS_Code_20_Oct_2005.pdf

Reply
    steve says 13 years ago

    Minibond is not unit trust.

    For the 2 yrs I hold minibond, I have never receive any accounts, statement etc from FI.

    Only redemption prices

    Reply
      sg says 13 years ago

      Hi Steve,

      You mentioned you received information on redemption prices. Who send to you ? How frequently you receive those info ? I have received update of dividends paid by minibond through the CDP statement but never the redemption price.

      I still have pinnacle notes. who can tell me how I track those redemption prices now ?

      Thanks,

      Reply
        lioninvestor says 13 years ago

        sg. You can try getting it from the distributor you bought the Pinnacle from.

        Usually, the issuer will provide quotes but they are not obligated to do so.

        Reply
    sufferer of the bomb says 13 years ago

    There is no secondary market. Early redemption definitely incurred huge loss, as such no neccessity of providing us a weekly or monthly value.

    i am a sufferer of this bomb as well, in fact 1 week prior lehman collaspe – i wanted to get out of it but was told that only on each friday lehman spore will provide a valuation for those who opt to sell it but on that fateful 12/sept/2008 – lehman spore did not provide any (that was according to the f.i that sold me this bomb). Even if i able to sell off on 12/sept – come 15/sept with chapter 11 in force – i am doubtful i can get anything back.

    Reply
melscout66 says 13 years ago

have meet-up with my FI ; message received is FI only hold the role as distributor & transaction executor ; don’t advise.

do we have any solid ground to win the case ? slim 10 , section 199 of the Securities and Futures Act ,Fiduciary duty

court case – JP Morgan Chase Bank v Springwell Navigation Corporation [2008]
Springwell made two main claims for the losses incurred: (a) the advisory claims, and (b) the misrepresentation claims.

The court concluded that Chase did not owe a contractual or a tortious obligation to Springwell to advise it on the appropriateness of its investments or on the structure of its portfolio.

http://elink.allenovery.com/getFile.aspx?ItemType=eBulletin&id=20ed8365-6583-4f3c-aa8c-ff571f7de09a

Reply
    MinibondVictim says 13 years ago

    melscout66,

    Who is your FI?

    “FI only hold the role as distributor & transaction executor ; don’t advise” – is this any violation of the MAS regulation that they can just sell such complex products without providing any risk advise or profiling? Can anyone familiar with the MAS Act comment? Thanks

    Reply
    sufferer of the bomb says 13 years ago

    then my question is then why bother do a ‘risk evaluation assessment’ for investor (this form is required under mas ruling).

    if the f.i marked me as a low risk investor and subsequently sell me this toxic product – are they not guilty of mis representation ??? anyone can advise my standing ?

    Reply
tan says 13 years ago

i read somewhere says Jubilee 8 is a guanranteed pdt. but jubilee 3 is ‘first to default’..so i thot it’s different.

Reply
tan says 13 years ago

hi steve,

have you heard any adverse thing abt jubilee note 8? believe jubilee note 3+8 are of different class of investments

Reply
    steve says 13 years ago

    It is a structure product…probably equity linked notes instead of credit linked note.

    Question is “Do you understand all the fine print in the prospectus?”

    Reply
steve says 13 years ago

For those of you who have Jubilee Link Note 8, you can redeem it at $0.86 by informing the FI this afternoon.

Pls do so if you feel that it is better to be safe than losing part of the capital.

I would if I am holding them. Just my view… a stupid minibond investor.

Reply
    uncleyue says 13 years ago

    You mean $0.86 to the dollar, thats 86%… are you sure? where did you get the info from…I would too if I’m holding Jubilee 8… unfortunately I’m holding Minibond Series 2. Do you know how much is it worth? Anyone knows?… desperate to get rid of it!!!

    Reply
      lioninvestor says 13 years ago

      Uncleyue,

      Unfortunately, there is no secondary market for the Minibonds currently.

      So, we have no one we can sell ours to.

      The last quoted price by Lehman Brothers before they went bankrupt can be found here:

      http://www.martinlee.sg/minibond-indicative-prices/

      Reply
        sufferer of the bomb says 13 years ago

        lioninvestor

        pls kindly advise where did u obtain the valuation of minibond dated 12sept, my f.i advised me on 12sept there isn’t any pricing from lehman singapore office when i want to dump it…

        on 10/sept – i already phoned my f.i that i want to dump this minibond even i can only get back 30 percent. but was told that only on each friday of the week then i will be able to get the pricing. but come 12sept was told lehman spore did not issue any pricing to those who wanted to sell it back to them. and to make it worst, they advise me since series 1 is held under cdp – they cannot transact for me – as only uob kayhian, philip securities and ocbc are the only 3 broker able to do it. unfortunately i do not have an account with any of the above.

        Reply
        lioninvestor says 13 years ago

        The pricing was provided by one of the security firms.

        It was written “As of 12th Sep” in that email.

        If what your FI said was true and no pricing was provided on 12th Sep, then that could be the pricing for 5th Sep.

        One way to confirm that is to get the pricing of 5th Sep from your FI and compare it with mine.

        Reply
ENGEL says 13 years ago

Latest documents I received today:

NOTICE OF SWAP SETTLEMENT AMOUNT AND CREDIT EVENT REDEMPTION AMOUNT – JUBILEE S 3

As the Credit Event Redemption Amount for both SGD Notes and the USD Notes is zero, no amounts are due and payable to the Noteholders on the Credit Event Redemption Date. For the avoidance of doubt, no further payments will be made on the Notes after they have been redeemed.

Even go casino gambling also not so high risks and has better return !

Reply
Kenneth says 13 years ago

Friday, October 10, 2008
SCMP – DBS offers full compensationto mini-bond holders
SCMP Report by: Michael Logan

DBS Bank in Hong Kong has said it will offer full compensation to customers who bought mini-bonds issued by Lehman Brothers. Customers only need to prove to DBS that DBS staff misled them during the sales process

http://www.scmp.com/portal/site/SCMP/menuitem.02bb4e979f5e08d5df646910cba0a0a0/?vgnextoid=a5a3dce60f1ec110VgnVCM100000360a0a0aRCRD&vgnextfmt=teaser&ss=Blogs&s=Home&type=Audio

Posted by Tan Kin Lian at 5:47 AM
http://tankinlian.blogspot.com/2008/10/scmp-dbs-offers-full-compensationto.html

Reply
Kenneth says 13 years ago

Tan Kin Lian’s Blog
Wednesday, October 08, 2008
South China Morning Post: 2003 case sets precedent for action against financial advisers

South China Morning Post (Hong Kong) – October 7, 2008
Financial advisers can be held liable for negligent investment recommendations to clients, a local court ruling in 2003 has established.

In the Field vs Barber Asia Limited (HCA7119/2000) case, plaintiff Susan Field was awarded compensation of GBP219,890 (HK$2.84 million) plus interest and costs that she had lost as a result of changing an investment portfolio on the recommendation of the defendant.

Ms Field had asked for a conservative investment portfolio. It initially made a British sterling-dominated portfolio for her, but later advised her to gear up her portfolio with a Japanese yen loan. A subsequent appreciation of the yen forced her to provide additional cash for the loan, eventually losing the whole investment.

The Court of First Instance ruled that the financial adviser was expected to warn Ms Field of the risks. The ruling was upheld by the Court of Appeal when the defendant appealed.

Citing this case yesterday, Civic Party leader Audrey Eu Yuet-mee said minibond holders were in an even stronger position than Ms Field to claim compensation, as they had signed contracts with the distributors. She has asked the Consumer Council to refer to the case and consider using its consumer legal action fund to help holders claim compensation.

Ms Eu said individual investors might not be willing to launch costly lawsuits.
Fanny W.Y. Fung

http://tankinlian.blogspot.com/

Reply
Kenneth says 13 years ago

Hi,

Something interesting on product risk mismatch with investor.

“ANZ bank has paid out more than $200,000 to an elderly woman whose life savings are tied up in a credit crunch-affected ING fund.”

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10535307

Reply
Desperate says 13 years ago

983名雷曼投资者 签署陈钦亮网上请愿书

Mr. Tan Kin Lian submitted the petition yesterday with 983 signatures.

http://www.zaobao.com/sp/sp081009_502.shtml

Reply
Kenneth says 13 years ago

Finally is out. Jubilee Series 3 notes liquidated with -$18 million. That means nothing for notes holder.

So the only way to redeem our failed investment is to continue to ask for repayment from FIs for misrepresentation. I believe class Suit in Hong Kong has already started as their value of their notes is earlier and 3 x more than Sgp.

Regards,

Reply
    ENGEL says 13 years ago

    I have also just received the pile of documents from FI yesterday, AFTER a long wait of 3 weeks! …. riduclous for a “low” risk product to have a zero value after just more than a year ! Maybe those holding Jubilee Notes should report to the police, as suggested by Mr Tan, for CHEATING ! Where exactly are the monies now !!!!

    Reply
      Kenneth says 13 years ago

      MAS/HSBC says they are working hard on getting a fair resolution for DBS high Note, Jubilee and Minibond 5 & 6. I believe Lehman is one of the RE for Jubilee and High Note but a swap guarrantor for Minibond.

      Conclusion : NATO [No Action Talk Only]

      Before the jubilee conclusion, normal human logic is who wants to buy over a set of toxic waste that worth notch? Of course there will not be any buyers. The situation may not be as bad as Europe/US exchange but bad enough for 8000 investors whom only have a Hong Lim Square gathering to vend their anger.

      Is either a Govt white knight or a class suit against hoodwinking FIs. My thought is the later as Hong Kong is going to prove it.

      Regards,

      Reply
Jasmin says 13 years ago

lioninvestor,
To facilitate victims to email or post their complain letters, would you consider compiling a list of email addresses & mailing addresses of the various FIs?
Many thanks.

Reply
Very Sian says 13 years ago

u still trust the government? letters and emails had gone to the highest level, and still nato until now. actions only happen near election, after that everything price goes up. they care about their people? i doubt.
meet-the-people session is just a wayoung from what i read about the plight of some of u here. the only care – how many % votes and how to found more grc to increase that %. or u have wait till the same thing in kl and penang happen in s’pore, then a bunch of pretend kind faces will look for u automatically without u crying at all.

Reply
EnoughSaid says 13 years ago

I guess we have enough discussions already. It will no serve any good from this point, I think.

Choices:
1) Rally together with Mr Tan Kin Lian – sign up the petition (your Voices will THEN BE HEARD). He will be presenting it to MAS.
2) I cannot think of anyone here can form organised action. So, just wait if you trust the government.

Reply
steve says 13 years ago

This morning ST mentioned that series 5/6 are in default and HSBC announced that it will act if 20% of the investors approved the liquidation of the underlying securities or in an EGM, 75% of those attending approve it.

I believe HSBC would have written to all series 5/6 noteholders regarding the courses of actions. I believe information of the underlyings are given to suiters but so far it has not received any offer.

Can series 5/6 note holders who have received the letter from HSBC post the letter here for info?

Reply
    Kenneth says 13 years ago

    Hi,

    It is going to be a real tough task to get anyone interested in the toxic Minibomb series. With the world financials in disarray, HK MAS mediating for notes buyback and Sgp MAS waiting for HSBC to do something, it is not surprising liquidation happen. I think Series 9 and 10 is next on 11 Oct and followed by 7 & 8. My series 3 will be on 02 Dec.

    Let’s continue to push for petition, Hong Leong Square gathering, FIDReC and finally class suit.

    I doubt the FIs is concern. With the Govt muted on this issue, FIs probably think the CONed investers are fighting a no hope cause.

    Reply
    goondu says 13 years ago

    I am investor of series 5 & 6 but did not received any letter regarding this matter .

    Reply
Commentator says 13 years ago

Amendment

Those RMs, who induced innocent customers to buy highly risky structured products, without disclosing the risk attached and without considering the circumstances of their customers and with a
sole view to earning commissions are worse than those China girls in Geylang.

At least those girls earn their living without hurting others

Reply
Parka says 13 years ago

One has to note that regardless of whatever outcome, there’s a misrepresentation.

What I bought is not what I thought I have bought. The more I think of it, the more I think it’s ridiculous. Essentially my investment is tied 100% to Lehman Brother’s rise and fall, AND to the 6 reference entities . So If Lehman goes, 100% goes, but if 1 of the 6 reference entities goes, only 17% goes. This I believe if important but was not mentioned.

Even if some entity takes over the Minibond duties, I will be expecting the banks to refund me 100%. It’s a fundamental breach of trust and investors should be restored to the point as if they didn’t sign the contract.

Reply
    lioninvestor says 13 years ago

    Hi Parka,

    If even one of the six reference entities goes, there will be an almost 100% wipeout of your capital too. The scenario is actually worse than the mere bankrupt of Lehman.

    Put it this way:

    Lehman goes – Lose x dollars
    Reference entity goes – lose x + y dollars

    Reply
    lewis says 13 years ago

    Also watch CNBC news on Singaporeans buying MiniBonds

    Reply
No 1 Good HK Govt says 13 years ago

Minibond investors demand full refund

Alfred Liu

Wednesday, October 08, 2008

Lehman Brothers minibond holders are demanding a full refund of their money following the government’s proposal that banks buy back the failed US investment bank’s minibonds from investors.
The Hong Kong government on Monday proposed that 19 distributor banks and brokerage firms buy back minibonds from clients at market value to shorten the painful process of individuals recovering their money and limit reputational damage to banks.

About 50 investors attended a Democratic Party meeting yesterday to discuss the proposal.

Some minibond holders said they would not be happy if they can only get back 60 to 70 percent of their investment and insisted on a 100 percent refund. They also blamed the government for lacking supervision of investment products.

ADVERTISEMENT

The investors said they will continue to pursue legal action on the marketing practices of the banks promoting Lehman minibonds.

Undersecretary of Financial Services and the Treasury Bureau Julia Leung Fung-yee reiterated yesterday that banks “are not exempted from the investigation on marketing practices even if they are willing to buy back.”

The government expects distributors to look at the proposal and assess its potential risks before deciding within a week on whether to accept.

Investors will separately meet Bank of China (Hong Kong) (2388) representatives and lawmakers at the Legislative Council today.

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ENGEL says 13 years ago

I almost give up hope looking at the slow progress and the pushing of responsiblities from MAS to FIs, FIs to FAs. Let’s hope this Saturday speech we could act as TEAM. Please SUPPORT !
Agree that many will suffer in silence. But many illiterate people still not aware of what is going on here …….. more things will happen by hope not too late !

Reply
sianz says 13 years ago

u cannot do what the honkees do in HK. if the deal don’t go through.. many will suffer in silence

Reply
MinibondVictim says 13 years ago

Home > Breaking News > Asia > Story
Oct 8, 2008
HK investors protest mis-selling

HONG KONG – FURIOUS investors clashed with police outside Bank of China’s Hong Kong headquarters on Wednesday and demanded the repayment of investments linked to failed US bank Lehman Brothers.
Scuffles erupted outside the Bank of China building, as protesters tried to push through the police’s barricade, an AFP photographer at the scene said.

Hundreds of protestors also swarmed other major banks and the city’s legislature and demanded help from lawmakers to recoup their money.

The protestors, who complain that the banks which sold them the so-called ‘mini-bonds’ had not fully explained the risks involved, held placards and shouted slogans to demand a full refund of their investments.

Lawmakers, grabbed by protesters as they were on their way to the first session of the new legislature, promised to do all they could to pressure the government to take more aggressive action against the banks.

Wong Kin-ming, a retired hawker who had put his entire savings of 2.52 million Hong Kong dollars (S$469,000) into the bonds, said his financial advisor at one major bank told him there was no risk in the investment.

‘He told me I would not lose my principal no matter what happened. Tell me what that is if it is not deception?’ Mr Wong said.

The 53-year-old said he had had trouble sleeping for three weeks. ‘I took three sleeping pills yesterday night. I will need a psychiatrist soon.’

The protestors gathered initially at the legislature on Wednesday morning, before they divided themselves into smaller groups and marched towards the headquarters of their own banks and the Hong Kong Monetary Authority.

Political parties said they would meet with some of the banks on Wednesday afternoon to discuss plans to resolve the crisis.

The government proposed on Monday that the banks buy back the products at their estimated value from investors, who bought an estimated 12.7 billion dollars (S$2.39 billion) of the products.

But the proposal failed to pacify bond holders, who said the market value of the products is now much lower than their purchasing price.

Lehman Brothers, one of Wall Street’s most established banks, collapsed last month, sparking turmoil on financial markets across the world. — AFP

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ENGEL says 13 years ago

Latest update from MAS website:
MAS Statement on Lehman Brothers Minibonds:

MAS has received queries on the options available for Lehman Minibonds’ noteholders.

HSBC Institutional Trust Services (Singapore) Limited (the trustee) has informed MAS that the 15 day grace period for the coupon payment for Series 5 and 6 of the Minibond programme expired today and no payment has been received. As such, an event of default has occurred.

As requested by some investors, the trustee will consider all proposals for a new swap counterparty to replace Lehman Brothers for all series of the Minibond programme. We understand that a few financial institutions are currently considering taking on this role. Should there be a firm offer from an appropriate party, the trustee would seek the necessary approvals from noteholders.

If there is no viable proposal for a new swap counterparty or if a proposal is not approved by noteholders, the trustee would commence selling the underlying securities and would use the proceeds to pay the noteholders after deducting any other liabilities which are payable. This would take place once an event of default occurs. MAS would expect the trustee to act in noteholders’ interest by disposing of the underlying securities in an orderly fashion.

It is in the interest of investors for the trustee to fully review all proposals for a potential swap counterparty so that investors can vote to remain invested in the notes or for a sale of the underlying securities. This course of action should be fully explored before other alternatives, including a potential buy-back by other parties such as the distributors, are considered.

We have asked the trustee to expedite its considerations and keep investors fully informed of their options. Investors should refer to the trustees’ new FAQs which will be available on its website from tomorrow.

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Desperate says 13 years ago

Ministries and Stat Boards are not performing the same standard. Why is Minibond issue not worked on at the same speed and level as Serangoon Garden Dom issue? Is it because Serangoon Garden issue is localized, so there is a MP taking the lead. But Minibond is a national issue! Which minister is taking the lead? Pls stand up.

When you decide to build Casino, you know the impact to locals. You build up system to bar certain group of people to enter, you build up system to discourage local to enter, you advertise in the TV that gambling is no good, what have you done to educate the people that which are the Investment Products are very high risk, and what have you done which is effective to keep non-risk taker from approach by the RMs in the bank or finance company? This is not a new complaint, it has been several years that people keep writing to the Forum that Bank Tellers are reading into your account balance or transaction and alert the RM to approach the people to invest. Saving Dept and Investment Dept of the bank should be seperated clearly. Why is the bank acting as distributor ? What is their primary role? If they think those financial products are good return, they can invest our deposits on those products instead of earning commission only. They must have learned the risk is too high for them to carry. Then why you distribute those products?

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Very Sian says 13 years ago

Steve,

MAS and the government cannot run away from their responsibilities. If the authority does not understand the risks, how can we who are not scholars understand? If they understand the risks, how can they let it float so freely in the retail market and let the FI sucked thousands of people in.
It’s sad to read all the stories in this blog. I have good words about our government until this incident. The development so far makes me think that our government don’t deserve the biggest pay package in the world.

Reply
    VSL says 13 years ago

    MAS has got its backside and frontside covered. MAS does not APPROVE products, but only REGISTERS them. MAS does not need to understand the product and its risks – the investor needs to. You are seeing bureaucracy at its highest level. What a shame.

    Reply
Very Sad says 13 years ago

I brought MiniBond series 3 and Pinnacle via Hong Leong. Hope it will not happen on Pinnacle.

Reply
Del Boy says 13 years ago

some good news (relatively speaking)

1) HKMA is supporting a proposal to compensate 80% of the investors there with an estimated 60% principal return to investors. details in yahoo.com.hk. Food for thought MAS !

2) Nomura is retaining Lehman staff to unwind trades in an orderly fashion and in a manner that will minimize loss. We are not entirely sure what it means right now. But it could mean Nomura stepping in as counterparty of all the CDSs under the minibond and those CDOs that serve as underlying securities. If they don’t, it could cost Nomura a lot of money as the mark to market value of these swaps are very very different the time they were entered into.

however, I have not been able to find out what exactly are those Zircon deals that back the Series 5+6. These Zircon deals are not registered in Bloomberg under the isin No given by HSBC Trustee. Moreover Fitch has not downgraded these stuff to CCC like they did with other Zircon series. Smell fishy here.

Don’t give up !

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    Ahli says 13 years ago

    Its really a piece of good news, some light through the tunnel, thank you Del Boy, you have been providing us useful info, I learn a good lesson from the purchasing of Minibond & reading what you have written in the blog. I hope what happen in HK will affect the Mas decision.

    Reply
steve says 13 years ago

I was asked to help to verified with people who have signed the petition on Tan Kin Lien’s website to see if they are genuine persons and verify their names.

Just spoken to a 75 year old women who has lost her so called “coffin” money. She said she was about to redeem her minibond to pay for the medical expenses for one of her children just discovered with terminal disease. She said now she could not tell her children what happen to her money because of his illness. I was shell-shock for words to comfort her.

As I write this, perhaps I will call her to see if I can help her to draft a letter to her FI claiming mis-selling. I think she has a good chance to get back her money because of her age. No FI should sell a 5 or 6 year tenure product to a 75 year old woman.

Another woman invested a large sum for her mother and told me she just cannot tell her mother about the potential loss of her money. She is now struggling to banking in the interest quarterly so that her mother to prevent her mother suspecting anything. She wonders how long can she keep up with the charade as the media keep talking about the subject. It is a no-win scenario for her.

If USA, a capitalist society, is bailing out its financial institutions because it will prevent a potential melt down of Main Street [affecting ordinary people], I don’t see why Singapore government is not taking proactive action to help its citizens who have lost their saving.

Does anyone dispute that it is an oversight of MAS [govt] in approving misleading brochure/prospectus etc for a risky product for sale to its retail investors?

Reply
    chris says 13 years ago

    Perhaps you should refer her to Mr Tan Kin Lian as he is helping MAS to look for these cases. I quote from his blog (http://tankinlian.blogspot.com/2008/10/full-particulars-of-investors-of-credit.html):

    “Tan Kin Lian said…
    Hi 5:09 PM

    This is my initiative. I want to look for people, especially elderly folks, who have invested their life savings, to give to MAS. I also want to send particulars of people who have invested large sums of money.

    I agree with your view that MAS should come out publicly to help the investors. So far, they prefer to leave it to the financial institutions.

    We know that the results have been quite unsatisfactory, from the perspective of the retail investors.”

    Reply
    SWN says 13 years ago

    Steve,

    I really wonder if at the point of approving the minibond product, whether the person/department responsible really understood the risks involved in relation to those underlying securities, etc. If the approving authority also did not understand the risks fully, what can be expected from the investors?

    Reply
    Desperate says 13 years ago

    If you can summarize the profile of the investors who submitted their particulars in bar charts or pie charts, investors by age groups (>70, 60 to 69, 50 to 59, 40 to 49, 30 to 39, below 29), and maximum and minumum, or total $ invested for that age group, it will be better than thousand words. I hope MAS has taken the initiatives to ask the FIs to submit their customer profile.

    Reply
    isa says 13 years ago

    Perharps It’s not appropriate to profit from someone else misfortune..

    But I seriously think that to play this game now, you have to push the public (those not affected) to your side.

    The only way to do that is to ask Mass media to report and do documentary on the 85yr old granny who lost her life savings and needed it now for her son’s terminal illness. And the other sob stories you have.

    Emotional Appeal for Justice is more powerful than Logical Reasoning for Justice.

    Reply
steve says 13 years ago

I was looking through some of the correspondences I have with the FI that sold me the minibond and discovered that it has forwarded an attachment from Lehman Bros in July 2007.

One of the interesting paragraph in the attachment state:

No Linkage to Subprime Mortgate Assets [Series 2]

The Underlying Securities are not linked to subprime mortgages, MBS or ABS CDOs. The reference portfolio of the Underlying Securities consists of 123 corporate and sovereign credits, not mortgages, MBS, ABS CDOs. Also there are no monoline subprime lednders [such as New Century Financial Corp., which has filed for bankruptcy] in the reference portfolio of the Underlying Securities.

Notes
MBS – Mortgage Backed Securities,
ABS – Asset Backed Securities

Let’s hope that this is true and is still true for the current underlying. Let’s hope that none of the above underlying goes bankrupt in the coming future or else it will be a credit default NOT due to Lehman demise.

btw, series 3 has similar wording and the underlying securities is 150 instead of 135. Probably more safe for series 3 than series 2 in term of having a larger number underlying securities!

I didn’t understand all these underlying securities stuff until the sub-prime issue arose last year and force me to find out how Minibond is structured.

With a 20-20 hindsight, it is a painful lesson. Can anyone help me to find a job?

Reply
    Kenneth says 13 years ago

    hi steve,

    I asked my FI and they have no clue of the above. Is your minibond 1 and 2 RE are banks and finanical institution while Lehman is the arranger?

    Reply
      steve says 13 years ago

      Ken

      You can read the full document here http://drop.io/minibond

      Reply
sian says 13 years ago

lesson to learn… don’t invest in Singapore… but somewhere else…for future…. no security….at all. Worst is that, we all don’t even know where our $$$ goes to ….how to trust the financial system over here.

Reply
steve says 13 years ago

Hi

We met up with Christina Tan, a deputy director at MAS, yesterday evening regarding the Minibond.

We presented her with a list of questions [some of the questions was posted above] before hand hoping that she find time to look for the answers.

The bureaucratic news

She did not answer the questions directly because she said that some information are sensitive and just cannot be provided piecemeal to different groups of investors. It may lead to misinterpretation and result in confusing the public. She said MAS will make public announcements at appropriate time.

Since most of the questions are sensitive, somehow, I expected her to sidestep the questions even though Mr. Lo is tenacious in asking her for answers again and again. Thank you Mr. Lo for your effort.

The Good news

She confirmed that MAS is in close contact with HSBC Trustee to look for the best solution in safeguarding investors interests. This is different from the last time we meet with the CEO of HSBC Trustees. MAS said It has asked HSBC to look at options besides liquidating the underlying securities. She reiterate that this is not the right time to speculate on possible options taken by HSBC Trustees as it may jeopardize on-going effort to find the best outcome eg. “white knight” etc.

This sees to make sense if they are looking for suitors. At least we know now that HSBC Trustees is not just taking the easy way out by just liquidating the underlying securities in a depressed market.

The bad news

She said the MAS is a regulatory body and in no position to ask FIs to compensate the investors nor does it has the resources to investigate on each and every case to ascertain whether there is mis-selling of products. This means that every investor must write in to the FI that sold them the product. According to her, if a investor is not happy with the FI’s offer, he can bring it out to FIDREC [www.fidrec.com.sg] to seek resolution.

However, in our case, there is no point going to FIDRE because we do not know how much loss have we incurred. We cannot claim for full reimbursement because we do not know whether we are getting ZERO for the amount we invested. So it will be a long wait until such time we know how much losses we have suffered before we go to FIDREC. This wait could be anywhere between 1 year to full term to maturity – in case where it was decided to hold these underlying until the market turn around to sold them. In another word, if we do not get satisfaction from FIs, there is nothing we can do. By the way, the maximum amount FIDREC can award is $50k for the loss [ Loss = Amount invested less amount recovered]

The independent parties appointed by MAS is to evaluate FIs dispute resolution PROCESSES. They will not look into the individual case of complaints to FIs. This means that if your FI gives you the run about, you cannot complain to the Independent parties. She suggests that when we send our letter of complain to FI, we also forward a copy to Consumer Services in MAS. To me, the Independent Parties appointed is just a way for MAS to get FIs to pay for consultants to evaluate their internal processes and identify their weaknesses. This is a great way to get other people to do work for MAS for free. A SMART way to claim credits for work done. My admiration sincerely!

The Big Picture

What is the Big Picture? We want the amount invested back, right?

However,

What is the chances that FIs will reimburse everyone of us, or 80% of us who have bought from them when they only make 3% to 4% on amount invested in selling these products?

I don’t feel very optimistic about this. Especially it would affect their P&L and escalating into another round of plunging share prices of these FIs. Another round of financial meltdown!

The best scenario who be someone taking over the role of Lehman and selling part of the underlying securities at the appropriate time to recoup the principle amount. Of course, this is,

What is your view?

Appreciate your sharing!

Regards
Steve

Reply
    MinibondVictim says 13 years ago

    Steve,

    Thanks for your update on the meeting with MAS. This only further sadden me to learn the limited actions that MAS has been doing or is willing to do to help the affected investors.

    I agree the best option is for someone to take over the role of Lehman and allow the Minibond either to run to maturity or to sell at apropriate time to recoup the principle. This is something that only big boys like MAS or government can make happen

    Reply
    HK5D says 13 years ago

    Dear Steve,

    Thank you very much for the update.

    I attended the Speakers’ Corner gathering last SAT. I thought the investors are having good traction along the line of complaining to FI and meeting with MAS, including efforts from groups such as yours.

    I was not quite sure about what I call Track B, i.e. how investors can get as much money back as similar investors in Hong Kong. So, I was glad to read your update on the meeting with MAS. And, thank you very much for the efforts.

    The take away I had, may be just because of my ignorance, was that we are fragmented in Singapore. We had group gathering in front of the National Library. We had this petition group to MAS. We had the Speakers’ Corner. Are they the same people?

    I led an impromtu discussion with 50 some people at the Speakers’ Corner following the speech to discuss how we can catch up with Hong Kong – meaning they are talking about banks buying back the MiniBonds and depending on the series, some would get back 60-70 cents. Are we on the same path in Singapore? Do we need to do more? If so, what?

    Mr. Tan who organized the Speakers’ corner last SAT, has went ahead and block out SAT 6-7 p.m. for the next four weeks which is great. In fact, I think it would be great for your group to go there and be a co-speaker after his 10 minutes and give everyone an update.

    Thanks,

    HK5D

    Reply
    HK5D says 13 years ago

    Hi Steve,

    Thank you so much for willing to help.

    You can reach me at [email protected]

    Thank you so much,

    HK5D

    Reply
Parka says 13 years ago

If you guys are meeting with any people who actually do something positive for the investors, please always ask this question at the end of every response given.

“How does it impact us and our investment?”

Since they can’t think in our shoes, might as well keep reminding them to do so.

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Parka says 13 years ago

Here’s what I feel about Singapore has handled the situation after so many days, FROM A PERSPECTIVE OF AN INVESTOR.

The 3 independent party are just looking at the compliant process to see if it’s fair. Is there anything here to make sure that the investment is safe and will be returned? No.

Singapore has adopted a wait and see attitude which is very clear. HK Gov has already moved to the stage asking banks to consider buying the minibonds back, a step that directly impacts the investor. Singapore has just done nothing except talk and installing 3 people, all without any indication that more will be done.

I seriously think that the government will only come in if someone dies.

Just look at how it handles the NS deaths, the near-death situation of SIA during SARS and pilot negotiation.

(I’ve attempted to type this many times, every time deleting it thinking there might be some positive concrete action. No, nothing useful has been done so far for the investors.)

If I have the money, I would have sued straight away. In fact, I’m going to work hard make piles and sue in the future. This is the type of ill feeling the FI and MAS have created in me.

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Very Sian says 13 years ago

Kenneth, isn’t it usually the s’pore approach is to wait for some big problem or public outcry to happen before the government will do something? I’m waiting for that ah pak to take a chopper and chase a million $ man. Or else it will will be a case of use this lesson to set future direction, this is the million$ price tag i supposed. It’s very sad that our country has become like that over the last 40+ yrs. The government is too busy with other issues instead of taking care of the people like us, like in HK. We have too many complacent and comfortable people around here….

Jasmin, go do what u need to instead of keep calling yourself coward. Hv courage, and speak up. There is justice in this world.

Lion Investor, do u hv any news on the meeting with MAS last nite?

Reply
    Jasmin says 13 years ago

    A kind gentleman has sent a summary on the MAS meeting via email. I am unsure if the author (S YAP) allows me to copy and paste that email.

    Reply
Jasmin says 13 years ago

What can we achieve from this saga? It is almost impossible to get a full refund on the amount invested. How much compensation in terms of % of our amount invested is considered reasonable? Afterall, we have to bear some responsibility too.

Besides signing up at the 2 petitions (now closed) at Mr Tan KL’s website, the next probable move would be to write to the bank involved (mine is Maybank) and FIDRC?

Thanks.

Reply
    Kenneth says 13 years ago

    Already writen to my FI. They will be replying next week [14 days]. FIDRC doesn’t entertain until FI reply you and you are not satisfied. The below is what you will expect:

    ===========================================
    Dear Mr. Kenneth,

    We refer to your email to us pertaining to your dispute with Phillip Securities Pte Ltd.

    Please refer your complaint to the Complaint and Compliance Department of Phillip Securities Pte Ltd first. In the event you cannot obtain a resolution to your satisfaction in 4 weeks from the date of your complaint, you can then refer to FIDReC to assist you with your case.

    You may then complete the attached Dispute Resolution Form. Please have it duly signed and returned to us. Please also let us have a copy of your NRIC (front and back) as well as documents (as per attached checklist) which are relevant to your case.

    We will assign a case number to you upon receipt of the above mentioned documents. Our Case Manager will then contact you in 6 to 8 weeks thereafter.

    ==========================================

    Regards,

    Reply
    lioninvestor says 13 years ago

    Jasmin,

    Writing to your FI is not just a probable move. It’s a necessary move if you want to ask for any compensation (on top of any liquidation value you may get).

    Signing the petition is just for making a statement to the government. You still have to file your individual case.

    Reply
      Jasmin says 13 years ago

      Hi lioninvestor and Kenneth,
      Thanks for your replies.

      I hesitated to write to Maybank because I am scared of the possible consequences. We are now talking about big banks with plenty of lawyers, bullets and time. I am just a simple woman.

      Ok, I am a coward.

      Reply
        lioninvestor says 13 years ago

        Jasmin,

        The purpose of the letter is to register your complaint and put pressure on them to agree to a private settlement with you. How they respond will be recorded by MAS.

        Depending on their response, you can then decide how to act.

        There’s no need to engage any lawyers at this point in time.

        Reply
        minibombed says 13 years ago

        You are not alone.

        I, like you, fear the consequence of them turning the table on us with their financial resources.

        We have already lost so much… we do not want to lose much more.

        Reply
Trishaw Rider says 13 years ago

Hi All Sufferers,

It’s kind of late that I found and noticed from this website that so many people had suffered their plights. I am in the same boat too but suffered silently as nobody including DMG securities (which I bought the minibond from) ever inform me as what to do next.
I read from newspaper that the govt had formed three persons to look into buying future structured products carefully. I feeled this is useless as nobody will invest into this products anymore.
Instead I would recommend the govt to involve this three persons to help us (all sufferers) on how fast to get our hard earned monies back. They should form a committee to talk to MAS; FI; involved banks and Lehman Brothers Corp……..etc to work out a solution ASAP.
Hopefully it will help us.

Trishaw Rider

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    Kenneth says 13 years ago

    Minibond 5 & 6 default interest payment on 22 Sept. Add in 15 working days grace period, it will be 13 Oct.

    That is the reason why the MD of MAS says they are expediting solution the these group of investors like DBS High Notes 5 and jubilee Notes investors.

    Some form of solution is forming in HK by HSBC institutional trustees service about notes buyback from investors. The question here is what %?
    ===========================================
    Below is taken from Mr. Tan blog:

    Section 27 of the Financial Adviser Act require an adviser to ensure that the recommendation (i.e. to invest in the credit linked securities) is appropriate to the person being advised.

    No licensee (i.e. adviser) shall make a recommendation with respect to any investment product to a person who rely on the recommendation, if the licensee does not have a reasonable basis for making the recommendation.

    A licensee does not have a reasonable basis for making a recommendation to a person unless he has obtained information or conducted investigation into the investment objectives, financial situation and particular needs of the person.

    Where a licensee contravenes this requrement and the person who relies on the recoomendation has suffered loss or damage, the licensee is liable to pay damages to that person in respect of that loss or damage.
    ===========================================

    According to last Sunday’s Money Mind, this section was only used in 2005 by an investor of $100,000 with Citibank. It did not make it to the court as is was likely to settle out of court. The distributors involved in the above are as follows:-

    Maybank, Hong Leong, DBS, ABN, Philips, OCBC, UOB, CIMB, GYC,
    SCB, Citibank, Amex, Kim Eng, HSBC, Alpha.

    The Minibond series investment in Sgp is about US$350 million, a third of HK. I think it is better for these FIs to take back the notes while not admitting wrong doing. It will only cost them $25 million on average. This number is lower if you deduct the interest that was paid out previously. It is PEANUT compare to the profit DBS generate quarterly. Or is it better to go to court & continue with the present reputation damaging publicity on them?

    Regards,

    Reply
Very Sian says 13 years ago

What happens in HK may not happen here, this is my gut feel after so many yrs as a s’porean. Which million $ minister dare to stand up for us , risk their career and lose million $ corporate tax revenue? No response even after writing to the most high. Prove me wrong, someone, plse. Don’t pretend you are not aware, the noise in the last 3 weeks has reached heaven.

Reply
    Kenneth says 13 years ago

    Be positive. What do we got to lose. At least the above is a piece of good news if it is coming from HSBC.

    Again, clearer news will come tomorrow. I guess our section 27 will drives the FIs to the wall and it is going to be real expensive for them.

    At the moment now, people are looking at FIs and FAs as con-artist. Who wants to give them business? Who dare to talk to RM? Financial service is a people oriented business. No people means bad business. Bad reputation means no business.

    The present situation can turn ugly. Tell a Ah pak he is not getting back his $175,000 notes, he may start taking a chopper and chase after those RM in DBS branch.

    It will get more interesting if he is told Hong Kong can get back $ but Sgp cannot. Then he will chase after the cabinet.

    Again, like I say before, the Hong Kong outcome will lead the way for Sgp MAS. If Sgp MAS claim that they work with Hong Kong MAS on this, then good for them. If not, then I guess million $ price tag is truely underserving.

    Anyway, since the saga, I have grown a few more white hair, discover the comradeship of this website, enjoy our Mr. Tan blog. Let’s continue to give each other update. I will consider the end when the money reach my hand….

    Regards,

    Reply
coffee-o says 13 years ago

Someone told me that :
a. 7-days cool-off (cancellation) period for unit trusts
b. 14 -days free-look preiod for lift policies.

minibond is not either one of the above. Therefore, no cancellation period is provided.

It is true? please advise.

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    Joe says 13 years ago

    Minibond, which is a structured note, is categorised as “debentures” by MAS. It is not a collective investment scheme (which includes unit trusts, REITs) nor an insurance product. Apparently there is no freelook or cancellatiom period. But somehow, my sister did managed to cancel her investment and got her money back from her Citibank advisor for her Morgan Stanley structured notes 2 months ago after I advised her of the risks involved. The notes were yet to be issued.

    This shows that most people are not aware of what they are investing into. Better guidelines and investor protection should have been set up by MAS instead of the usual “buyer beware” statement. Now I wonder how safe are the structured deposits that so many S’poreans have already poured their money into over the past couple of years…

    Reply
      coffee-o says 13 years ago

      Joe

      Thanks for your advice.

      It seems that this kind of product is even more risky (toxic) then unit trust and insurance products or for the matter time sharing scheme.

      Once you sign on the dotted line is like selling your life away without return.

      Reply
anonymous says 13 years ago

HSBC (SEHK: 0005, announcements, news) – the trustee of Lehman Brothers minibonds and other banks who helped distribute them – have showed a positive response to government suggestions they buy back Lehman Brothers minibonds from holders, Financial Secretary John Tsang Chun-wah on Monday….

http://www.scmp.com/portal/site/SCMP/menuitem.2c913216495213d5df646910cba0a0a0/?vgnextoid=c7dab40ae21dc110VgnVCM100000360a0a0aRCRD&vgnextfmt=teaser&ss=Hong+Kong&s=News

7:30 PM

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    Bad Dream says 13 years ago

    Wow! Really?? Is that good news? How about our government? Will they help us with “government suggestions” ? Keeping my fingers crossed! If HK can and our government can’t it would be an unbelievable let-down.

    Reply
      SWN says 13 years ago

      In my view, the trustee is acting for all minibond holders, so any positive responses should be beneficial to all minibond holders irrespective of where they come from.

      Reply
tan says 13 years ago

where’s our money? can someone enlighten.. if its still around, why can’t a White Knight be appointed..

Reply
tan says 13 years ago

having a WHITE KNIGHT is the best..

Reply
    Richard says 13 years ago

    The white knight will only appear if the trustee bank report the worthliness, the background of the financial institutions to whom MiniBond Ltd lend the money, the size of the loans , the term and conditions under which the money are given to the financial institutiins in exchange for the our securities.

    Reply
      Kenneth says 13 years ago

      What ever underlying securities they had, should already gone down 50% or more. 6 mths ago, Bush said economy ok, congress release $ for people to spent. Now he says very bad. Some people says economic Tsunami. $7,000,000,000 release to buy toxic asset. Ours should be part of the toxic asset. Today news indicate Lehman in 2006 already looking for buyer and finally give up. One of the potential was JP Morgan who before Lehman went bankrupt, held on to $17 billion of Lehman asset.

      If all FIs join forces and take over $500 million of x securities, how are they going to answer to their shareholders and will this be a losing business? For this to happen, MAS or Govt must broker the deal. I think it is very unlikely as MAS/Govt are still mute about the whole thing.

      FIs still cannot run away from the responsibilities of misrepresenting these toxic products to us. I believe MAS will fine FIs as it is beyond doubt they mis-sell. If that happens, it means the FIDRC process will be easier as FIs have been found guilty. I don’t think the independent committee can walk away and say this is purely investors fault when Ah Pak, who don’t know how to read, given up all his savings for a piece of toxic product. People like us also clueless how the money was used in the first place as FAs also blur.

      Regards,

      Reply
        Richard says 13 years ago

        I remember reading in yesterday Sunday Times, that US government
        will be buying back the CDOs at about 40 cents for a dollar and reselling them at about 80 cents for a dollars when the market recover in two or three years times. The question now is how toxic these underlying securities are ,because in the final analysis the buyers would be selective in their purchase.

        I would also like to share that I receive a phonecall from Maybank, one week after the Lehman bankruptcy, that for MiniBond Series 2 & 3 the underlying securities is by GE (General Electric). This actually deviate from the letter by MiniBond Ltd dated 15 August 08 in which it is stated
        (in the Annexe )that the underlying securities for Series 2 & 3 is Beryl Financial Limited.

        Reply
Bad Dream says 13 years ago

Lobby for a White Knight! This would allow the Minibonds to continue and we can get back everything when it matures!

Only MAS can have the clout to help us lobby for a saviour.

This would be the best solution.

We can and should still continue pursuing the avenue of mis-selling but this is a very tedious process and in the meantime the Minibonds would fall off one by one when the default date happens. The market in in a terrible state at the moment. Selling off of underlying securities now would fetch very little $$.

Am I right? Any comments?

Reply
VERY SIAN says 13 years ago

I wrote to the FIs and cc MAS. I received a call from FI and they are looking into my complaint. I thought it will be useful to highlight to FI if the prospectus was delivered to you after the signing of the product as it was a case of misrepresentation of product. The prospectus which spelt out the risk factors should be disclosed to investor upfront or earlier so that the investor can still make decision during the grace period. There is misleading to receive the prospectus after the start date of the series…

Most important, I wan my saving back…… still don’t understand why I am in this deep shit….

Reply
SWN says 13 years ago

I heard from someone who has spoken to MAS that for those who have filed their complaints, if their complaint is valid and they still incur loss from minibond, MAS will ask the FI to compensate the investor’s loss.

Can anyone comment/clarify whether the above is correct information? If so how about those who have not filed their complaints?

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    lioninvestor says 13 years ago

    SWN,

    Whatever it is, you still need to file your complaint to the financial institution.

    MAS will only monitor the case, they cannot force any FI to pay compensation.

    Reply
tan says 13 years ago

seems to me that FIs and their salesman or agents were not even familiar with what they had sold to retail investors.

it is very clear that retail investors in Singapore & Hongkong have placed their trust on their FIs and representatives but only to be dashed with utter disappointment.

how can the govt/mas let singaporeans down and not do something for innocents.

hope the govt or it’s representative – the MAS will somehow help the victims to claim back something from the FIs and representatives our hardearned, lifesavings back.

Reply
    Kenneth says 13 years ago

    MAS make it very clear they will only fine if FIs proven at fault. This, I think, has to depend on the 3 independent individuals. Very clearly from the show and forums, risk analysis, informing investors of risk involved are short coming.

    MAS suggest individual to approach FIDRC to mediate if individual is not satisfied with FIs’ reply after complain. FIDRC will only get back to you in about 6-8 weeks after you lodge a complaint. I assume this is under normal circumstances but when investors of S$500 million lodge complaints at the same time, it is going to be a long queue.

    I suggest we stick together, work through the normal process and in the event got nothing back, then a class suit can be consider.

    I sincerely think that many retirees who are very savy with the legal process and have invested hugh amount, will likely to expedite the whole process and gather support from us to get back our losses.

    Regards

    Reply
      VSL says 13 years ago

      I think the 3 independent assessors role is just to verify that FIs have a proper complaint-resolution process in place.

      Their job is NOT to investigate any wrong-doing in the selling process of the product. That will be a very big job for 3 individuals, especially for one who has several FIs to look into.

      Such possible criminal fraud activities must be investigated by the Police and CAD. Up till now that has not started. One of Mr Tan KL’s petition is to ask the govt to initiate such an investigation. If such an investigation reveals criminal intent on the part of the FIs, then only can the investors recover a sizeable portion of their investment.

      Reply
Cheryl Ong says 13 years ago

I bought Mini Bond Series 5 from Maybank.

The Financial Planner, Ms Stephaine Tan, told me that my principal is not protect ONLY in the event when one of the Financial Institutions (Citibank, DBS Bank, Goldman Sachs, HSBC, Merill Lynch & Standard Charters) has a Credit Event. All the above Financial Institutions have credit rating ranging A+ to AA+.

NEVER once has she mentioned of other risk.

I tried contacting her when I read about the mini bonds on the newspaper and found out she had resigned.

I am lost as to what I can do now. I felt misled and cheated.

Reply
uncleyue says 13 years ago

As suggested I wrote to my MP as well as cc the complaint letter which I wrote to my FI… have yet to hear nor acknowledgement from him. Does anyone here having same experience?

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    Kenneth says 13 years ago

    I emailed to MP. MP’s PRM emailed back and said they forwarded to MAS.

    I emailed to Phillips Securities, they said to get back to me in 14 days.

    From this site, there are investors writing to PM and MM and it was redirected to MAS.

    Yesterday’s money mind has a topic on Lehman saga and very similar to our situation for mis-sell, in 2005 a lady sue citibank for Mis rep under section 27. They did not make it to court and it was likely they settle out of court.

    Regards

    Reply
SIAN says 13 years ago

hI,

I have the Minibond Series 7 which launched in Jan 2008 but purhased in Dec 07. My situation is that I only received the prospectus and documents 2weeks after the purchased date which I found is not right law…the grace period also over and everything is finalised…. The prospectus should be given to the investor on the day of purchase so that they could go back and study and if need be they can clarify or cancel if they don’t feel comfortable with… and not the other way round…. there is a admin lapse in the FIs or force selling in FIs. I support that’s why many of us are not aware of the risk factors.

Reply
sian says 13 years ago

I very upset the things handled in Singapore. Why we always get the updates from HK… and see how HK authority has handled the cases… how abt Singapore???other than appointing three independant parties to hear the complaints… what else has MAS done so far??? do they go extra mile to security their people’s interest??? where is the action…. talk no use… I agreed with some of you… we shd seek gather to seek legal advice… if no help from the government…. sad to say that….

If I know earlier, I shd put my $$$ in HK instead of Singapore. No wan can tell me where my money goes to???say to say that even the FI who sell me the products cannot even tell me how much worth is the product…. I much will I lose from the product… how can I have confidence withe the bankers over here in future…

Reply
    Kenneth says 13 years ago

    Confident in FIs and FAs?

    Already evaporated since the start of the saga. Dare not talk to them anymore else going to have another round of prolong headache. FAs in Mr. Tan Blog also claim they do not know the product is so toxic. So much for product knowledge from FIs and FAs.

    I am my own FA from now on….

    Regards,

    Reply
darwin says 13 years ago

Hi, I am a minibond series 5 investors. Anyone still can recall the info on the reference entities on this series? None have defaulted right? Thanx

Reply
    lioninvestor says 13 years ago

    Hi Darwin,

    Lehman has defaulted on the coupon payment. As such, one of the options available to the trustee is to unwind the underlying securities (synthetic CDOs) and return the money to noteholders.

    The current valuation means investors will take a hit on their principal, never mind what the reference entities are.

    Of course, if the reference entities had defaulted, things would be much worse.

    Reply
      Kenneth says 13 years ago

      Hi lioninvestor,

      I am wondering why the Notes issues only happen in Hk and Sgp? Why not China, Japan, Malaysia or Europe?

      Is it because the regulators in these countries smelled something fishy and halt the promotion of such products?

      Regards,

      Reply
        Joe says 13 years ago

        It seems that Lehmans’ Asia ex-Japan hq was in Hong Kong. Following the success of marketing Minibonds in HKG, they came to Sg to launch their minibonds. Probably these are the two main markets that they were targeting when they launched the minibonds back then.

        China and M’sia have all along been very tightly regulated markets, foreign FIs will find it difficult (or almost impossible) to launch such new products in these markets.

        Reply
Hope says 13 years ago

Good observation and solution from Mr Tan:

“In my view, the financial institution has breached section 199 of the Act.”

“I hope that the MAS or Attorney General can negotiate an out-of-court settlement where the distributor shall buy back the product from the retail investors for 50% to 80% of the invested sum.”

“By buying back the structured product at the negotiated value, the distributor can reduce its loss from the recovery of any residual value arising from the liquidation of the assets of the structured product.”

See detail at:
http://tankinlian.blogspot.com/

Reply
    Kenneth says 13 years ago

    Glad someone is at least going beyond what MAS/Govt are doing. Saturday Hong Lim Square is going to rock.

    Also in Mr. Tan Blog, he is asking upright RM to share his views on the sell of the Notes from the FIs. Below is one RM comments.

    Anonymous said…
    Hi Mr Tan, i am an RM from a bank. I have read your blog with much interest. First and foremost, i want to clarify that there are RMs with a heart, who have real desire to help customers make money. With the structured products that you have mentioned, i believe in all honesty, most of us dont know how toxic or the fundamental it is been structured. On my part, i always highlight that the product is not a fixed deposit and has an issuer risk and make it known to the customer. I believe many do the same. We are also in a predicament. Sigh its been an extremely tough time for us too, not that i want to downplay those who have personally invested in those products.sigh..

    Reply
checker says 13 years ago

Channelnewsasia tonight

9:30 PM Money Mind
Episode 27
Many Asian investors who lost money on structured products linked to Lehman Brothers have complained that they were not told of the risks. But is it a question of mis-sellings?

Reply
steve says 13 years ago

We would be meeting up with MAS on Monday and hopefully we can get some answers to questions that are important to us to decide on the next course of actions.

Some of the answers I have in mind are:

1. What are the total value of credit-link structure products sold in Singapore and how many retailed investors have invested in them?
2. What is the average or median amount invested by these investors?
3. Would MAS consider this amount at risk to be material to singapore investors?
4. What are the options considered by MAS in helping these investors to safeguard the value of their investment in the last 2 weeks besides appointing the 3 arbitrators?
5. Would MAS consider taking proactive actions to safeguard Singaporean investors’ interests by looking for a “White Knight” to take over the role of Lehmen? in the case of Minibond, where Lehmen is not one of the reference entities that has defaulted?
6. Has MAS, as a central bank of Singapore, any influence over any potential financial institutions [Temasek, GIC, Brokerages that distribute these product, who can jointly be the white knight in taking over the role of Lehmen?
7. If MAS does not feel that it has a role to play in find a White Knight for local investor, What are its reasons and why it think differently from that of HK and Taiwan MAS in taking active action in helping their investors?
8. Would MAS as the approving authority for Minibond brochure, deem immaterial to inform the investor that the lone default of Lehmen would trigger a default event?

Please send in questions you deems are important for us to know to include to above.

Reply
    Bad Dream says 13 years ago

    Hi Steve

    Thank you for representing us and meeting MAS. Your questions have covered very good grounds and I hope you get some answers.

    I used to be one of those “yes-citizens” but with this experience I think we need to get out of our comfort zone and co-operate to help ourselves.

    I am doing everything I can to support all who has a heart to help us.

    See you all at Hong Lim and I believe we really need to take it beyond.

    Reply
    MinibondVictim says 13 years ago

    Hi Steve,

    MAS can also help to exert pressure on Lehman Singapore who is the Arranger of Minibond and played a major role in bringing this toxic and misrepresentation to Singapore. Perhaps they can be pressured to arrange a white knight with their industry relation and experience. These guys are now just sitting comfortably in their Suntec office under new parent Nomura and not affected at all depsite all the problem they created

    Reply
    Choon says 13 years ago

    Hi Steve,

    Thanks. We will sure support you. It’s alos heling us.

    Reply
    Choon says 13 years ago

    Hi Steven,

    Thanks.
    MAS should appointed independent party. All details of complaints should be launched direct to this independent party and not go to FI. Look like all FI are trying to cover they’re misrepresentation and selling.

    Reply
Very Sian says 13 years ago

My point for raising those is, i wouldn’t be surprised HK investors will get a better deal eventually, may be quitely. They fight…their government allows and don’t supressed.

Reply
Very Sian says 13 years ago

Lion Investor

HK has always been more open compared to S’pore. Some years back when i was working in HK, i experienced incidents that open my eyes.
1. i was invited by a colleague to join their 100,00 people sunday rally on the street to fight for some issues (which i forgotten the details). Journalists turn up and widely publicized in all HK newspapaer.
2. one colleague was inviited to be part of a jury team in court to decide if a defendent was guilty or not. The jury consisted of people of all ages from different walks of life. Mind u, my friend was only 24 yrs old and had graduated from engineering school only 1 yr ago. Opinions and different voices matter in HK. Medias are transparent and reports openly.
3. Their MTR (our MRT) system arrived at stations approx. every 2 mins during peak hrs. I remmeber the 1st time, i ran for it when i heard the buzzer but soon realised how foolish i was. There’s no need to run like in S’pore. Their MTR is also a public listed company.
Overall, i find HK people more hardworking, proactive and voice out and discuss issue openly on issues affecting them. Voters assess their MP or reps critically. No such thing as walk over or GRC. Of course the only problem was small houses and pollution.

Reply
Very Sad says 13 years ago

I really no sure why till now have not seen any Ministers or MP has step out to say anything about this Lehman Minibond, Merrill Lynch Jubilee Series or DBS High Note unlike Hong Kong.

Think they must be very busy with other stuffs which more important than take care of those ordinary people given the trust to them. Pretty sad thing.

Reply
MinibondVictim says 13 years ago

Redeem or wait, minibond holders told
By Joey Kwok (HK Edition)
Updated: 2008-10-04 07:58 Comments(0) PrintMail

Lehman minibond holders will have to decide if they would like to redeem the minibonds or wait for a “white knight” to replace the bankrupt Lehman Brothers, a government source said on Friday.

According to the Lehman’s document, issures of two series of Lehman minibonds have failed to pay for the interest to investors during the 15-day grace period.

HSBC, a trustee of the Lehman’s structured products, has already issued a default notice to certain Lehman minibond holders.

Having received the notice, the minibond holders will decide whether to terminate their investments in the structured products and go for early redemption.

The source said if more than 20 percent of the holders agree to terminate the investment, they may get back a certain amount of money. However, the amount is unknown as it depends on the valuation of the structured products, including collateralized debt obligations (CDOs).

The source said if the minibond holders do not wish to sell the structured products, they can wait for a rescuer to step in and replace Lehman. This may happen only after at least 75 percent of the minibond holders choose to seek a rescuer.

This “white knight” will continue to issue the same interest payment to the minibond holders, while the terms and regulations of the minibonds will also remain unchanged.

When asked how the minibond holders will cast their votes, the source said the actual voting system and steps will be released later. Yet the source hoped that the trustee can provide more information on the collaterals, so that minibond holders can acknowledge the amount of repayment.

“At the moment, there are two options,” the source said, adding that it will be a business decision for a potential lifesaver to come forward.

Meanwhile, the Hong Kong Association of Banks (HKAB) has set up a taskforce to deal with issues related to Lehman minibonds and it met for the first time on Friday.

The HKAB taskforce will facilitate member banks’ efforts to handle issues related to Lehman investment products by following up with Lehman’s liquidators and trustees.

HKAB also said some of its member banks have increased manpower to handle complaints and inquires from investors.

The taskforce will also form subgroups to conduct analysis on each category of investment products.

(HK Edition 10/04/2008 page2)

Reply
    lioninvestor says 13 years ago

    Thanks for the update.

    I am wondering why there are options available to HK investors, while things are moving slowly over here.

    Reply
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