<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>Mistake to pay investors not satisfied to park their funds in fixed deposit account
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<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->I REFER to Thursday's article, 'Lifeline for most investors'.
It was reported that DBS Bank, Maybank and Hong Leong Finance said they were working hardest to help the 'highly vulnerable' investors (who lost huge sums in the High Notes 5 and Minibonds fiasco), including the elderly and less educated, and some investors may get all their cash back.
I deprecate such a move by the three financial institutions.
Irrespective of whether the investors were misled or deceived in the course of making their investments in High Notes 5 or Minibonds, many of these investors made such investments because they were not satisfied to park their funds in a fixed deposit account in a local bank. To put it bluntly, they had been greedy.
The rescue effort announced by these three institutions makes a mockery of the values of prudence, care and safety that have been inherent in the attitudes of account holders who have chosen to let their funds remain in fixed deposit accounts. The message that such a rescue effort is sending is that as long as an investor meets certain criteria (in this case, 'elderly' and 'less educated'), he may invest with impunity, and without fear of losing his principal sum because rescue is always round the corner.
Failed investments must be left to their own devices and machinations for account holders of fixed deposits to experience any reward for their prudence and patience.
It was reported in the article that the rescue would involve paying some $70 million to $80 million. The pertinent question is, from where will the three financial institutions be drawing this payout of $70 million to $80 million? It would be highly disturbing if such payout were to be drawn from the accounts of the financial institutions' other customers, or from sources that would affect (directly or indirectly) the potential value of other customers' accounts. There is no reason why the folly and greed of these High Notes 5 and Minibonds investors should be paid for by other customers of the financial institutions.
I should add that the creation of a special class of 'highly vulnerable' investors, that is, the elderly and the less educated, opens a Pandora's box and may lead to more unfairness. An individual may be streetwise and knowledgeable, but still qualify as 'less educated' just because he does not possess the prescribed certificates. An investor may be elderly, but may well have had the benefit of advice from family members behind the scenes, yet still qualify for the rescue. On the other hand, a policy of non-interference across the board would ensure that there will be no abuse of magnanimity.
Last but not least, there is no reason for DBS Bank, Maybank and Hong Leong Finance - or any other financial institution, for that matter - to make payouts in the absence of any finding of liability on their part by a court of competent jurisdiction. It is up to an aggrieved investor who claims he has been deceived or misled - and who, by the way, refuses to accept the risks inherent in investing - to bring the particular person or people responsible to justice and obtain compensation through the proper legal channels.
Take the risk. Bear the risk. It is only right. Yeh Siang Hui
http://law.nus.edu.sg/alumni/alumni_directory.asp?Year=2002
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<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->I REFER to Thursday's article, 'Lifeline for most investors'.
It was reported that DBS Bank, Maybank and Hong Leong Finance said they were working hardest to help the 'highly vulnerable' investors (who lost huge sums in the High Notes 5 and Minibonds fiasco), including the elderly and less educated, and some investors may get all their cash back.
I deprecate such a move by the three financial institutions.
Irrespective of whether the investors were misled or deceived in the course of making their investments in High Notes 5 or Minibonds, many of these investors made such investments because they were not satisfied to park their funds in a fixed deposit account in a local bank. To put it bluntly, they had been greedy.
The rescue effort announced by these three institutions makes a mockery of the values of prudence, care and safety that have been inherent in the attitudes of account holders who have chosen to let their funds remain in fixed deposit accounts. The message that such a rescue effort is sending is that as long as an investor meets certain criteria (in this case, 'elderly' and 'less educated'), he may invest with impunity, and without fear of losing his principal sum because rescue is always round the corner.
Failed investments must be left to their own devices and machinations for account holders of fixed deposits to experience any reward for their prudence and patience.
It was reported in the article that the rescue would involve paying some $70 million to $80 million. The pertinent question is, from where will the three financial institutions be drawing this payout of $70 million to $80 million? It would be highly disturbing if such payout were to be drawn from the accounts of the financial institutions' other customers, or from sources that would affect (directly or indirectly) the potential value of other customers' accounts. There is no reason why the folly and greed of these High Notes 5 and Minibonds investors should be paid for by other customers of the financial institutions.
I should add that the creation of a special class of 'highly vulnerable' investors, that is, the elderly and the less educated, opens a Pandora's box and may lead to more unfairness. An individual may be streetwise and knowledgeable, but still qualify as 'less educated' just because he does not possess the prescribed certificates. An investor may be elderly, but may well have had the benefit of advice from family members behind the scenes, yet still qualify for the rescue. On the other hand, a policy of non-interference across the board would ensure that there will be no abuse of magnanimity.
Last but not least, there is no reason for DBS Bank, Maybank and Hong Leong Finance - or any other financial institution, for that matter - to make payouts in the absence of any finding of liability on their part by a court of competent jurisdiction. It is up to an aggrieved investor who claims he has been deceived or misled - and who, by the way, refuses to accept the risks inherent in investing - to bring the particular person or people responsible to justice and obtain compensation through the proper legal channels.
Take the risk. Bear the risk. It is only right. Yeh Siang Hui
http://law.nus.edu.sg/alumni/alumni_directory.asp?Year=2002
