Failed products: Why clients were misled
I REFER to Mr Chua Sheng Yang's letter last Saturday, 'What he meant'.
We take issue with Mr Chua's claim that there are many people seeking redress when there has been no injustice done in the first place.
We would like to ask Mr Chua how familiar he is with the issues of the collapse of the Lehman-related products such as Minibonds and DBS High Notes.
Recently, we carried out a data-gathering exercise among High Notes 5 investors. Preliminary findings show a consistent pattern of customers being told at the point of sale that High Notes 5 was low risk and safe, something that does not match DBS' recent public admission that the product had a risk rating of '8 to 9' on a scale of 1 to 10.
Now, Mr Chua could well say that investors may assert this only because High Notes 5 has collapsed. But would he also contend that a reasonable retail customer, if given all correct information, would still risk his entire investment on such a risky product in return for a mere 5 per cent in annual interest?
And would town councils also knowingly have invested public funds, especially given that they are not aggressive investors?
To us, there are systemic failures in the product, in the selling process and in the targeting of customers. Therefore it matters not if the investors were professionals, or business people, or in fact, organisations like town councils. All of them have been similarly misled about the nature of what they bought because the risks are not commensurate with the returns.
Jeannie Lim (Ms)
High Notes Investor Group Committee
I REFER to Mr Chua Sheng Yang's letter last Saturday, 'What he meant'.
We take issue with Mr Chua's claim that there are many people seeking redress when there has been no injustice done in the first place.
We would like to ask Mr Chua how familiar he is with the issues of the collapse of the Lehman-related products such as Minibonds and DBS High Notes.
Recently, we carried out a data-gathering exercise among High Notes 5 investors. Preliminary findings show a consistent pattern of customers being told at the point of sale that High Notes 5 was low risk and safe, something that does not match DBS' recent public admission that the product had a risk rating of '8 to 9' on a scale of 1 to 10.
Now, Mr Chua could well say that investors may assert this only because High Notes 5 has collapsed. But would he also contend that a reasonable retail customer, if given all correct information, would still risk his entire investment on such a risky product in return for a mere 5 per cent in annual interest?
And would town councils also knowingly have invested public funds, especially given that they are not aggressive investors?
To us, there are systemic failures in the product, in the selling process and in the targeting of customers. Therefore it matters not if the investors were professionals, or business people, or in fact, organisations like town councils. All of them have been similarly misled about the nature of what they bought because the risks are not commensurate with the returns.
Jeannie Lim (Ms)
High Notes Investor Group Committee
