The central bank has given DBS Bank an unprecedented public censure and instructed the 27%-owned Temasek bank to put aside S$230m to cover its operational risks. Gd for MAS, and SM Goh (chairman of MAS), Tharman and Hng Kiang. The last two ministers also sit on MAS’ board.
There is another thing to be put right, SM, Tharman and Hng Kiang.
DBS’ Hong Kong unit recently agreed to pay out HK$651 million or about S$115 million to some clients who bought products linked to Lehman Brothers. As HK$1.3 billion of notes were sold, the compensation received works out to 49% of amount invested.
In S’pore, it sold a similar product, HN5 Notes. DBS issued, arranged and distributed HN5. A total of S$103.7 million worth of HN5 were sold to 1,083 retail clients between 30 March and 30 April 2007, according to a July 2009 MAS report.
The same report said DBS compensated investors S$7.8 million.
What this works out to is 7.5% of amount investments versus 49% in HK. Is this fair? Product is the same.
Force DBS to treat the S’porean investors fairly, ministers. You have the moral authority.
If you do, I’m sure the compensated HN5 investors, family and friends will remember the good deed when the GE comes. It’s “win, win” except for DBS. And even then its a peanutty S$51m, 44% of amount paid to the HongKies.
BTW I did not buy any of the credit-linked notes that failed. Not that “greedy”.