The Channelnewsasia link to this story is here. I do not recall reading a similar report on this story in the Straits Times. If someone has, please notify me by making a comment of it in this post. If the Straits Times did omit this story from their line-up, then it's one more annoying thing I can chalk up to our national paper.
There is no indication that Hong Kong's Consumer Council, the watchdog cited in the headline, will actually proceed with the suit. FYI, the Consumer Council is the equivalent of Singapore's CASE.
Still, this story is significant. One thing the Straits Times had right is that the Hong Kong and Singapore authorities are both looking over each other's shoulders in trying to calibrate the right response to the Lehman Minibonds (and DBS High Notes) fiasco. And this is not merely altruism in trying to find the right resolution for investors who have lost massive amounts of money, although the Straits Times didn't specifically mention this point.
At first blush, it would seem that the actions of the HK Consumer Council and Singapore's CASE should have no bearing on how the governments of the two territories manage this public relations and financial regulation disaster. After all, they are both NGOs and consumer advocacy groups. However, as this is Singapore we are talking about, how NG an NGO actually is is far from clear. I have no idea how non-governmental the HK Consumer Council is (especially since Beijing has called the shots in Hong Kong since 1997), but I think it's a safe bet that CASE isn't a very pure NGO, as NGOs in Singapore go. For example, if you think that NTUC is run without government "input", I have a bridge I want to sell you (and BTW, NTUC is the parent organisation of CASE).
Without even meaning to, the differential treatment (HK vis-a-vis Singapore) of this Minibonds fiasco threatens public embarrassment for the government of one of the two territories. Because consumer advocacy groups are perceived (never mind the reality, whatever it may be) to be linked to their respective governments, how vigorously the consumer advocacy groups in HK and Singapore assert their stakeholders' rights in this financial debacle will have direct implications on how the citizens in their respective territories view their government's willingness to prioritize their citizens' interests over, say, the big banks.
In short, Singapore risks embarrassment if it is seen as doing less than the HK government. What aggravates the matter is that DBS is at the heart of this financial fiasco, since it is not only a distributor, but also the bank that structured some of these products (DBS High Notes). Now, the government is fond of saying that it does not take an active role in the day-to-day management of the companies that it holds in its investment portfolio (via Temasek Holdings and GIC), and even if this is indeed true (which, for the record, I largely, but not totally in all circumstances, believe), it does appear unseemly that a major government owned bank has now lost considerable face after losing the money of investors who also happen to be citizens, and as I have mentioned before, been unendingly portrayed in the media (also government controlled, how ironic), as poor, defenseless retirees.
This is just sooo perfect. Now bear in mind, the irony that a major government owned bank has been responsible for losing the life savings of citizen retirees through selling them risky, questionable and inappropriate financial dreck is a news angle that has NOT been explored in the local media. Don't hold your breath for that tasty little story.
Separately, I'm not a lawyer (and readers who are in law, I would appreciate your comments here), but it seems to me that this is just crying out for a lawsuit. If investors in Singapore and/or Hong Kong file a class action lawsuit against the relevant banks for mispresentation, mis-selling or just plain old fraud, then perhaps the consumer advocacy groups should also be filing amicus curiae briefs, at a minimum. If anything, at least this would help clear the air on what the banks should sell, how they should sell them, and how these products should be regulated in general. This would all help in making the retail investment scene that much safer.