Saturday, November 15, 2008

OPEN YOUR EYES!--Vote for a truly Caring MP

Yes, this is my main message to those who gathered at Hong Lim park this evening, in response to MM Lee's remarks about investors investing "with their eyes open".

I have been to Hong Kong for a couple of times for the past two months and I have the opportunity to observe first hand on how the Hong Kong government manages this Minibomb crisis.

Both Hong Kong and Singapore Monetary Authorities, in the fight to be THE Financial HUB of Asia, have both foolishly gone into "financial deregulation" mode at the beginning of this century. This is why both Hong Kong and Singapore Monetary Authorities allowed such complex and high risk products to be sold by banks to fixed depositors and retail investors openly.

However, if we observe carefully, the two governments have very different attitudes and approach to the same whole issue. It is really ironic sometimes. The Chief Executive of Hong Kong is not popularly elected in the way of universal suffrage but yet, the approach by his government is PEOPLE FIRST principle. PAP government is "popularly" (well some may dispute this) elected in a General Elections but yet, so far, what we have seen is that this government has sided with the Financial Institutions without even making the effort of conducting a transparent, thorough investigation into the whole thing!

The first thing Hong Kong government done was to set up an independent body to receive complains of mis-selling from aggrieved investors. They did not push them to the financial institutions neither do they just collect complains and do nothing about it. They just collect all complains, vet through and send those whom they think suffered serious misleading selling tactic to be referred for legal suit. The Hong Kong government even went a step further to put money into thier consumer rights association ready for massive legal suits to help aggrieved investors to fight against those financial intuitions!

Although Hong Kong did not have an organization like Fidrec like Singapore, but they are quick to respond in setting up one when they see the need to. Further pressure were applied by Hong Kong government in sending ultimatums to FIs to buy back those financial products. Every moves made by the Hong Kong government were aimed to address justice to aggrieved investors, helping them in all possible ways.

In huge contrast, Singapore government just sit on the issue. MAS just issues statements to push investors to the FIs to lodge their complains. The consumer rights CASE just kept very quiet until people were making comparisons with Hong Kong Consumer Rights group. It seems to me that the whole government machinery is not interested to help aggrieved investors to seek justice. Apart from making the TOKEN call for FIs to pay in full to those "vulnerable group" which consists less than 5% (maybe only 2% to 3%) of the total number of investors, nothing is done to address the needs for the other 95% of investors!

Hong Kong Legislative Council (Legco) has just passed a motion to setup a committee with privilege powers to investigate into the whole issue, right from the Government's role as regulator to whether there are systematic problems in those FIs that sold the products. Ironically, it was in Singapore that Mr. Tan Kin Lian first petitioned MAS to conduct such investigation more than a month ago but up till now, MAS did not act on it.

Not that Hong Kong government likes to have such investigation and the fact is that it does not want such investigation citing negative impact on international business community perceptions. But the truth is, the government does not want itself to be implicated in the lapses as a regulator.

The most important question is whether such investigation would tarnish Hong Kong or Singapore's reputation as Financial Hub of Asia? Actually deep down their minds, both Hong Kong and Singapore governments, they feels that they should not step on the toes of big foreign financial institutions else they might just pack up and leave.

But the truth is, in order to build a real world class financial hub, you will need to provide a FAIR and JUST platform for EVERYONE, including investors and financial institutions. Simply siding or shielding financial institutions from punishment for their wrong doings will not bring about a world class financial hub.

You may have all the big foreign financial institutions from the whole world on your shores but ultimately when investors feel that this government isn't going to protect investors' right and interests in the event like this one, who in his right mind would want to invest their money in the financial institutions on Singapore shores?

They claim that investors were "greedy" in wanting higher returns and thus will have to suffer the losses due to the higher risks. However, its the financial institutions that were the MOST greedy ones, taking 3% to 5% RISK FREE commissions by selling these products to investors who take the same return WITH GREAT RISKS! What fair play or justice could we get from such system?

Thus in my view, if Singapore government is not going to act fairly and just, refusing to call for a full investigation into the whole issue, it will do more harm than good in preserving our nation's reputation as a financial hub. We must get to the bottom of this issue in order for our financial system to readjust itself to become more balance in its approach in attracting the right kind of responsible foreign financial institutes to come to our shores.

Of course making these financial institutions to SHARE the damages suffered by investors may create some hefty losses for them. This is especially for our very own local banks but money lost could be earned back but the lost of a Nation's financial reputation is something that money cannot buy back.

In my view, there will only be two viable solutions to this issue. One, apply greater political pressures on the government to act and investigate the FIs on any wrong doings and gives appropriate punishment and compensation to investors if they are found guilty of any systematic wrong doings. Two, class action lawsuit. Class action lawsuit should be the last resort as it may have many other implications beside being expensive, time consuming and uncertain. Such a lawsuit may do more harm to our Nation's reputation as World Financial Hub. But if the government is still present itself as bias against investors and siding FIs unreasonably, then I think investors would have no other choice but to go for a full blown class action lawsuit. I still hope this could be avoided when government setup a truly independent investigating committee to look into the whole matter.

Hong Kong Legco does have its own difficulty in getting the motion to setup such committee empowered with privileged powers to pass initially due to the resistance of the pro-government parties. It took many protests and concerted efforts by the investors united behind one simple course, to apply great pressure on the main pro-government party to get their Legco members to vote for the motion. They would even go to the party's HQ to kneel down and beg the party leadership to vote for the motion. This is possible if and only if there is a balance of power within the political system. Legco is more or less split into half by the Democratic movement Legco members and the pro-government Legco members. It is the balance of power that exert pressure unto the other party to act according to voters' will.

In contrast, Singapore's political landscape is totally dominated by the ruling party, with just 3 opposition MPs against 82 PAP MPs. There is no political pressure on the ruling party to make decisions that is to take care of people's interests first rather than siding with big corporations blindly. It is an ironic paradox that a "popularly" voted government with "overwhelming majority" which turns out to be lacking in the will to take care of its citizens' welfare vs the interests of big corporations. I would suggest to investors to continue to put political pressure on the government by going to your MPs' meet the people's sessions to register your frustration with the government inaction. Most importantly, they should continue to support our bi-weekly gathering at Hong Lim Park.

In Singapore, there is always social injustice and unfairness existing within the system. eg like a hefty increase in electricity tariff while actual oil price is dropping, petrol and diesel prices are always fast in increases when oil price surge but will take a long time to adjust to the reasonable level when the oil price drops. Diesel price used to be 95 cents per litre when oil price is US$60 to a barrel. But now oil price is US$55 per barrel and yet, diesel price is still stuck at $1.30 per litre. Singaporeans are very mild people that would just take all these injustice as it is, just pay up more without making noise. This minibond issue just happens to awaken us to the fact that social injustice could happen to many people in a severe way.

And the key lies in a more balanced political system that allows the monopoly of power to just do whatever they like. But I hope with this minibond issue, investors cum voters should start to realize the importance of their participation in the social-political context to stand up against social injustice every now and then.

Most importantly we must try to vote in more opposition members into parliament so to maintain the balance of power within the political system. We must vote in people who really care about the people's interests and rights to social justice, be it opposition or ruling parties MPs. As MM Lee has mentioned, investors have bought these toxic products "with eyes open", I strongly urge these voters to vote "with eyes wide open" next time round.

Voting in more opposition MPs is just a means to maintain the necessary balance of power politically so that the ruling party cannot just brush aside injustice and ignore the voters totally on such important issue.

Again, my reminder here, VOTE WITH YOUR EYES WIDE OPEN!

Goh Meng Seng


Anonymous said...

Guys, someone setup a forum already, victims can go there and gather

Anonymous said...

Bravo, Mr Goh!

So are you up to mark to be the "caring" MP that you just described?

For that matter, is there anyone in the opposition to be the "caring" MP that you described?

Election is coming - what are you going to do?