Great Eastern spends S$250 mil to buy back GLC

Great Eastern Singapore is spending S$250 mil to buy back GreatLink Choice from 18,000 customers.

GLC is a product aims to provide investors with fixed annual payouts ranging from 3.5 to 4.9% and refund of principal on maturity although both returns and capital refund are not guaranteed. The values of the GLC plans have plummeted between 40 and 80% due to the collapse of CDOs.

Source: The Strait Times

MAS takes stern action

10 financial institutions involved in the marketing of Lehman Brothers mini bonds in Singapore are banned by MAS from selling structured notes for between 6 months to 2 years. The 10 financial institutions are:

1. DBS Group
2. UOB Kay Hian
3. OCBC Securities
4. ABN AMRO's Singapore branch
5. Maybank Singapore
6. CIMB-GK Securities
7. Hong Leong Finance
8. DMG & Partners
9. Phillip Securities
10. Kim Eng Securities

Source: The Star

Compesation Costs DBS up to S$80 mil

It will cost DBS Group S$70 mil to S$80 mil in compensating Lehman minibond investors in Singapore and Hong Kong.

Some facts:

• 3,300 investors in Hong Kong bought the product, amounting to S$257 mil.
• 1,400 investors in Singapore bought S$103 mil.

DBS admitted that there were cases where the sale did not meet DBS' standards.

Source: The Star

DBS to Compensate Customers

DBS has decided to compensate customers who bought into Lehman's minibonds. The bank actually admitted that the sale of Lehman's minibonds did not meet the bank's standards in some cases.

Source: Business Times

Minibond Holders Potentially Lose S$639 mil

The Monetary Authority of Singapore (MAS) said that about 10,000 people in Singapore bought a total of S$639 mil of the failed Lehman mini bonds. A number of these people are retirees, losing their lifelong savings, some even contemplate commiting suicide.

MAS is investigating the complaints filed by the investors accusing the financial institutions of mis-selling. Financial institutions that were involved in the seling of Lehman mini bonds include DBS Group, Hong Leong Finance, UOB Kay Hian, OCBC Securities and ABN AMRO, now part of the Royal Bank of Scotland.

Source: Asiaone Business, Business Times

Independent Parties for Lehman Products Investors

Monetary Authority of Singapore (MAS) has instructed DBS and HSBC to appoint independent parties to oversee and investigate complaints from investors who purchased structured products linked to Lehman Brothers.

The move by MAS is not equivalent to ordering financial institutions to pay compensation. It is meant to assure investors that their complaints will be heard, documented and reviewed fairly and swiftly.

Source: Business Times