Saturday, December 06, 2008

HK minibond investors consider suit in US

A story about truth.....

Remember MI185? Several years ago, a Silkair Boeing 737-36N crashed into the Musi river. A few weeks later a story in an aviation magazine suggested that the crash was caused by pilot suicide. This was shocking to those who knew the pilot and his friends spoke out against this suggestion saying it was inconsistent of what they knew about the man. They were drowned out later by "mysterious" leaked reports about his insurance policy purchased before this flight, his losses on the stock market, his disciplinary problems, how the flight recorders were switched off before the plunge ...and there was even a story about the MI185 crash occurred on the anniversary of the crash of a group of "Black Hawks"(?) stunt pilots of which the captain was part of the team but couldn't fly on the day of the crash that killed his friends. When the investigation which took years to complete by the Indonesian authorities was closed, the Indonesian insisted that the pilot suicide theory was inconclusive and that conflicted with the findings the US NSTB helping them. The NSTB issued a separate annex that concluded that the crash was caused by pilot suicide. By then many of the passengers' relatives had accepted the suicide theory and went on with their lives. They were all tired of waiting for the conclusions of the investigation, accepted compensation from Silkair and move on with their lives....all except for a small group of 3 families.

This group pursued legal action against Boeing right up the Los Angeles Supreme Court aided by American lawyers. They won the lawsuit 7 years after the crash in 2004. The lawyers found evidence that the servo valve controlling the rudder can actually malfunction at a certain height and temperature. When that happened, the plane wouldl nosedive. They also showed the flight recorders can stop recording under mechanical strain. Not only that, the American law firm Nolan Law Group found that the US NSTB had data showing that the FDR stopped recording only 30 s before the crash not 6 minutes as previously reported but this was not given or ignored by the Indonesian authorities. They obtained this information using the Freedom of Information Act. The Nolan lawyers showed the actions of the pilot was consistent with someone trying to bring the plane back into control rather than crashing it. The company that made the servo valve did not rollover and admit guilt - they appealed the ruling but decided they couldn't win and settled out of court.

What am I getting at?.....These few points:

1. It is not easy to fight big corporations. Do they play by the rules? Why were there information leaks during the investigation?

2. They will fight you even when they know they are wrong....especially when compensation is involved. The idea is to wear you out.

3. The authorities who are suppose to find the truth can make mistakes.

4. Most govt agencies in a certain little island state is more interested in moving on and hoping everything quiet down than pursuing the truth and justice. Justice is a DIY thing. Once you give up, it is game over.

5. American law firms whose survival and prosperity depends class action lawsuits can wage effective battles against corporations. The good ones have a track record of success. They don't win, they don't eat and don't survive.

6. The MI185 families took their fight all the way to Los Angeles, USA where they won. The playing field is not level around the world when you're fighting big companies.

Truth?...what kind of justice you get depends a lot on your determination to pursue it. It would be better if the people who are suppose to be on your side such as elected representatives are helping you - you see that in Belgium, Hong Kong and Taiwan. Banks are not going to feel guilty and compensate you even if they are wrong, they will fight you all the way. You can go through the process of filing complaints like the govt ask you to but you'll soon find yourself at the end of the road alone with the other victims. The idea is if you give up and become silent, the problem is solved in the eyes of the govt. They will just move on and leave this group of people behind just like they did many others. Moving on is an art our govt has mastered and silence is sin that Singaporeans often commit.
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HK mini-bond holders invited to bring suit in US: lawmaker
5 hours ago
HONG KONG (AFP) — Hong Kong investors who were allegedly mis-sold mini-bonds in the collapsed bank Lehman Brothers have been invited to mount an international lawsuit against the institutions involved, a lawmaker here said Friday.
James To, a lawmaker from the Democratic Party here, which is acting for most of a group of some 40,000 mini-bond holders in the city, said US lawyers presented them a proposal for a legal action in a US court.
"The lawyers have presented us a very detailed proposal. Their proposed action will be to sue some of the US institutions involved in the handling of the mini-bonds for a breach of duty according to American law," To told AFP.
More than 40,000 Hong Kong investors, including many retirees, put a total of 15.7 billion Hong Kong dollars (2.01 billion US) into mini-bonds and other complex financial products backed by Lehman Brothers.
To refused to divulge the background of the lawyers or details of the institutions listed on the proposal. But he said that the lawyers had made sure that those were the institutions whose assets remained intact following the bankruptcy of the investment giant Lehman Brothers in September.
The lawmaker said the lawyers had also approached affected investors in other places, including Singapore.
"These lawyers are very aggressive. They have identified the Lehman saga as an excellent business opportunity for them," he said.
His party is now consulting US legal experts for their views on the proposed action. He said the party would only discuss the matter with the investors if they could be sure that the lawsuit would not place the investors under further financial burden.
The Wall Street icon filed for bankruptcy in September as it buckled under the weight of the collapse in US subprime, or high risk, mortgages.
The investors mounted protests against the banks, the Hong Kong government and the city's financial regulators, urging a full refund.

5 comments:

AlphavilleSG said...

That is one hell of a good corollary... If only minibond investors could take their lead, persevere.

Certainly mirrors the same old method use by the PAP govt. time and again.

First the lethargic MAS, who all but abdicated its duties. Then come the blowup at town councils, from the endless roundabout dodging the question, no one has answered, whether will they pursue the losses!

Keep quiet, let the dust settled, life goes on, suck being you since you are holding the short straw.

If we could not imagine access to the $18.5Bn drawn from our reserve that was flushed away, the $16 million are justifiably, funds that could be and should only be use for the improvement and maintenance of the common estate. Not a stake in gambling.

The non-stop sounding that audited reports of TC balance sheets are available means nothing. If they so insist, one should ask since these losses ultimately will show up as a cost, specifically the sinking fund was not disbursed where it sees fit, contravening its purpose, shouldn't the person acting in capacity for its release person be held accountable! It is plain criminal!

The incredulity in which these people operates beckons the question whether one should just forsake this bastardise nation...

The thought about letting the PAP lead us to ruins comes back... regression isn't a bad idea.

Anonymous said...

The PAP govt is interested in getting this lehman brothers issue as murky as the Musi River.

There are monsters larger than the Town Council's Sinking Funds lurking in this muddy river. And they claim first world government. How laughable, this nespotic dictatorship in Singapore.

boxer said...

Very well said, Lucky.

And truth in SG is even harder to come by when marsupials sit in the court and Canis lupus familiaris infest the mainstream media.

Anonymous said...

Another brilliant piece of investigative journalism Lucky Tan. Well done!!!

On the same note, I always wonder why Singapore lawyers never open up the case of Chia thye poh, Dr.Lim hock siew and Zaid. They were never sent for trial yet were imprisoned for 32,20 and 17 yrs respectively. Even murderers and rapists can have fair trials in Singapore but not these 3!

We must open up this case not because of Chia, Dr.Lim, Zaid, LKY or any other individuals that were directly involved but because of Singapore as a nation. Singapore is bigger than any individual. Justice silenced is justice undone.

Singapore must once again uphold ideals such as Justice, Democracy, Fairness and Equality that are universal in nature. We Singaporeans can't always used the ridiculous and cowardly reasoning that Singapore cannot simply because of its geographical location in South East Asia.

The truth is that some older Singaporeans, current generation and future generation of Singaporeans know that PAP use this reason because they never want to let go of its stranglehold on Singapore. With absolute power comes the LEGALITY of squeezing money from the middle class and the poor.

Why is there silence on Capital Gains tax?

Why is there silence on progressive tax from $300,000 onwards?

For 17 YEARS, our CPF money was unable to generate compounded returns. 2.5%(CPF) - 1.2%(inflation) = 1.3% returns p.a. Further more the ratio between CPF and salary is too high.

Why the urgency to increase GST from 5 to 7% when all other avenues have not been used? I believed GST is going to be 10% in 2010.

Singaporeans, there comes a time when silence is not an option but is seen as compliant or submissive to evil.

Cheers

Economist with a Heart :)

Onlooker said...

Minibonds investor here at least must sue for the principal sum that were invested.
Make sure the money that are hard earned (in Singapore case the retirement fund of some of our elderly citizens) are not going to become some millionaires cocktail shrimps or caviar just because they think they can get away with it.(which sadly they did just look at those parties they throw after the bailout)
Hong Kong people are more resilient because they can sue irresponsible MPs there and their political scene are more vibrant.
Another example of the advantage of having a multiparty system.It is more versatile and less "COMPLACENT".