A Disclaimer is NOT a ‘Get out of Jail Free’ Card

Very quickly the Monetary Authority of Singapore (MAS) cleared DBS of any form of impropriety around the sale of Hyflux perpetual securities.

In its statement MAS noted that “as a distributor of the securities, DBS complied with MAS’ requirements to configure its ATM screens to remind investors to read the disclosure documents before making their applications”.

MAS also highlighted that through its national financial programme MoneySENSE, it has been working with industry and other stakeholders to educate investors about the features and risks of the various investment products and DBS had noted some potential risks in its documents.

With these 2 statements it cleared DBS and passed the buck to investors who clearly “should have known better”.

But how many of the 34,000 affected would have noticed or seen these?

The majority go on the reputation and trust of MAS, DBS, Hyflux and all the Positive Government Statements around them so is it fair to effectively use a disclaimer to walk away from almost a billion dollar loss for the public while it seems institutions are hardly hit and the PUB may end up with the assets for free?

Surely this using a disclaimer and the speed of dismissal is a matter of public interest and maybe our Attorney General should be getting involved here?

Questions should be asked about the board of Hyflux, what they knew and when?

Questions should be asked of the Auditors KPMG and what they knew?

Questions on how Tuaspring and Hyflux were valued and represented?

Maybe we should also look at who was formerly a shareholder and bailed out early?

Or why if everything was so positive no local banks invested?

And especially how DBS could be cleared so quickly, and investors effectively told bad luck.

Basically, who knew what and when, what were their motives, what was presented or omitted and how were the securities sold?

All of which have a far greater impact than the responsibility covering technicalities and needs more than a few days to get to the bottom of.

There are serious legal questions here which impact the public, the authorities and the trust we have in our government and institutions as a whole and cannot be so easily brushed aside…

Or given our Attorney General appears busy on the PM’s nephew and Sister in Law maybe our ex Attorney General Walter Woon can pick this up after defending the PM’s sister in law instead?

If the Hyflux investors put in $100 each to a pot they could do a class action law suit with a $3.4 million war chest and could enable him to lead a team of high powered lawyers and forensic accountant to ask all the difficult questions and more and maybe recover some money from those who profited from Hyflux before its downfall if they knew things investors were not privy too and at least make recommendations so this can never happen again?

Something that clearly didn’t happen after the Lehman Minibond scandal of a few years ago.

Far to often technicalities and institutional disclaimers are sited as reasons that authority figures and companies should not be held to account or proper investigations don’t happen, but this should not be one of those times.

Was there criminal or legal impropriety on the behalf of anyone involved in this Hyflux scandal?

We don’t know but given the questions already surfaced, the scale and the impact surely it should be investigated thoroughly to be certain.

If there was wrongdoing and it is not looked in to on such technicalities then maybe potential criminals can just manipulate victims to sign a document before they are robbed and then the police won’t bother to investigate because the thieves can wave the magic disclaimer get out of jail free card and the police can say well that’s alright then!

 

Brad Bowyer

 

 

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9 Responses to “A Disclaimer is NOT a ‘Get out of Jail Free’ Card”

  • Want to Know:

    Did MAS also investigate Seet Li Lin, Jho Lo’s kaki? If it did not, izzit becoz he used to work in MAS or has guan xi with MIWs?

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  • LIONS:

    Lehman miniBOMB$!
    WHO SOLD THEM?
    DBS BANK,YES TH’S DBS !
    WHO GOT SCREWED?
    sgs,common sgs,both the staff of DBS n small investors.

    Who got away with it?
    The CEO N BOD who were the ones pushing the staff to sell those bombs?
    The CEO GOT COMPENSATED FOR EARLY EMPLOYMENT *RETIREMENT*?

    THIS GOVT IS REALLY SHITTY!

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  • MarBowling:

    Great comments by Bros Brad.

    Most likely ONJ Lumpah has revealed to her best friend who is a major shareholder that HighFlux was in deep shits and advised her to quietly chabok before SHTF! No wonder ONJ Lumpah and her buddy can still smile all day LOONG while about 34,000 investors keep on kpkb all day and night LOONG on social media and at the HLP!

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  • patriot of TUMASIK:

    Brad after 30 plus years and a Patriot…I am sure you are well AWARE of how it is DONE…Win I take Lose it is on you leh!!!

    The Jinx Lost 1 Billion on a hard disc and kindergarten INVESTMENT…and she walks away with a Pay Check of $$$MILLIONS…no accountability needed Hor!!! after all, she produced the Next-in-Line for the Dynasty…

    UNLESS the Patriots Destroy the Dynasty and return it to the People & Patriots of The Republic of Singapore

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  • oxygen:

    @ BRAD BOWYER – GREAT WRITING OF INFORMED PIECE from varied perspective.

    Brad Bowyer:In its statement MAS noted that “as a distributor of the securities, DBS complied with MAS’ requirements to configure its ATM screens to remind investors to read the disclosure documents before making their applications”.

    MAS also highlighted that through its national financial programme MoneySENSE, it has been working with industry and other stakeholders to educate investors about the features and risks of the various investment products and DBS had noted some potential risks in its documents.

    With these 2 statements it cleared DBS and passed the buck to investors who clearly “should have known better”.

    High-yield bonds has risks profile ENTIRELY DIFFERENT from IPOs or equities. It should not, in my best informed judgment, sold through ATMs.

    Why?

    Nobody standing in front of an ATM reads an online digital disclaimer statement when other users/customers of the bank waiting anxiously behind waiting for the turn to assess and use.

    Both MAS and whichever seller/s, knows this and it is therefore unsuitable to be sold online DESPITE DISCLAIMER STATEMENT.

    Even on corporate roadshows of capital raising power-point presentation, investor visualise disclaimer clause as if it is a passing cloud and soon forget about it in a moment of buying decision.

    Take a look at the powerpoint presentation this mining entity on a capital raising exercise – Blackham Resources. Right at its beginning it has in broad large print

    DISCLAIMER AND IMPORTANT INFORMATION but the details of it published in small font print.

    https://www.asx.com.au/asxpdf/20190321/pdf/443ns9bqz35wmx.pdf

    WHO CAN TELL ME WHAT IS SO BADLY WRONG OF THIS PRESENTATION?

    The share was trading around 4c and the rights with attaching option was priced at 1.5c BUT IT WAS 75% undersubscribed.

    https://www.asx.com.au/asxpdf/20190411/pdf/4447kkc5qlnmzz.pdf

    Blackham Resources was wildly optimistic. What went wrong?

    It is the CONTENT in that power-point presentation, NOT THE DISCLAIMER which is a statutory requirement in Australia and stock exchange listing rules.

    The CONTENT is not difficult geology to comprehend for OZ moms and pops.

    SO WITH THE ATMs HOW COULD DISCLAIMER CLAUSE BE A RELEVANT CONSIDERATION to excuse fiduciary responsibility when even in print and power point format does not work in practice?

    For high yield/high risks bond, ATMs cannot be used as a distribution channel, then that become the choice defence as the “get out of jail free card” exoneration of duties to naive investors.

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  • oxygen:

    @ Brad Bowyer

    ACRA IS SAID TO BE TAKING AT LEAST A CURIOSITY INTERESTS in the accounting and auditing compliance standards as applied in Hyflux. So it is bewildering to say the least of the speed and seemingly resolute determination of MAS REGARDING public liability of sellers OR OTHERWISE of those high risks securities through ATMs

    Brad Bowyer :We don’t know but given the questions already surfaced, the scale and the impact surely it should be investigated thoroughly to be certain.

    AND

    Brad Bowyer: If there was wrongdoing and it is not looked in to on such technicalities then maybe potential criminals can just manipulate victims to sign a document before they are robbed and then the police won’t bother to investigate because the thieves can wave the magic disclaimer get out of jail free card and the police can say well that’s alright then!

    Me thinks the police has no place to be the judge and jury in any criminal matter to simply look the other way – even when victims were manipulated by any thieves to sign consent.

    Why?

    It is both in the statutory law and common law application of theft definition – THEFT OF CRIME CAN OCCUR WITH CONSENT OF THE VICTIM. For example, Party A incorrectly deposit $1,000 into the wrong account owned by B, they are no relations, and have no previous dealings. On notification by A, Party B refused to return the money, but instead close the a/c by withdrawing all the money therein.

    In statutory law, B committed theft with the “consent” of A prior accidentally granted. Closing the a/c and spending the money thereafter by B is in common law concepts a criminal matter of “obtaining financial benefits by deception (closing the a/c).

    In matters like this, the police & THE LAW can’t look the other way.

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  • Haigen-Diaz:

    I’m beginning to sense that the level of anger and frustration at MAS, DBS, Hyflux and all the bankers, CEOs of the financial sector are reaching revolution levels.

    Why should the hard-working class, making a median wage of around $30K a year give any of their money to people who had been involved in such ‘wild’ speculation? What happened to the idea that buying stocks/bonds and making bets on the market were actually bets, and not guaranteed payoffs?

    “Footing the bill” and “rescue” infers a real-time (not imagined) failure by highly pedigreed should’ve-known-better Hyflux, KPMG execs who, by all evidence to date, remain in a state of delusional denial of their ‘incompetence’.

    Surely, the government cannot be any more incompetent than the idiots who, through their unbridled ineptitude, brought Hyflux into such a disaster! Why not take over the failing company, fire all the incompetents, nationalize it so that the tax payers who are being asked to foot the bill will get something in return.

    With their net worth being so low, just buy them outright so it can be restructured back to healthy condition and then sell them to the private sector later for a profit? Taxpayers would love that!!!

    People have been told for so long that the government is the problem whereas the private sector can do no wrong and so it will take time for more people to see this proposition as false. I only hope that by that point it isn’t too late.

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  • Regime change is the solution:

    Hyflux basically issued “junk securities” (like US subprime loans) to the public. Why was this allowed by MAS? Were they labelled as “junk” or not investment grade in the prospectus? Were the banks required to tell the public that the returns are high because of high risk?

    Who was the financial adviser of Hyflux when it issued the preference shares and perpetual bonds? DBS?

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  • Blame MAS and MOF:

    Regime change is the solution:
    Hyflux basically issued “junk securities” (like US subprime loans) to the public. Why was this allowed by MAS? Were they labelled as “junk” or not investment grade in the prospectus? Were the banks required to tell the public that the returns are high because of high risk?

    Who was the financial adviser of Hyflux when it issued the preference shares and perpetual bonds? DBS?

    Was Heng Swee Keat MAS MD or Finance Minister when Hyflux sold the junk securities to the public? He should be held accountable.

    BTW, was Tharman MAS MD or Finance Minister when Lehman Mini-Bonds was sold to the public? He should be held accountable.

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