This is a contribution from betsybug:
Dear Mr Koh
I refer to your recent interview with the Straits Times published in that paper on 12 Nov 2008.
"I believe that we will do things differently"
DBS will earn the thanks of your future customers, at least those intrepid ones who dare risk their funds in releasing them into the tender care of your bank.
But this is small comfort to the affected High Notes customers who have been forced to literally pay the price of DBS's lackadaisical ways of selling products in the recent past. We are the ones to whom the bank has pushed the burden of proof of its own misdeeds.
You want now to build a better structure to protect the bank from future accusations of mis-selling and misrepresentations. That is good. But DBS should never have betrayed the trust of its customers who looked to it for a safe haven for their money in the first place. That would have been better.
So the question to DBS is: you made a mistake; people have complained; you have now learned a painful lesson; but why are those who brought this lesson to you the ones to pay the entire price?
"The financial landscape has changed"
Of course it has. But the mark of a person or an organisation is not evidenced by what happens in the better times, but by what happens in the dark ones as well. By all its recent actions, DBS has proved itself to be a fair weather friend, ready with false assurances and a glib tongue, and take our money on a sunny day, but run to the shelter of legal clauses when the storm breaks.
The issue with High Notes is not that Lehman Bros. has collapsed; rather it is about what customers have been told by your representatives when they were selling these products. So, even if it was just one week after the sale, and Lehman is still the darling of Wall Street, we will still have a problem with the unrevealed risks that were never properly explained. Lehman is only the instrument with which this can of worms was opened to public view, and the sight we gained of the product and the inner workings of DBS is not a credit to your bank.
The question to DBS is: when will DBS finally take responsibility for its actions instead of sweeping it under the convenient Lehman rug?
"preface every investment...with a summary sheet"
May we hope that the future summary sheet includes all the facts pertinent to making an informed decision, and not just the positive points as we have seen in various "fact sheets" DBS has put out on High Notes to bait the unsuspecting customer?
I'd like to ask: when will DBS learn from the medical profession, and that is, in treating the financial health of its customers as of the utmost importance, and to give proper advice so that its customers have all relevant information, and not look on customers as just a contributor to the quarterly reporting?
"OCBC and UOB sold preferential shares to investors"
Really, making this argument must surely be beneath DBS. Unlike those preferential shares, DBS's High Notes 5 is now worthless (at least according to DBS). Unlike High Notes whose complexity is beyond even the Relationship Managers to comprehend, those shares are easily understood financial instruments. And unlike High Notes, those preferential shares were not misrepresented.
If High Notes customers had DBS preferential shares instead, we would like to assure you that we will not hold DBS responsible for any losses. But we hadn't, and therefore we will.
A question: will DBS never own up that it has simply sold High Notes to the wrong set of people, never mind who has read what, what is written where, and who has told whom what and when?
"We don't like the fact that people have lost money"
Guess what? We don't either. Especially when the basis of calculating that loss to be a complete one is based on a choice of formulae that needs to be questioned. And questioned closely.
"I'm extremely proud of the people in DBS"
These are fighting words and they will probably cheer the collective hearts of your shareholders in a gloomy time, but do not be surprised that they bring little comfort to your customers, especially those ones to whom you have sold those unfortunate High Notes, and the 900 employees you will be retrenching.
Nowhere in the interview do we read of your sympathy for your High Notes customers, many of whom have been with you for twenty, thirty years, and who because they never thought the "national bank" would play them false, put money in on the strength of that relationship.
Question: can this be any firm foundation to rebuild people's trust in DBS as you say you want to do?
"I can tell you they've taken some abuse"
This is unfortunate. I recall that Mr Rajan Raju appealed for civility during the dialogue sessions. But please understand that when people put money that they have spent long years accumulating, when those funds are their plans for their children, their dreams for their own futures, when those savings may be someone's hopes for a better life, and when they take that money and entrust them to your bank on some given understanding that it will be safe, and when that trust is proved misplaced, and that understanding is turned upon its very head, then please forgive them for being just a little upset.
People in Singapore are very tolerant by nature and are slow to to be riled. But, sir, DBS has played fast and loose with people's lives and they are the ones who have taken much abuse. Do you wonder then at their reactions?
"Many questions are sent heaven-wards, but no answers have yet descended"