WHAT about us? Or, rather, why NOT us?

That was the pressing question on the minds of younger and more educated investors of Lehman-linked products when news broke that vulnerable investors may get some, if not all, of their money back.

Late on Wednesday night, DBS Bank, Hong Leong Finance and Maybank said they are heeding the call of the Monetary Authority of Singapore to give priority to the elderly and the less-educated.

Maybank was the first to announce that it would "take full responsibility in cases where the product was clearly inappropriate given the customer's profile and circumstances".

It also said its management has "reached a decision on deserving cases that warrant full compensation".

Hong Leong Finance went a step further and said it would buy back Lehman Minibonds from investors who are 62 and older and have only primary school education.

These vulnerable investors are expected to get back the original investment amount minus all interest paid to date.

DBS also released a media statement saying they have found a number of cases that did not meet the standards it upholds, and it would be compensating these customers with effect from yesterday.

But it warned that some investors may face the "worst-case scenario" of losing their entire investment amount.

About 1,400 DBS customers in Singapore have invested $103 million in High Notes 5, and 80 per cent are below 60 years old.

The bank estimates it will fork out $70million to $80million in compensation to customers in Singapore and Hong Kong.

Those likely to miss out on these moves by the Financial Institutions (FIs) were forthcoming in their views, but less so with their full names.

Mr Lock, a 57 year old retiree, sank $200,000 into Lehman Minibonds. He wants equal compensation for all. "It's not right," he said. "How can they do that? To me it's a publicity act to pacify the public.

"There should be fair and equal compensation for everybody, instead of choosing and classifying people into different groups."

Others want the compensation criteria to be widened.

Mr Yap, a retiree in his late 50s who, together with his wife, plonked $200,000 into Minibonds, said: "The FIs can give priority (to the elderly and lowly-educated), but they should also take care of the rest because we're all equally misled.

"Education should not be the yardstick. Would a doctor understand an engineer's report full of mathematical symbols?"

Mr Yap, who has a university degree, added: "We may be educated but that does not mean we can understand the prospectus which is full of legal and financial jargon."

Added Madam Lee, 37, an administrator with $300,000 in Minibonds: "We have no qualms about giving priority to the elderly, but it should not be so exclusive. It's like a privilege for the elderly only.

"We are all in the same boat. Our dollar is as hard-earned as that of the retirees."

Former NTUC chief Tan Kin Lian, who has been championing the cause of the investors, cautioned that "the investors outside of the 'vulnerable group' have also been misled into investing in these structured products on the assurance that they were 'low risk'...

"After these urgent cases have been cleared, they should consider giving a fair compensation to the other investors."

Nominated Member of Parliament Siew Kum Hong welcomed the FIs' actions, but stressed: "It's a good first step. But the emphasis is on first step."

THE DEAL

Maybank, DBS Bank, and Hong eong finance have released statements focusing on vulnerable investors affected by Lehman-linked investment products.

MAYBANK

• Has identified and will give priority to Minibond investors belonging to the vulnerable group.
• Has called more than 50 per cent of those identified as vulnerable.
• It has also conducted or scheduled interviews with 70 per cent of those who have contacted it.
• The management has reached a decision on deserving cases that warrant full compensation and is working out details before communicating the decision to these affected investors.

HONG LEONG FINANCE

• Proposes to buy Lehman Minibond programme notes from its elderly and less well-educated customers who meet two conditions:
  1. Main account holder must be 62 years or older at time of the investment, with not higher than a primary school education
  2. Joint account holder, if any, must also not have higher than a primary school education
• Offers, in full and final settlement, payment of the original investment amount minus all interest paid to date.

DBS BANK

• Has found that a number of cases did not meet the standards it upholds and is compensating these customers.
• Total customer compensation in Singapore and Hong Kong estimated to be in the range of $70-80 million.
• Some investors will lose their entire investment amount.
• An announcement will be made next week when the final credit redemption amount, based on prevailing market conditions, is determined.

This article was first published in The New Paper on October 24, 2008.