In early 2006, when the housing bubble in the USA was slowing down, the investment banks were saddled with the mortgage loans and corporate debts that were turning bad. They had to get rid of these assets.

They looked for countries with weak protection of consumers, which were convinced about the merits of using "the light touch" to regulate the financial sector and encourage financial innovation. They found Hong Kong, Singapore and Taiwan.

The investment banks created complex financial products involving credit default swaps and collaterised debt obligations. They wrote the prospectus in legal language that even financial experts could not understand. They marketed these products with misleading advertisements, highlighted the high interest rate paid by these structured products but misrepresented and understated the nature of the risks.

Over 30,000 retail investors were enticed to invest more than USD 1 billion of their hard earned savings in these complex products. Most of these savings were previously placed in secure bank deposits.

These structured products collapsed during the global credit crisis. Looking back at the events, there was no doubt that the underlying assets would certainly fail - it was only a matter of time.

Taiwan acted early to get the financial institutions to compensate the investors.

Singapore acted next to implement a settlement for certain "vulnerable investors" - people who were elderly and uneducated. Investors of small amounts were compensated partially or in full. The total amount compensated was less than 20% of the investment, but the mainstream media gave the misleading impression that the majority had been compensated.

Many investors accepted inadequate offers as they had no other recourse, and pittance is better than nothing. Even "vulnerable investors" who had invested large sums were not compensated, as the offers were made entirely at the discretion of the financial institution.

Hong Kong took almost a year to negotiate a general settlement for investors of the Lehman Mini-bonds (but did not cover the other structured products). The views of these investors, made through their representatives, were taken into account in the final settlement.

Now, only Singapore stands alone in not getting a fair settlement for many investors. A petition signed by 777 investors was lodged with the Prime Minister, who declined to meet the investors or to delegate his officials for this task. Many Singapore investors would be delighted to get a similar Hong Kong settlement.

How can justice be seen to be done, when the people affected do not have any say to influence the outcome? Is this the pinnacle of arrogance in a democratic country?

Tan Kin Lian