An account from an individual who got burnt by another Chinese con-job, China Paper.
I remember once being in the presence of a former top remisier cum trader who lost heavily in the debacle of Clob meltdown. He was into margin trading, easily holding millions of dollars of Clob shares that turned into "nothing" and resulted in his big debts. Then he had to slog into many jobs to make ends meet. There was another top player whom I met driving a taxi and he recalled this period with much lamentations and sighs. He too lost everything. There were easily many stories of that generation of stock players as Clob shares dominated the stock market back then. There was no way not to play Singapore stock market if you do not engage in Clob shares.
The Clob fiasco was a result of Singapore government insisting that the local exchange had a right and it was safe to trade in Malaysian shares in Singapore system. Back in the nineties and eighties, Clob shares was the rage. It was a period of ruin for many who lost almost "everything" when the Malaysian government decided to "screw" the Singaporean investors and traders as it made the decision that all stock trading in their counters outside Malaysia is illegal. The Malaysian government did it when it realised that the Singapore government was not going to help in bailout funds with "no strings attached'. So it had its revenge by undertaking this action on Clob shares and Singapore stock investors in Clob shares were "forced" to sell them at a pittance to a holding company who scooped it all up at a very huge discount to resell them in Malaysia and this holding company was linked to the very top in Malaysian government - Dr Mahathir and his kaki, the finance minister dude, Daim. We were thoroughly screwed by these fellows.
This was in conjunction with the entry of Indonesian companies to Singapore stock exchange in the name of "takeover" and big connections with President Suharto. Those stocks were the rage and again fell to near "nothing" when the Asian financial crisis emerged and Suharto fell. At least on this count, I will perhaps say "caveat emptor".
But I cannot say of subsequent ruinous one, allowing the entry of dubious Chinese firms into Singapore stock market which to me, is fraud and the government for all its acclaimed regulatory fame, performed miserably and to date, nobody has been called to account for it. Its lack of controls over the IPO listing managers who did not do its due diligence exemplified their greed in promoting these fraudulent firms. These IPO listing managers have meanwhile conveniently disappeared from the present scene if you can recall these names. The key question is how could they not know when they were supposed to do their due diligence. The financial figures were all fraudulent - the non-existing profits and revenues. In US, for fraud cases like Enron etc, people were called to account for them. Here it is nothing. There is no way you can get the owners and key management figures to account for them. The law does not apply as long as they do not want to come back here. Have not the government figure it out when they allow these BVI companies to do their listings here?
Singapore becomes the sucker. Its investors and players are the suckers cum victims. For one thing, you cannot believe everything the Government here say. They are mere mortals and they did make terrible mistakes which in this case, has not been called to account for.
Before you commit your CPF funds into professionally-managed unit trust and Singapore second-liner stocks, so far the return has been terrible and if not, very much worse off then doing nothing in the first place. The liberalisation of CPF funds for stock trading was to help usher the entry of so called professional fund managers here, but it has been a bad piece of cake overall. There are more charlatans in the financial industry than you realise. Mark my words.
