The case of the Fixed Deposit

During the AGM, I had been accused of causing the MCST to lose money because I
had refused to sign for the transfer of a Fixed Deposit(FD) to three banks,
against the advice of the Managing Agent(MA) and against the wishes of the
majority of the council. When this was brought up in the AGM, my mind was on
debating those Resolutions to be able to give a good rebuttal. Eventhough it
does not matter too much now, I believe it is necessary to put the record
straight for future reference.

In Feb 2013, the MCST's FD at Bank A was due to mature. The MA was tasked to
search for other banks which may offer better rates. It came up with three banks
offerring the highest rates. Eventhough they were not reputable banks, the
majority of the council agreed to spread the FD from Bank A across these three
banks. Even when a private individual wants to park his money in a bank, he will
not blindly pursue high interest rates. His main concern will be the risk to the
loss of his capital, partially or wholly. Higher interest rate carries a
higher risk to the loss of the capital. I asked the councilors how many of
them had parked their monies in those three banks. Only one said she had FD in
one of them. Yet they still agreed to the transfer of the MCST's Fund over to
these banks. If they don't park their own monies in those banks, why do they
agree to do so for MCST's Fund? To me, it is obvious that in this case they
don't have the interest of the MCST in mind. I therefore refused to put my
signature to approve the transaction. I told the council that its term was
coming to an end in a month's time and a new council would then look into the
matter again, and there would be new FD rates offered by banks.

In response, Doris instructed MA to withdraw the FD from Bank A and deposit
them into the MCST's non-interest bearing current account and said this would
be brought up for discussion in the AGM. The majority of the council
agreed with Doris, with Lionel busily calculating out the loss due to missed
interest. I pointed out to Doris that a local bank was offering interest rate
not too far below those of the three banks. She brushed it aside and insisted on
her original instruction. Her overriding concern then was to use the incident to
show me up poorly during the AGM. Point of note: if the money were to remain in
Bank A, it would have continued to earn interest because there was a standing
order to rollover to monthly FD after the yearly FD matured.

So, during the AGM, as planned, she explicitly stated that I had caused the MCST
to loss bank interest in the MCST's Fund. This is a very good example of the
tyranny of the majority. Because they have the strength in numbers, they believe
they can do anything they like. In this case, they had worked as a team against
a fellow councilor who was outside the team, without any concern for what damage
their action may have caused the MCST.

Mr. Ng Kien Aun
Blk 88 #10-05

Cunning, very cunning move.

Now we get a more truthful picture of what had happened.

OK, now we know d 3 banks. I wouldn't put my own money in them. If d M.A. is recommending them, then it is unprofessional. It is giving bad advice to d council.

I have noticed the ads put up by Singapore Deposit and Insurance Corporation (SDIC) in the newspapers. The most recent one indicates that only $50,000 under one name in one bank will be guaranteed. Then this article. http://in.reuters.com/article/2013/09/13/india-banks-singapore-idINDEE98C06620130913?rpc=401&feedType=RSS&feedName=businessNews&rpc=401
During the last AGM, there was a discussion about the banks in which our MCST fund was deposited. One of those banks is the State Bank of India. It now seems like this is not a good decision. Would the council consider terminating the FD prematurely or risk losing it all?
Read further about this. http://www.tremeritus.com/2013/09/17/singapore-steps-up-scrutiny-of-some-indian-bank-branches/

Even RHB, another bank in which our MCST fund is deposited, has been in the news recently. The Malaysian EPF, a partial shareholder, is considering buying over it 100%. This is abnormal. EPF only invests in companies, it normally does not want to take ownership of a company. Is this a bail out?

Is our fund safe in those banks which the council had decided to put our MCST fund in?

Here is another arricle:
http://www.financialexpress.com/news/state-bank-of-india-bank-of-baroda-punjab-national-bank-debt-rating-downgraded-by-rating-agencies/1173154

The MCST has $200K, the largest of three chunks, deposited with the State Bank of India.