The Straits Times, Singapore, 13th February 2000

By LEONG CHAN TEIK

DISSATISFIED with the lack of a satisfactory solution to the Clob impasse after 18 months, the association of Clob investors has now taken initial steps to help its members pursue legal action.

Mr David Gerald, president of the Securities Association of Singapore (Sias), told a press briefing yesterday: "We are serious about legal action."

Sias has appointed Allen & Gledhill to handle the case, which is aimed at making the Malaysian authorities transfer frozen Clob shares into the accounts of investors.

The firm's senior partner, Mr K. Shanmugam, who is also a Member of Parliament, will oversee it. The firm will appoint Malaysian lawyers to help fight the case.

Mr Gerald said: "The Kuala Lumpur Stock Exchange has not been willing to come to a reasonable solution and gives no indication that its position will change. Sias must therefore prepare to support investors who want to take legal action to enforce their rights."

These Sias members would be asked to contribute nominal amounts to a fund to pay for legal fees.

It could be $150 or $200 per person, depending on the number of investors who were interested.

The number could be high going by a show of hands at a Sias dialogue yesterday with 1,200 investors.

Mr Gerald told them that details on the course of action would be available at a meeting with investors in two or three weeks.

This is, he said, "a turning point" in the saga over some RM19 billion (S$8.5 billion) worth of Clob shares which have been frozen by Malaysian authorities since September 1998.

The shares are mostly held by about 170,000 Singapore-based investors, a third of whom are members of Sias.

Several private Malaysian companies have made offers to buy or transfer the shares to Clob investors, but the offers have fallen short of their expectations.

Mr Gerald reiterated that investors were free to take up any of the offers.

On the legal suit, he said he was confident that Malaysian courts would mete out justice fairly. "We know we have a strong case. The Malaysian Central Depository has a legal obligation to transfer the shares to Clob investors."

The suit could take up to two years to be resolved though, he said. In a legal course, Sias will represent its members only.

Mr Gerald urged non-members to join the association so the legal costs could be spread out.