By Tan Dawn Wei and Francis Chan

Three days before Lehman Brothers went bust, triggering one of the world's most horrific financial meltdowns, DBS Bank relationship manager Wilfred Quek was having coffee with his colleagues and debating the fate of the American investment bank.

'My call was that there was no way the Fed was going to let it go down. Some people said it was possible, but not to me and many others,' said the 31-year-old.

'When it happened, I was honestly shocked.'

When he went to work that Monday morning of Sept15, his fifth-floor office at Ngee Ann City was already buzzing with talk of what might have happened to Lehman Brothers over that weekend.

Shortly after noon, he found out that the 158-year-old institution had collapsed.

Soon after, he received a call and an e-mail message from his supervisor asking him and other relationship managers to go to the headquarters of DBS Bank in Shenton Way for an emergency 'townhall meeting' at 6.30pm that day.

In between receiving non-stop SMS messages from friends and colleagues about the grim news, Mr Quek was pulling out clients' telephone numbers from the bank's database: He realised with a sinking heart that those who had bought DBS High Notes5 from him were likely to be affected by Lehman's downfall.

The structured product, which the bank launched last year, is linked to eight underlying shares - including Goldman Sachs, Morgan Stanley, Merrill Lynch, Macquarie Bank and Lehman - on a 'first to default' basis.

This means that should any of these eight reference entities fail, the notes will be terminated and the investor will receive zero payout in the worst-case scenario. This, unfortunately, is likely to be a worst-case scenario.

The DBS High Notes5, to be held for 51/2years, were sold to more than 1,400 retail investors in Singapore for a total of $103million. More than half of them invested $50,000 or less. Some had invested as much as $600,000.

'It was chaos,' said Mr Quek, an engineering graduate who has been with the bank for two years and is with DBS Treasures Priority Banking, which serves customers who have at least $200,000 in their bank accounts.

'I didn't know what to expect, what the magnitude of this collapse was like and how it was going to affect the whole industry and our economy. I was also worried about my customers' portfolios, regardless of whether they had bought High Notes5 or not.'

When more Singaporeans got wind of the news, calls from panic-stricken customers came fast and furious, and some were not even High Notes5 buyers. Everyone wanted to know only one thing: How would Lehman's downfall affect their investments?

Mr Quek did not have ready answers. The management at DBS Bank was also trying to figure out what this dire turn of events would mean.

At the townhall meeting that evening, senior management met with product and markets colleagues at the bank's auditorium.

It became apparent to the few hundred relationship managers that they would have to break some pretty bad news to their High Notes5 customers.

As the week progressed, stories of retirees having put their retirement funds into the notes emerged, as well as how buyers of other Lehman-linked products like Minibonds and Merrill Lynch Jubilee Series3 LinkEarner Notes had also been hit hard.

In all, nearly 10,000 retail investors bought products linked to Lehman Brothers amounting to $501million.

Mr Quek's phone continued to ring off the hook from 8am to midnight for the next week, even as he made calls to customers, dropped in at their homes, or met them over coffee to tell them that their money could be wiped out.

Some were upset, others understanding, but luckily for him, no one turned nasty.

Those who were unsatisfied with his explanation were referred to DBS' Investor Care Centre, a new unit set up to take complaints from the Lehman fallout.

Said Mr Quek: 'People were moving funds from foreign to local banks and they were worried. 'Is DBS safe as a bank?' They were asking questions like that. It had gone to a stage that was beyond logic. Everyone was going through an emotional frenzy then.'