By Robin Chan

THE structured products mess is slowly being cleared up, with steady progress seen in resolving individual cases.

The body that deals with financial disputes reported yesterday that it has reached agreement - or is close to reaching it - in about 72 per cent of the complaints lodged with it. This figure does not include the cases which are awaiting the outcome of court action and further instructions from consumers.

However, it did not disclose how much was paid out in settlements in the resolved cases.

The Financial Industry Disputes Resolution Centre (Fidrec) also did not say whether the people who turned to it received more than the sums they were initially offered by the financial institutions.

Mr Gerard Ee, a non-industry director on Fidrec's board, said: 'I'm glad that people are coming forward to Fidrec and seeking mediation first. These things take time because of the sheer volume. But as far as possible we are settling it as fast as we can.'

The Minibonds scandal led to a flood of complaints flowing into Fidrec.

Altogether, 1,760 cases related to the Lehman Brothers investment product were filed with Fidrec after the United States investment bank filed for bankruptcy last September.

It raised the total number of cases at Fidrec by almost sevenfold to 2,263 for the 12 months to June 30.

The centre had to add more than 30 lawyers to assist in adjudicating the increased number of cases. It also added 3,800 sq ft of office space to form its Fidrec Complaints Centre.

'The monumental increase in Fidrec's caseload has placed immense demands and strain on the staff and resources of Fidrec,' said chairman Goh Joon Seng in the report.

The Lehman collapse saw about 9,900 people here losing most, if not all, of their investments, totalling about $520 million.

They had cash invested in a range of products such as DBS High Notes, Minibonds, Merrill Lynch Jubilee Series 3 LinkEarner Notes and Morgan Stanley Pinnacle Series 9 and 10 Notes.

Investors clamoured to get their investments back amid a huge controversy, with many claiming that they had been mis-sold the products by financial institutions.

The Monetary Authority of Singapore (MAS) outlined a process to help investors resolve their disputes with the firms that sold them the products.

Investors could take their complaints directly to the financial institution and, if they were not happy with that outcome, they could go to Fidrec for settlement.

The MAS said in July that 5,350 cases had been dealt with between investors and the financial institutions, with about 3,900 investors receiving $107 million in compensation.

A spokesman for MAS said that those cases where it was not possible for settlement to be reached between the consumer and the financial institution directly could have been due to 'conflicting accounts of the facts and circumstances for a particular transaction'.

It added that it was encouraged to see that a large number of complaints had been resolved by Fidrec.

Out of the 1,760 cases handled by Fidrec, 593 were resolved by mediation - the first step involving the bank and the investor, with Fidrec facilitating - while a further 324 were settled using an adjudicator.

An adjudicator - who could be a retired judge, a lawyer or a retired finance professional - hears a case when it cannot be settled by mediation.

Mr Ee said: 'If the case is mediated, it means both sides have come to a compromise, where they are willing to accept the outcome.

'Obviously there are always compromises, but in the case that is mediated it means people have reached a certain level of agreement.'

But some investors who had their cases adjudicated said the process was not as effective as they had hoped.

'I felt that the adjudicator could have done better in allowing my case to be heard,' said a 57-year old investor who invested $100,000 in DBS High Notes 5.

'During the adjudication, he just allowed the bank representative to question me and did little to help me get the answers I was looking for.'

This article was first published in The Straits Times.