By Liew Hanqing

MIS-SELLING is a buzzword most Singaporeans associate with Minibonds, High 5 notes and banks pushing for a quick sale.

But Mr Lee Hoe Siong, 60, may now lose $60,000, half his retirement savings, because of alleged mis-selling, not by a bank relationship manager but by his own brother.

In March last year, Mr Lee, a company driver, was urged by his younger brother to invest in the US oil and gas industry through OilPods, a local company which has links to oil and gas projects in Louisiana, Oklahoma and Texas.

Never mind that he could not read English or really understand what he was in for.

He told The New Paper in Mandarin: 'At the time, bank interest rates were low, and my brother told me I could get a much better return from investing in OilPods than putting the money in the bank.'

'Absolute trust'

He said: 'I had absolute trust in my brother because he has always been responsible for handling our family's financial matters.

'I had bought about eight insurance policies from him earlier,' he added.

Mr Lee's brother, an insurance agent, also worked as a consultant for OilPods, but has since quit.

He declined comment for this report, but had insisted his brother knew the risks involved in the investment.

However, Mr Lee, who has Secondary3 education in Chinese, said he knew he was investing in US oil and gas projects, but was under the impression that his OilPods investments were somehow linked to the insurance company his brother works for.

At the time of his first investment, Mr Lee had just undergone heart surgery.

He received an insurance payout of about $30,000, which he used to invest in Powder River Petroleum International.

But this year, it got into legal trouble.

This could wipe out the entire value of Mr Lee's investments.

An OilPods spokesman told The New Paper that more than 2,000 of its investors, mostly Singaporeans, had invested in Powder River.

About US$46 million ($68m) worth of working interests in the company were purchased by OilPods investors over the last four years.

The spokesman added that a temporary injunction has been placed on Powder River, and if there are sufficient assets available, 'some level of recovery work' can start and 'investors will be paid accordingly'.

It is unclear how much of investors' capital can be recovered, if at all.

Mr Lee said after his first investment, he received about $150 in investment yields from OilPods, which was deposited to his bank account.

He continued receiving such deposits for about nine months.

'I was receiving returns on my investments, so I believed everything was going to be fine,' he said, leafing through a thick stack of OilPods-related pamphlets and documents, which he said he did not read in detail.

In October last year, Mr Lee invested another $30,000 through OilPods in Biamante Texas, a US natural gas project, after attending an investment talk at OilPods' office in Suntec.

OilPods' investment offerings were even featured in SmartInvestor, a local investment magazine, three years ago.

The magazine report said these investments 'could potentially create multiple cash flows and generate attractive returns'.

Two letters sent

However, in May this year, Mr Lee got his first hint that not all was rosy when he received a letter from OilPods informing him of a lawsuit involving Powder River.

He ignored the letter at the time because he does not read English and thought it was just a routine update.

In September, he received yet another follow-up letter from OilPods informing him that his investments were in jeopardy.

Said his daughter, Miss Joe Lee, 28: 'When my father showed us (his children) the letter, we were shocked because we didn't even know he had made these investments.'

She claimed she then confronted the uncle who had sold her father the investments.

He, in turn, claimed he had fully explained the OilPods investment to her father and that her father had been aware of the risks involved.

She said: 'My father is retiring next year. He shouldn't have been encouraged to make such a risky investment.

'But my father is a very simple and honest man,' she said.

'He has always been very supportive of his younger brother - whatever he sells, my father would try to buy whenever possible.'

After she learnt of her father's investment woes, she went to OilPods' office to learn more about the company.

It was there that she found out even more about the ongoing legal proceedings in the US involving Powder River.

She said: 'I decided to approach the authorities for help. But it has been difficult because OilPods isn't classified as a financial institution.

'If I want to go through mediation, OilPods would have to agree to it and we would have to pay a fee, too.'

She added that she is reluctant to pursue legal action against OilPods because of the potentially huge legal fees involved.

Case helps

Mr Seah Seng Choon, executive director of the Consumers Association of Singapore (Case), said one complaint has been made against OilPods.

He said Case has written to both the Monetary Authority of Singapore and the Commercial Affairs Department about OilPods to get them to look into the matter.

On whether he blames his younger brother for his predicament, Mr Lee said resignedly: 'We trusted him a lot over the years. After this, naturally, our confidence in him has been shaken.

'It's a large sum of money and of course I am upset about it. But I'll just treat it as bad luck that this had to happen.'

This article was first published in The New Paper on November 07, 2008.