In 1999, the Malaysian government seized shares worth $5 billion from 172,000 Singaporeans who had invested in the Malaysian stock exchange's second board, leaving the investors stranded. A 55-year-old lawyer, David Gerald, rose to the occasion and made the Malaysian government yield after nine months. This was the beginning of the Securities Investors' Association, Singapore (SIAS). David Gerald, CEO, SIAS, spoke to Rayana Pandey about how unplanned investments in stock markets could be dangerous.
What is the mandate of SIAS?
SIAS has been helping citizens with financial planning, spreading awareness about investors' rights and fighting for corporate transparency.
We have established a unique investor relations culture contrary to the West, although we are a watchdog for minority shareholders. We seek accountability from listed company boards in an acceptable way and also give corporate governance awards.
Our objective is to develop the capital markets in Singapore through our initiatives. An educated, well-informed and well-protected investing community is a boon to any financial market.
What services does SIAS offer?
SIAS offers a plethora of services like holding corporate profile seminars, analysis of companies, research work, informing and educating investors across Singapore on how to manage their finance, how to increase savings or avoid debts.
Instructors at SIAS are strictly asked not to sell a product, however, they brief the investor about the credibility of the company he wants to invest in.
How does it operate?
We have a panel of experts that includes members from the brokerage community, fund managers and insurance experts. The experts move from place to place to meet retail investors. The investors could be professionals, housewives or even small entrepreneurs.
Though we represent small investors, world-class institutions like Standard & Poors', PricewaterhouseCoopers, Singapore Stock Exchange, the Business Times and the Straits Times among others have joined hands with SIAS to grade and award public listed companies for their best corporate governance practices. We also work with the Monetary Authority of Singapore (MAS) in our effort to educate people in financial planning.
What is your reading of the Indian markets and investors?
Indians do have a sense of the market. However, the right investment culture needs to be created.
An investor in India must do a careful analysis of the market, especially at this moment when huge funds are flowing in, thereby making the market highly volatile.
Also, I think Indian companies should play a vital role in educating their shareholders.
How does SIAS help companies in selecting independent directors?
We consider independent directors a vital aspect of corporate governance. So the company that has one-third, which is the minimum requirement according to the prescribed norms, or even more independent directors scores more.
As for our participation in this regard, we provide companies with independent directors if they are unable to find one. Companies often complain that there is a dearth of independent directors.
However, we believe there is ample supply. Lawyers, doctors, scientists all are willing to be independent directors provided the company is credible.
