IT’S not just the hot weather or the rain or the sheer drudgery of the job that make motorcycle taxi drivers occasionally grumpy. As is pointed out in our story this month on Bangkok’s two-wheel taxis, the drivers have to ‘buy’ their jobs in the form of a vest that distinguishes them from other motorcyclists and allows them to pick up passengers. The fee they have to pay for that all-important piece of clothing can be as much as 140,000 (and sometimes even more) for the privilege of driving up and down a few streets, day and night, in return for 10-20 baht a ride. That’s one heck of an expensive vest.
THE catastrophic collapse of LM Investment Management (LMIM) in Australia continues to send shockwaves through Thailand’s expatriate community, some of whom have lost their life’s savings in the scheme and now face a future of monumental uncertainty. Months after being told their investments were to all intents and purposes worthless, many are still reeling from the shock, unsure whether to blame LM for the failure, the
independent financial advisers who sold them the fund or the regulators back in Australia for their negligence in safeguarding investors’ money. Or themselves for being overly trusting.
Certainly LM and its head honcho Peter Drake must shoulder much of the responsibility for the collapse of the fund – poor management, unrealistic returns on investment forecast and some questionable loans to its senior personnel. One must also raise the possibility that it increased its commissions in the latter stages of an inevitable collapse in a last-minute attempt to rescue the company. This is speculation only, but the high returns it paid for a while had echoes of a classic ponzi scheme.
The role of the IFAs is extremely contentious as well. Some investors are amazingly charitable, saying they were only doing their job, selling what they believed was a sound investment;others, however, are far less understanding, insisting that no diligence was carried out, the IFAs were interested only in their commissions and none raised a warning flag when LM’s problems began to emerge. To illustrate their ineptitude, or shameless greed, some of these advisers were offering LM funds just days before going into administration. They in turn are pointing fingers at the Australian regulatory system, which they claim has not only failed in its responsibilities but also done irreparable damage to the country’s image as a safe haven for investors.
Can the investors themselves take any blame? Of course not. Many of LM’s victims were conservative, a little naive and wholly reliant on IFAs for financial advice. The fall-out from this fiasco is huge and industry-changing. It’s also desperately sad, with scores of people left shocked, penniless and with virtually no means to recover. As for the IFAs, there’s already evidence that a shake-out has begun, with some of these so-called financial advisers fleeing the scene to escape potential legal battles, their pockets full and with every intention of repeating their dubious business practices elsewhere.