SINGAPORE May 28 The 6,000 customers of MF
Global Holdings Ltd's Singapore arm should get well over 90
percent of their money back from the collapsed brokerage,
although its creditors may have a tougher time recovering all
they are due.
MF Global filed for bankruptcy in the United
States on Oct 31, 2011 after a $6.3 billion bet on European
sovereign debt spooked counterparties and investors.
Liquidators in Singapore have managed to recover $483.9
million of funds owed to the customers and company, but are
still trying to claw back money that is tied up with other MF
Global units overseas or frozen in foreign bank accounts.
"This is one of the biggest and most complex bankruptcies in
Singapore because of the number of customers involved and the
multi-jurisdictional nature of the business," said liquidator
Bob Yap, a partner at KPMG, following a creditors' meeting in
MF Global Singapore has already returned the highest
proportion of customer money out of any of MF Global unit
worldwide, but still needs to collect more than $50 million in
outstanding funds. Getting hold of that, and money owed to the
creditors, hinges on reaching agreements with its international
affiliates and dealing with overseas regulators.
At the creditors' meeting, the liquidators said that if they
succeed in getting outstanding money repatriated to Singapore,
then customers should receive up to 97 percent of their money
and the firm's creditors up to 91 percent.
However, if those funds are not returned, then creditors
could only get 61 percent, although customers should receive
around 93 percent.
"We are pleased that we've recovered much of what can be
recovered and customers are getting most of their money back,"
Recovering value for the creditors could take several years.
One problem is the estimated $1.6 billion in missing
customer money at MF Global's U.S headquarters, which vanished
from their accounts as the company hurtled toward bankruptcy.
While the U.S. parent company only owes around $12 million
to clients or creditors of MF Global Singapore, it owes more to
other MF Global affiliates who in turn owe the brokerage's
Southeast Asian arm.
So the 165 former employees of MF in Singapore may struggle
to recoup all of the S$6.6 million ($5.16 million) they are
claiming in unpaid wages, bonuses and expenses. They have each
received a statutory payment of S$7,500 but will be treated as
unsecured creditors for their remaining claims.
The cost of the liquidators in Singapore, which will come
out of the funds recovered, has reached $15 million so far and
is estimated to reach $35 million for the three-year period in
which they are expected to be employed.