* Traders say no clear reason for their dismissal
* UBS says investigations into rates still ongoing
* Trader said he raised concerns over NDFs prior to
By Rachel Armstrong
SINGAPORE, Feb 28 Two former UBS AG traders in
Singapore are suing the bank for wrongful dismissal, saying the
bank fired them to lessen its role in the alleged manipulation
of reference rates used to price currency derivatives known as
In separate lawsuits filed at Singapore's High Court on
Wednesday, Mukesh Kumar Chhaganlal and Prashan Parmeshwar Sunny
Miripuri said UBS never gave them full details of what
they were alleged to have done wrong. UBS declined to comment.
UBS was fined $1.5 billion in December last year for its
role in a multi-year scheme to manipulate the London interbank
offered rate (Libor) and other benchmark interest rates.
"It appears to the plaintiff that his summary termination
was effected in order to mitigate the defendant's (UBS) role in
the growing scandal related to alleged fixing of reference rates
in the Singapore market," papers in Kumar's case say.
Kumar, who was the former co-head of Macro Trading, Emerging
Markets Asia, and Miripuri, who ran UBS's South East Asian Desk
for NDF trading, were both fired on Feb. 7 having been suspended
since last year.
Both men said in the papers that UBS never gave them full
details of why they were being suspended and subsequently fired.
According to the court documents, the two former UBS traders
were given letters by the bank on Feb. 7 that said they were
being terminated "on the ground of gross misconduct" with no
"They were not presented with any evidence showing they
fixed rates," said Daniel Chia, a director at Stamford Law
Corp., which is representing the traders. "UBS cannot pinpoint
what they did wrong."
A spokeswoman for UBS in Singapore said the bank is
declining to comment on the case as the investigations into the
alleged manipulation of reference rates are still ongoing. She
added that the bank is co-operating fully with the authorities.
Kumar did not comment beyond what he said in the court
documents when Reuters spoke to him via telephone.
Miripuri could not be immediately reached for comment.
Kumar is seeking damages including shares which would have
been due to him under the bank's equity ownership plan worth
S$2.41 million ($1.95 million) at the time he was dismissed, as
well as three months of salary in lieu of notice totalling
S$150,000, according to the court papers.
Miripuri is claiming three months of salary, the balance of
his performance incentive for 2012 that he said he was promised
when he joined UBS at the start of that year which comes to
S$484,966, and shares worth more than S$700,000 at the time of
his dismissal, the documents he filed to the court show.
The Monetary Authority of Singapore (MAS) ordered banks that
help set local interbank lending rates and NDF rates to review
the fixing process last year as U.S. and British regulators
cracked down on manipulation of Libor, a benchmark used to set
interest rates for around $600 trillion worth of securities.
Kumar said in his suit that he voiced concerns about the
regulation of reference rate setting in Singapore to his UBS
manager Bala Venkatesan, the MAS, and the Association of Banks
in Singapore (ABS) before the bank reviews began.
"The plaintiff felt there were insufficient checks and
balances concerning the setting of reference rates by various
international banks operating in Singapore," his papers say.
During 2012, Kumar saw increasingly unrealistic rates for
the Indonesian rupiah against the dollar being set in the market
and brought this to Venkatesan's attention "as evidence of the
lack of regulation in the NDF market," the papers say.
He said Venkatesan responded there was no way to "control
the market or how people set the rates on the market."
Vankatesan, who was head of Fixed Income, Commodities and
Currencies for UBS in Asia but has since left the bank, declined
to comment when contacted by Reuters.
An MAS spokesman told Reuters that it is not able to comment
on ongoing legal proceedings, while ABS did not respond to
requests for comment from Reuters.
NDFs are derivatives that let companies and investors hedge
or speculate on emerging market currencies when exchange
controls make it difficult for foreigners to participate
directly in the spot market.
Spot reference rates submitted by lenders in Singapore to
ABS are used to determine the settlement prices of NDF contracts
in the Indonesian rupiah, Malaysian ringgit and Vietnamese dong.
Thomson Reuters, parent company of Reuters News, calculates
and distributes the spot reference rates for the rupiah, ringgit
and dong NDF markets on behalf of the ABS, as well as other
interbank lending and currency rates.
The biggest banks in the Asian NDF markets include UBS,
JPMorgan Chase & Co, DBS Group Holdings Ltd
and HSBC Holdings Plc.