Of the 2,288 eligible clients entitled to claim against this scheme, 2,286 will be paid in full. The remaining two clients who have more than RM2 million outstanding from Omega Securities will be paid more than 85 per cent of the amount due to them.
The RM70 million pay out under the Reimbursement Scheme is double the estimated RM35 million that would have been paid to these clients under the rules of the Compensation Fund. The Compensation Fund limits legitimate claims to RM100,000 per claim.
The 100 per cent reimbursement to almost all but two eligible clients of Omega Securities has achieved the main objectives of the Reimbursement Scheme that was structured by the SC.
The Reimbursement Scheme has mitigated clients' losses resulting from mismanagement and violations of securities laws by Omega Securities. The SC revoked the dealer's license of the stockbroking company on 5 June 1998.
Virtually all of the eligible clients of Omega Securities will have been fully reimbursed under the Reimbursement Scheme. The scheme operates separately from the Compensation Fund that would have been unable to compensate all clients to the same extent.
The SC Chairman Dato' Dr Mohd Munir Abdul Majid had said earlier that the reimbursement scheme was also introduced to ensure that the Compensation Fund was not depleted. Both the SC and KLSE had agreed to boost the Compensation Fund to RM314 million in April. The Reimbursement Scheme has prevented an estimated depletion of RM35m from the Compensation Fund.
Omega Securities' clients eligible for the Reimbursement Scheme are
- Margin clients with no outstanding balances in their margin accounts but with shares and/or other forms of security held by Omega Securities
- Margin clients with net credit (after netting-off shares and/or other forms of security in their margin account against amount owing to them to Omega
- Non margin clients with net credit
Hwang DBS has confirmed that it has sent out letters to Omega Securities' clients on 15 June. As announced earlier, these eligible clients have to make their claims through Hwang DBS on or before 30 June and payments will be made at KLSE's office between 13 July 1998 and 17 July 1998.
However,
Omega Securities non-margin clients with RM10 and below due to them will not be receiving letters. Instead, these clients should present themselves at the office of Omega Securities on or before 30 June 1998 with their original identity card or passport together with, if possible, the statement of account last sent to them. Kuala Lumpur Stock Exchange ("KLSE") staff will make
immediate cash payment to these clients if all verifications can be made upon the client presenting himself/herself.
The reimbursement scheme involves a willing stockbroking company deemed fit by the SC undertaking to reimburse clients of a stockbroking company whose licence has been revoked.
