How Singapore’s currency club fell apart
SINGAPORE — Mr Mukesh Kumar Chhaganlal said he tried to warn his manager at UBS AG about the “increasingly unrealistic” currency rates being set last year for the Indonesian rupiah against the dollar.
His manager told him nothing could be done because “there was no way to control the market or how people set the rates on the market”, according to court documents Mr Mukesh filed in Singapore recently in his wrongful termination suit.
Months after this alleged conversation, UBS fired Mr Mukesh. He says in court papers he has not been given the reasons for his sacking, and that he was not a party to the fixing of any reference rates in the market. Six of his colleagues on the UBS trading desk also left the firm.
The staff departures came after regulator Monetary Authority of Singapore (MAS) ordered banks to review how they set currency and interest rates following scandals in London and the United States.
Mr Mukesh’s battle with the Swiss bank is part of a broader story about how a clubby, foreign exchange trading community was torn apart in a rate-fixing manipulation probe in South-east Asia’s financial hub.
It also exposed weaknesses in the way central banks in the region manage their currencies — particularly in Indonesia. Bank Indonesia, the central bank, told Reuters it has been holding discussions with currency traders about how to strengthen its rate-setting mechanism.
UBS has declined to make any statement on the lawsuit by Mr Mukesh, which it is defending, or the departure of its traders, saying it does not comment on legal cases or staff matters.
It said it is “co-operating fully” with Singapore’s reviews on how banks fix interbank lending and currency rates.
BORN IN FINANCIAL CRISIS