Media Statement on Internal Investigation into Safe Deposit Box
Incident and Progress with Customers
Hong Kong, October 29, 2004 – A DBS Bank (Hong Kong)'s internal
investigation into the incorrect removal and destruction of 83 customer
safe deposit boxes at its Mei Foo branch found that a combination
of human error, inadequate project oversight and the lack of formalised
procedures for safe deposit box removal, contributed to the extremely
The investigation uncovered no evidence of fraud or foul play.
DBS has also settled in full claims from 51 affected customers.
An internal investigation team has submitted its findings to local
regulators, along with recommendations for follow-up action.
Randolph Sullivan, Chief Executive Officer (CEO) of DBS Bank (Hong
Kong), said: "The investigation showed that both our external
service providers and our own staff made mistakes which let our
customers down. It identified gaps in our internal policies and
procedures, which will now be corrected promptly. We are determined
to ensure that such an incident does not happen again.
"We want to stress again that no matter what lapses there were
on the part of external parties, we at DBS hold ourselves responsible
to our customers."
Key findings of the investigation
In particular, the investigation team noted that:
- Kumahira Hong Kong Ltd (Kumahira) failed to ensure clear, unambiguous
instructions were given, resulting in contracted workmen incorrectly
removing two blocks of in-use safe deposit boxes. This was the
- supervision by Jones Lang LaSalle (JLL), the project manager,
and Kumahira of the workers removing the boxes was lacking.
- DBS Mei Foo branch staff failed to impose appropriate procedures
to check that only empty safe deposit boxes were removed.
- relevant parties failed to appreciate the operational risks
involved in renovation of vaults containing in-use safe deposit
Sequence of events
The events that led to the destruction of the safe deposit boxes
took place on Saturday, October 2. Workmen for Kumahira arrived
at the branch just after it closed at 1 pm.
Kumahira is an established manufacturer and provider of safe deposit
boxes with a dominant share of the market in Hong Kong and a previous
contractor of the Bank. The reappointment of the firm was recommended
by JLL, the project manager for the Mei Foo branch renovation and
the exclusive facilities manager for DBS in the region.
Eleven DBS Mei Foo branch staff were present when the branch opened
for business in the morning of Oct 2. Throughout the removal of
the safe deposit boxes, at least two branch employees were present.
However, they were carrying out their normal day-end duties and
assumed the external contracted parties had the staff and expertise
needed to oversee the removal process. No supervisor from Kumahira
or staff from JLL were present.
In the event, the workmen removed a total of ten blocks of safe
deposit boxes, instead of the eight identified in an Installation
Plan drawn up earlier by Kumahira. Two of the blocks removed contained
the 83 safe deposit boxes with customers’ contents.
The removal works were completed at around 6.30 pm and the safe
deposit boxes were immediately transported to a scrapyard.
The mistake was discovered mid-Sunday morning, October 3, when
another team of workmen returned to the branch to install bigger
safe deposit boxes. Upon being informed of the mistake, the Kumahira
workmen, JLL and the Mei Foo branch staff went to the scrapyard
where they ascertained the safe deposit boxes were already compressed.
During the remainder of Sunday and into the night, DBS personnel
worked to secure the boxes, recover whatever contents were salvageable,
identify customers affected and escalate the incident to senior
The following day, Monday, October 4, various stakeholders including
affected customers, DBS' regulators in Hong Kong and Singapore,
most members of DBS boards in Singapore and Hong Kong, and other
senior management staff were informed.
DBS Bank (Hong Kong) also held two media conferences on Tuesday,
October 5, and Wednesday, October 6. Bank executives revealed what
happened, accepted responsibility, and presented a compensation
package for prompt settlement of customer claims. The investigation
team was set up on Wednesday, October 6.
Conclusions of investigation team
The investigation team concluded that:
- Kumahira failed to provide its contracted workers with a copy
of the Installation Plan and adequate written instructions. It
also did not ensure that verbal instructions were clearly understood.
- JLL, as project manager, was responsible for managing and enquiring
about the process by which Kumahira would ensure that the correct
safe deposit boxes were removed, and to be satisfied that the
procedures were robust and properly documented.
- DBS Mei Foo branch staff relaxed direct oversight, instead relying
on external professionals – JLL as a specialist project management
and facilities management firm, and Kumahira as a specialist safe
deposit renovation firm. As a minimum, branch management and staff
should have reviewed the removal works in the vault prior to leaving
- All parties failed to properly assess the renovation project
as a high risk event involving customer assets. Instead, they
viewed the renovation to be a straightforward, industrial works
project involving heavy removal equipment and specialist external
- While DBS Bank (Hong Kong) has operational procedures for routine
branch operations including the rental of safe deposit boxes,
it did not have formalised procedures for removal of safe deposit
boxes which was a non-routine event.
The investigation team also concluded that this was an incident
isolated to the Mei Foo branch renovation and no other DBS Bank
(Hong Kong) branches and their customers were affected by the incident.
The investigation team recommended a series of remedial actions
to be taken by DBS Bank (Hong Kong). These are primarily aimed at
tightening policies and procedures for capital works management,
establishing written guidelines for the removal/disposal of safe
deposit boxes and enhancing physical security awareness.
The Bank has since formed a task force to review the guidelines,
procedures and manuals related to renovation work at all its branches,
particularly those with safe deposit boxes. It is also reviewing
the terms and conditions for its safe deposit rental agreement.
Mr Sullivan said: "Since the incident, we have acted with
professionalism, speed and compassion to contact and offer support,
assistance and compensation to all affected customers. To date,
51 customers have reached a settlement over their losses, and we
believe they acknowledge that they have been treated with fairness
and compassion. We are working with the remaining customers to honour
"We hope that our affected customers, our employees, and others
in the community have taken note of our commitment to live up to
DBS Bank (Hong Kong) assigned dedicated case handling officers to
address the many issues faced by the affected customers, and to
listen to their concerns. A claims support unit and a claims committee
were also formed. Arrangements for viewing and return of content
of recovered boxes were urgently made, starting the weekend of October
9 and October 10. An expert jewellery company and a claims assessor
were appointed to help and guide customers with the claim process.
An external law firm was also retained to help with free replacement
of lost/damaged documents.
DBS Bank (Hong Kong) Head of Consumer Banking, Sunny Cheung, commented:
“Our staff have shown dedication to our customers and have worked
evenings and weekends, day after day, to do all we can to address
the specific concerns of each of the affected customers.
“I have seen repeatedly how this has been a particularly difficult
time for these customers, as their losses are deeply personal. Their
treasured items from their youth, their families and the past and
those which mark their aspirations and achievements cannot be replaced.
I have been deeply moved each time I have sat with affected customers
and learnt first hand, details of the very personal losses they
"We have learned from our mistakes and we are determined to
live up to the trust that our customers have placed in us as a bank."
Headquartered in Singapore, DBS is one of the largest financial
services groups in Asia. The largest bank in Singapore and the fifth
largest banking group in Hong Kong as measured by assets, DBS has
dominant positions in consumer banking, treasury and markets, asset
management, securities brokerage, equity and debt fund raising.
Beyond the anchor markets of Singapore and Hong Kong, DBS serves
corporate, institutional and retail customers through its operations
in Thailand, Malaysia, Indonesia, India and The Philippines. In
China, the bank has branches and representative offices in Shanghai,
Beijing, Guangzhou, Shenzhen, Fuzhou and Tianjin. The Bank's credit
ratings are among the highest in the Asia-Pacific region. More information
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