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* Traders say no clear reason for their dismissal
* UBS says investigations into rates still ongoing
* Trader said he raised concerns over NDFs prior toinvestigation
By Rachel Armstrong
SINGAPORE, Feb 28 (Reuters) - Two former UBS AG traders inSingapore are suing the bank for wrongful dismissal, saying thebank fired them to lessen its role in the alleged manipulationof reference rates used to price currency derivatives known asnon-deliverable forwards.
In separate lawsuits filed at Singapore's High Court onWednesday, Mukesh Kumar Chhaganlal and Prashan Parmeshwar SunnyMiripuri said UBS never gave them full details of whatthey were alleged to have done wrong. UBS declined to comment.
UBS was fined $1.5 billion in December last year for itsrole in a multi-year scheme to manipulate the London interbankoffered rate (Libor) and other benchmark interest rates.
"It appears to the plaintiff that his summary terminationwas effected in order to mitigate the defendant's (UBS) role inthe growing scandal related to alleged fixing of reference ratesin the Singapore market," papers in Kumar's case say.
Kumar, who was the former co-head of Macro Trading, EmergingMarkets Asia, and Miripuri, who ran UBS's South East Asian Deskfor NDF trading, were both fired on Feb. 7 having been suspendedsince last year.
Both men said in the papers that UBS never gave them fulldetails of why they were being suspended and subsequently fired.
According to the court documents, the two former UBS traderswere given letters by the bank on Feb. 7 that said they werebeing terminated "on the ground of gross misconduct" with nofurther explanation.
"They were not presented with any evidence showing theyfixed rates," said Daniel Chia, a director at Stamford LawCorp., which is representing the traders. "UBS cannot pinpointwhat they did wrong."
A spokeswoman for UBS in Singapore said the bank isdeclining to comment on the case as the investigations into thealleged manipulation of reference rates are still ongoing. Sheadded that the bank is co-operating fully with the authorities.
Kumar did not comment beyond what he said in the courtdocuments when Reuters spoke to him via telephone.
Miripuri could not be immediately reached for comment.
Kumar is seeking damages including shares which would havebeen due to him under the bank's equity ownership plan worthS$2.41 million ($1.95 million) at the time he was dismissed, aswell as three months of salary in lieu of notice totallingS$150,000, according to the court papers.
Miripuri is claiming three months of salary, the balance ofhis performance incentive for 2012 that he said he was promisedwhen he joined UBS at the start of that year which comes toS$484,966, and shares worth more than S$700,000 at the time ofhis dismissal, the documents he filed to the court show.
RATE FIXING
The Monetary Authority of Singapore (MAS) ordered banks thathelp set local interbank lending rates and NDF rates to reviewthe fixing process last year as U.S. and British regulatorscracked down on manipulation of Libor, a benchmark used to setinterest rates for around $600 trillion worth of securities.
Kumar said in his suit that he voiced concerns about theregulation of reference rate setting in Singapore to his UBSmanager Bala Venkatesan, the MAS, and the Association of Banksin Singapore (ABS) before the bank reviews began.
"The plaintiff felt there were insufficient checks andbalances concerning the setting of reference rates by variousinternational banks operating in Singapore," his papers say.
During 2012, Kumar saw increasingly unrealistic rates forthe Indonesian rupiah against the dollar being set in the marketand brought this to Venkatesan's attention "as evidence of thelack of regulation in the NDF market," the papers say.
He said Venkatesan responded there was no way to "controlthe market or how people set the rates on the market."
Vankatesan, who was head of Fixed Income, Commodities andCurrencies for UBS in Asia but has since left the bank, declinedto comment when contacted by Reuters.
An MAS spokesman told Reuters that it is not able to commenton ongoing legal proceedings, while ABS did not respond torequests for comment from Reuters.
NDFs are derivatives that let companies and investors hedgeor speculate on emerging market currencies when exchangecontrols make it difficult for foreigners to participatedirectly in the spot market.
Spot reference rates submitted by lenders in Singapore toABS are used to determine the settlement prices of NDF contractsin the Indonesian rupiah, Malaysian ringgit and Vietnamese dong.
Thomson Reuters, parent company of Reuters News, calculatesand distributes the spot reference rates for the rupiah, ringgitand dong NDF markets on behalf of the ABS, as well as otherinterbank 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.
