By IGNATIUS LOW

AFTER 1-1/2 years of political wrangling, the Clob issue seems to have been laid to rest finally. Last Friday, the Singapore and Kuala Lumpur bourses came out with a joint statement that they had concluded two separate agreements which bound them to seeing through the terms of a final solution.

Clob investors, whose shares have been frozen since September 1998, now have two options. They either pay a 1.5-per cent fee to Malaysian private-sector firm Effective Capital and have their shares released over the next 16 months, or they pay a 1-per cent fee to KLSE's clearing house Scans, but have their shares frozen for a much longer period -- between 33 and 42 months.

One would have thought that Clob investors would be relieved that the issue has been resolved.

Instead, the Forum pages of The Straits Times have been ablaze with angry letters from, presumably, shareholders. The writers, describing the final resolution as a "disappointment" and a "letdown", claim that they are trapped between the devil and the deep blue sea. They say they cannot really avoid paying a higher fee to Effective Capital because the other option entails a waiting period that is far too long.

The third approach of taking the case to the Malaysian courts is arduous and offers no guarantee of success.

Therefore, it seems to the letter writers, that for all the talk about having the moral high ground and taking legal action against the KLSE, SGX seems to have "sold out" on its principles. It conceded defeat and, worse still, allowed the "adversary" to make off with a handsome profit.

For sure, it was an outcome which must have rankled Clob investors. But in a situation where one's opponent does not abide by internationally-established rules of contract law, much less good, old-fashioned gentlemen's agreement, the final solution, flawed as it may look, made a lot of sense.

I say that not because I approve of the way events have unfolded. On the contrary, the entire affair contained more seedy elements than a trashy soap opera.

Legally-binding promises have been broken and other responsibilities denied. Prominent private-sector companies have fallen over one another to propose schemes designed to extract money from Clob investors.

But the final solution makes sense because SGX had to somehow put a stop to the circus continuing to play itself out across the Causeway. Indeed, some "realpolitik" was unavoidable, despite being on the right side of the law. After all, history is replete with instances in which a strong moral and legal position has not won out in a court of law.

SILENCING ALLEGATIONSTHE same approach had to be applied constantly by SGX -- whose job was to walk a tightrope between principle and being practical.

During the past 18 months, it has had to silence allegations that Clob was an illegal market, produce evidence to refute the claim that trading on Clob caused the plunge of the KL Composite Index and show that there is no reason for the shares to be confiscated by the Malaysian Ministry of Finance.

At the same time, it also had to fend off exploitative offers from private-sector companies lining up to buy the shares from Clob investors at unreasonable discounts.

It was truly a rough ride. And credit must go to SGX. We have come far from the days of harsh rhetoric by Malaysian politicians and the first private-sector "offers" which came at cut-throat price discounts of as much as 80 per cent!

In the end, while it is hard to disagree that the Clob resolution was imperfect, it would be equally difficult to argue with any conviction that good judgment did not prevail.

After all, 16 months and RM300 million (S$136 million) later, when those accepting Effective Capital's scheme would have had their shares transferred fully, most Clob investors would have put all this behind them.

Malaysia, on the other hand, will still be a sad reminder internationally of just how far principles of fair play and justice can be stretched.