Stock prices, shadow prices and Tan Kin Lian
After reading Tan Kin Lian leading a protest at Speaker's Corner on the minibonds issue, which I have covered before here, this news report answers some of my own questions.  Some notable quotes

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But if you no longer have that money, who does? The fat cats on Wall Street? Some oil baron in Saudi Arabia? The government of China?

Or is it just — gone?

If you're looking to track down your missing money — figure out who has it now, maybe ask to have it back — you might be disappointed to learn that is was never really money in the first place.

Robert Shiller, an economist at Yale, puts it bluntly: The notion that you lose a pile of money whenever the stock market tanks is a "fallacy." He says the price of a stock has never been the same thing as money — it's simply the "best guess" of what the stock is worth.

"It's in people's minds," Shiller explains. "We're just recording a measure of what people think the stock market is worth. What the people who are willing to trade today — who are very, very few people — are actually trading at. So we're just extrapolating that and thinking, well, maybe that's what everyone thinks it's worth."

Shiller uses the example of an appraiser who values a house at $350,000, a week after saying it was worth $400,000.

"In a sense, $50,000 just disappeared when he said that," he said. "But it's all in the mind."

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Economists has coined this term "shadow prices", indicating the true value of the stock.  Paul Samuelson was probably one of the pioneers of this concept with his interestingly titled article "Proof That Properly Anticipated Prices Fluctuate Randomly".

So combining Shiller and the concept of shadow prices, the simple answer for Tan Kin Lian is this, no one can compensate you because the missing money is not in anyone's pocket to be taken and returned to you.  Through this stock market correction, we are realizing that actual prices far exceeded the shadow prices.  When we use our money to buy these minibonds, the reason they can give us a 5% return is because they are investing your money in the stock market in the hope that, in the future, someone will value that stock at a higher price than what we have paid for it initially, the difference becomes our profit.