Three days ago, Dr Chee raised the issue of huge investment losses by Temasek and GIC. DPM Tharman subsequently claimed that Chee “ignored altogether the profitable investments the two organisations had made”. Tharman should not have expected Singaporeans to accept his statement as the gospel truth.
Question: What are the highly profitable investments which could have offset all the huge losses?
Huge losses are not easy to recoup. Even novice traders know that the stock market climbs a wall of worry but collapses in the blink of an eye (chart below). Temasek’s record shows it panicked after global markets have collapsed and divested many investments near market lows which means they were almost wiped out. Mind you, we are not talking about ‘kacang putih’ amounts.
One of the investments mentioned by Dr Chee was Barclays Plc (chart below). Temasek invested more than 1 billion pounds (S$3.1 billion) in July 2007 and lost about 80% or almost S$2.5 billion in 18 months. Taking into account a 30% exchange rate loss, Temasek lost a total of S$2.7 billion in 18 months on a single investment.
Dr Chee has rightly described PAP’s “shocking lack of judgement” in how it prioritises its spending, ie multi-billion dollar investment losses acceptable but not when it comes to investing smaller amounts in citizens’ healthcare, etc.
(Before investing in Barclays, Executive Director Simon Israel said: “Barclays is a very well-managed bank. We are very impressed with its board and management, specifically their strategy, track record and focus on value creation for shareholders.” Similar to PAP’s track record before Goh became PM, Barclays’ track record tells us only about its past, not the future. Eight years later, there has been only value destruction for Barclays’ shareholders.)
PAP has resisted every call for GIC and Temasek to be upfront with citizens despite managing more than half a trillion of our reserves and CPF. To regain citizens’ trust, Temasek and GIC have to “open up its books”.
It would have been fine if Singapore were a poor nation but that is clearly not the case. It appears PAP is sacrificing Singaporeans’ well being and using our money for speculation. When investments are profitable, PAP trumpets to the world but when there are gargantuan losses, it is not held accountable. Heads PAP wins, tails citizens lose.
GIC’s books must be opened because there is a high possibility of too many bad investments. One example which I will update here is Serco Plc (chart below). GIC is currently sitting on paper losses of about S$170 million, more than 50% including subscription to rights issue, after only 14 months.
If there are really many profitable investments to offsets losing ones, PAP should disclose them or they it will lose more credibility. By the way, is there any game plan for bad investments or will GIC perpetually throw our reserves at more rights issues and simply pray for the best?
After having scrutinised GIC’s listed portfolio, the conculsion is GIC is not what the PAP makes it out to be. This is also the reason why PAP needs to continue hiding information from the public.
PAP could have shut everyone up by disclosing information which should have been in the public domain but why wouldn’t it? Why does PAP allow the reputation of CPF Board, Temasek Holdings and GIC to be tarnished? Why is our servant and ‘jaga’ Lee Hsien Loong’s reputation more important? PAP should disclose all relevant information and not use legal threats to shut citizens up anymore.
Just how ‘upside-down’ are PAP’s priorities? In December 2007, GIC speculated on UBS with S$14 billion of our reserves. To put this into perspective, a S$1 billion overseas investment was extremely rare. A single S$14 billion investment must have been approved by our ministers who sat on GIC’s Board, contrary to PAP’s insistence that it is not involved in the investment decision-making process.
The expansion of public hospitals was neglected not because Singapore did not have the funds but billions of our reserves were used for speculation. Selling HDB at lower prices was not impossible but PAP wanted to make profits by including high land cost and subsequently channeling them into GIC to speculate. PAP’s priority is only to make more money.
Singapore is not a poor country and additional spending of a few billion dollars on citizens’ well being will not lead to our collapse, a scenario often portrayed by PAP. PAP should not continue to assume Singaporeans are stupid.
To hold PAP to account, we would need opposition party members like Chee Soon Juan, Kenneth J, Tan Jee Say, Lim Tean, Roy Ngerng, etc to highlight and demand answers to Temasek- and GIC-related issues in Parliament.
Citizens deserve nothing less than upfront answers.
PAP has 100% control of Temasek Holdings and GIC, ie our reserves and CPF monies, but it has got its priorities all wrong. It has sacrificed the well being of Singaporeans and prostituted itself for more money.
By disclosing Temasek- and GIC-related information which should be in the public domain, Singaporeans will be able to force PAP to cease speculating and channel billions of our reserves to improve our well being.