Taxpayers and CPF members at higher risk with former president/failed GIC dy chairman appointed to newly-created GIC post

I refer to “Dr Tony Tan appointed director and special advisor of GIC“. CNA

There seems to be such an acute lack of talents that the PAP has to employ the former president and GIC executive director to a newly-created position in GIC next year.

GIC CEO and former Malaysian Lim Chow Kiat Tony’s “special advisor” role:
tony tanBut why why would GIC – which already has the most powerful political figures on its board – still require further assistance from a 77 year-old former president? I hope the board of directors are not jiak liow bee. 🙂

GIC board includes the following directors:
– PM Lee
– 2 DPMs
– 2 ministers with extensive experience
– 1 former minister (clue: reportedly slapped by someone)

Tony’s competence is also highly questionable: GIC made the biggest investment boo boo in its history when he was dy chairman and executive director.

Investment losses are par for the course but to bet $25 billion in reserves and CPF monies on UBS and Citigroup – at the height of the global financial crisis – was clearly reckless.

(It is widely believed that GIC was trying to recoup earlier massive losses but had instead dug a deeper grave. Subsequently, a series of unplanned CPF tweaks were implemented to entice members to top up CPF accounts. On the government’s end, legislations with a similar objective – channel funds to GIC – were enacted, eg GIC received $8 billion from the Pioneer Generation Package, etc.)

With regard to UBS and Citigroup investments, Tony gave these reasons for betting $25 billion during this interview in 2008:
– “We have been following the banks for many years. We know the banks manage money very well”.
– “So we are confident that these two banks will overcome their difficulties”.

From the chart below, it appears that Tony was only talking cock and really knew nothing about UBS after “following the banks for many years”.
Tony: “We always look at risk first, how much money can we lose, what is the downside“.

Did Tony even know the Citigroup investment could have gone bust?  According to a 2008 report by the Special Inspector General for the Troubled Asset Relief Program: “We were on the verge of having to close this institution because it can’t meet its liquidity Monday morning.”

Was GIC prepared to lose US$6.88 billion in reserves and CPF monies?

Citigroup was a lousy investment and this is reflected in its current share price.
GIC did not expect Citigroup’s problems to be so severe as to require the US government to prevent its bankruptcy with US$476 billion in cash and guarantees.

That GIC was fortunate to profit from Citi has nothing to do with good judgement but pure luck.

Seriously, a person like Tony who condoned recklessness and depended on luck in managing our reserves and CPF monies will have nothing to contribute to GIC.

Is PAP preparing to take higher investment risk – again – with Tony’s GIC appointment? Will there be a repeat of UBS/Citigroup?

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3 Responses to Taxpayers and CPF members at higher risk with former president/failed GIC dy chairman appointed to newly-created GIC post

  1. Anonymous incognito4 says:

    You misunderstand. It’s not a lack of talent but a circling of the wagons so that no outsiders can ask pointed questions.
    I really don’t see much investment opportunities abroad and since the real private sector is so miniscule there’s nothing to invest in

  2. Confused says:

    The above post summed up the frustration.

    The trouble is that are too much cheap fund from CPF (almost $20 billions annually), land sales which they have no choice but to “gamble away” as there isn’t much investment opportunities around.

    Win they will take all the credits and fatten their pockets and if lose, it’s not a big issue to them as no head will roll as long as nobody (the people) knows about it?

    It may well be time for them to stop channeling more fund into GIC if the net return has been negative in the recent years. why should they be given more monies in the reserve if they are not competent to generate good return to subsidy our annual budget if rumoured that we have at least S$750 billions in our National Reserve, is true?

    Our annual budget has been in the region of $52 to 55 billion (with net budget surplus all these years) in the recent years except for this year which is much higher. A decent 6% return on the $750 billion would have easily generated a good return in the magnitude of $45 billions every year and in fact less tax should be collected to benefit the people. So where is our monies?????

    The whole of GIC & Temasek should be trimmed and get real Lean to become sustainable to begin with. We could be losing just billions for all GIC’s & Temasek’s fat staffs’ pay? Anyone knows?

    The PAP government must Stop asking for more tax before all these are done.

    No company will continue to pay high salary to their directors or top executives who are not performing. If they keep coming back to ask shareholders for more monies without keeping themselves lean for failing to perform, the top guns will be booted out.

    Even if the shareholders agree to inject more fund, it must be with the view and understanding that the new injection is used to generate more real return or to turn around the company, for the shareholders. The shareholders would stand to have real overall gain despite the injection eventually.

    Why should we continue to pay more tax without enjoying the real benefits (Not token in the form of Utility grant which are peanut compared to the millions pay) at the end of the day while the ministers continue to draw their obscenely high pay?

    We, the citizens of Singapore, is akin to shareholders of any company, must be the real winners and it should not be the other way round. What do you think?

  3. Anonymous incognito4 says:

    Agreed. Temask and GIC need to be radically cut so the peivate sector can take over the gaps left behind by the exit of those 2 companies. We also need massive refunds real cash returned to us.
    But it won’t happen because the aristocrats really believevthey super smart

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