By Leong Sze Hian
I refer to the CNA news report “Prudent to protect sinking funds of town councils: DPM Wong” (CNA, Dec 2) and the article “Move to protect council funds” (Today, Dec 1).
According to Creative Technology’s (CT) annual report, Holland-Bukit Panjang Town Council (HBPTC) was listed as one of the majority shareholders with 530,000 shares currently valued at about $3.2 million. I understand that CT’s share price from 2003 to 2007, has ranged from a high of $27.30 to it’s current price of $6.10 on 12 October 2007.
According to CT’s Statistics of Shareholding as at 19 August 2005, HBPTC held 200,000 shares. The CT high price for fiscal 2005 and 2006 was $27.20 and $14.40 respectively. Does this mean that the 200,000 shares could have cost as much as $5.4 million?
When did HBPTC purchase its CT shares, and at what price?
If it had held its total holding of TC shares on 1 July 2006, I believe it would have been valued at about $6 million.
According to HBPTC’s annual report, it had $8.4 million of quoted equities on 1 April 2005.
If this is the case, does it mean that it accounted for about 70 per cent of HBPTC’s total quoted securities portfolio of $8.4 million?
If the above assumptions and timelines are correct, why is its quoted securities portfolio so apparently non-diversified?
Isn’t diversification the key principle of prudent investing?
What guidelines do town councils use in investing their residents’ funds?
Another question which needs to be asked is: What are the profits from such investments used for and have they ever been used, since town council funds keep growing to more than $1 billion now? Perhaps the town councils should include this in their annual reports and make them public.
When we last checked, only 6 out of the 16 town councils have their annual reports easily available on their websites. Why are the reports of the other 10 town councils not available on their websites?
Read also: “Uniquely Singapore, F1 or F9: “Residents willing to pay more for service and conservancy?”
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Related posts:
- $2 billion in PAP town councils’ sinking funds but need to increase charges?
- Town council investments: Annual reports do not answer questions
- Sinking funds: From $1 billion in 2007 to $2 billion in 2008
- Ang Mo Kio fire: Shouldn’t the Town Council do more?
- Town councils’ funds – Teo Ho Pin responds
Without any form of accountability or transparency, if they lose money in investments, they can just increase S&C charges and nobody would know.
$1,000,000.00 in funds. Goodness gracious holy macaroni!
And everyday singaporeans are struggling to survive. And all they can say to those struggling is: “Come and get our food vouchers!” – like Vivian Balakrishnan just did yesterday.
The government is losing – and losing it fast! Now, lets see if they really increase the ministers pay again.
Bloody PAP. I’m sick of them.
Til now I still don’t know town council used our fund for investment, what happen it loses money, who will suffer ?PAP or the HDB dwedllers? What kind of policy is this
I wonder if they really know how to manage their fund. It would have been reasonable to expect them to limit their risk exposure and not to hold too much in a single company stock. Would like to know the value of the 530,000 shares as a percentage of their total reserve held.
The Town Council should remember that it is not an investment company. While it may be necessary to invest some funds to earn a better return, it should take a responsible and conservative approach by allocating the bulk of its reserves in fixed income instruments like our Singapore government bonds.
People who lose money in investment are usually those who knows nothing about it and those who think they know everything about it.
Hope they have learned a good lesson from here.
I hope it’s not another attempt to restrict the use of opposition TCs’ funds. It’s good that the government is highlighting this potential problem while the stock market is still bullish.
In most (if not, all) of the current Town Councils’ Annual Reports that I have read, the item “Funds with fund manager” was used in the finanical statements. There was no mention of the names of the fund managers concerned.
For example, in the Tanjong Pagar Town Council Annual Report (Page 18-34), it is stated on Page 22 (Section 5: Sinking Funds) as follow:
Non-Current Assets
• Fund with fund manager = S$37,172,597
• Investments = S$73,307,489
(See page 25 for additional notes)
Now, who are the likely fund managers that the town councils will use?
There are always a mention of Financial Reporting Standards (FRS 39 & FRS 32, both revised 2004). This is especially to address the reclassifications of investments and sinking funds in the current annual reports. It seems that investments and sinking funds need to be reported in a different way.
So WTF are these town councils doing with so much surplus funds. I always thought that the priority of these town councils were to serve the common needs of each constituency and that the town council fees/charges were not meant to generate huge profits for the benefit of these town councils to invest in shares.
So basically the Gahmen cannot now deny that all these years these town councils were actually sucking the hard earned monies of all the constituents. No wonder during election times they can out with so many carrots to entice the voters in the opposition wards which implied that they were actually using the constituents’ own contributions to bribe the same voters.
Come to think of it, so the PAP Gahmen has actually been taking us for a ride all these while!
Er…so can i drop by my town council for FREE investment advice?
Town council so eager to slap $5 penalty for late payment…at least now i know that $ is invested to make more $..so in a way, i contributing to their sinking fund – juz hope it doesn’t really sink one day.
I think the key question is how qualified are those guys at the Town Councils in investment…
Maybe it’s time for the government to tighten the loophole that allows corporates and other non-profit entities to behave like mini treasury departments but without adequate risk management systems in place…
Town Councils investing??? Doesn’t sound right. I am not a blogger. However, I get most of my news analysis from blogs. I am really looking forward to the Bloggers meet and meeting up with people like Alex from Yawning Bread, Bad Boy Bambie from the bruderhud. Can someone pls tell me who was the bloggers that AIMS originally approached? I would also like to aks whether the bruderhood is a blog, I am very confused as I don’t they are even listed. That is very strange. Thx and c u all there tonite
I have come across the ownership portfolio when doing a public valuation inspection at the inland revenue in 2003 that EM Services Pte Ltd own at lease over 10 units of Regency Park
units (an upmarket condo in district 10) The rationality of running a town council should utilising the funds for maintaining the estate if the portfolio investments shows these
ownership it does means they are overcharging and collecting too much conservancy and maintenance fees. what are we so say when the fees are collected however the level of service and cleanliness is almost zero.
This is just the tip of the iceberg. The way the current government runs the country leaves me sick and disgusted. Very few(if any) of the current generation in parliament have any sort of vision or ability to get things done. Simply pathetic. We’ll see how long this currrent system can last before it implodes on itself.
The town councils should just aim for a balance budget and not be obsessed with running a surplus for surplus sake…
why refuse removal charge was reflected on our PUB bill & should that included with monthly Town Council S & C charges, isn’t this a double charge from every local residents. Even Pub bill there are a lot of additional charge with adding burden to every citizen residents. The Charges like water conservative tax when there are already got 7% gst, look how greedy our government semi government sector.
Furthermore, what the hack of this sanitary appliance fee for 2 fittings, shouldn’t that consider our home mortage when we purchased the so called subsidy flat. Lastly, waterborne fee, look i am ready sick of our government sucker mentality money driven strategy company.
This money crazy society will soon be undone by the greedy culture eventually.
As part of the younger generation in sg, I will be reminded to cast my vote wisely in the next round of election. May I implore for more truth to be revealed as we continue be disgusted by the current govt.
The truth is You see more Singaporeans picking anything that can get them a little value to survive; see Martyn Sees’ video for proof.
Town Council funds and UNCOMMON Conservancy Charges for COMMON Area Maintenance?
It is interesting to note that Town Councils actually use public funds to invest, and that there is $1billion in town council funds? It is appalling to learn that Town Councils, with example of Holland-Bukit Timah Town Council’s investments, should even invest using public funds that are meant for common area maintenance. In addition, nothing is done to pass back the huge amount of earnings back to the residents as savings. In fact, the conservancy charges seem to increase at every opportunity available, e.g. increase in GST.
On this note, with references to Ms Maria Loh Mun Foong’s letter on “Why higher fees for empty flat?” (on ST Forum, Sep 29, 2007), as well as the news article “Hougang Council Raises Conservancy Charges” (by Jeremy Au Yong on ST, on 3 Oct 07), I’m writing this letter to the Town Councils to query their rationale for the current differentiation of Service and Conservancy Charges (SCC) rates based on the type of flat. I opine that the logic behind this design is fundamentally flawed, as the system is not consistent with its very purpose for which it is used for.
1) Purpose of SCC. SCC that are “collected by the Town Council monthly are for the maintenance and enhancement of the common areas. This does not include collecting and removal of refuse.” (ref: http://services.spservices.sg/cs_faq.htm#Qn8b) Purpose of SCC is to provide for funds needed for the maintenance of common areas in the estate (i.e. the corridor, walkways, playground, etc). How then does each individual flat area fall under the definition of “common area”? Each flat is an area that is “privately utilised” by each owner. Unless Town Council is intending to maintain the individual flat’s premises, there is no grounds to include each individual flat area as “common area”.
2) Property Tax & Refuse Removal. Property tax is already differentiated based on the type of flat that one stays in, and this is consistent since personal property is not shared common land. Thus, it is fair that property tax be based on the size of the flat and its share value. However, there is no reason that the SCC, which is for the maintenance of “common areas”, should be based on the same principle used in property tax calculation as well. Likewise, the refuse removal charges for each property owner are paid to the SembWaste Pte Ltd in the monthly utilities bill.
As such, I think Town Council should be clear on what “common areas” constitutes. Common areas in the estates (in both private estates or HDB estates) are, as the name suggests, utilised by everyone regardless of the size of property they stay in. i.e. someone staying in a 3-room flat will also use the same corridor, same lift, same walkways, same playground, same void deck, as another person staying in a 5-room flat.
I opine that SCC, based on its purpose of maintenance of common areas, should be a flat rate for all flat owners regardless the type of HDB apartment that he or she owns.
I have raised this issue to Town Council since Nov 2006, but have yet to receive a satisfactory reply on this query. I would appreciate that Town Council will review the logic behind SCC (i.e. the “why” of SCC, and not the “what” of SCC), and correspondingly review the existing system of differentiated SCC charges.
Senja Link
Bukit Panjang
I cannot comprehend. Why is $1b used for investment when our government cannot even fork out $20 more for the poorer citizens who cannot even afford $1. I cannot even comprehend how the people in Town Council can have good investment foresight. If they do, they wouldn’t be in the Town Council will they?
The covered walkway, the fancy (but slippery) tiles at the void deck, the expensive designer playground are redundant for the average commoners. What I would like to see is the money being used to subsidize our poor old folks who live in poverty after toiling almost all their lives for Singapore. Why are we still asking them to work, work, work? Why not just spare a bit of that $1b as welfare for them? I’m appalled.
Vote wisely next time !!! If you have a chance to vote at all !!!!
Why you all so worried about the 1 bn? GIC just bailed out UBS with a 10 bn capital injection. Imagine 10 bn growing at 5% interest … do you still need longivity annuity?
so much money and yet so little done for the estates and we even have the govt saying that the punggol CC requires fund raising before it can be built. looks like whatever going into the pockets will find it difficult to be distributed back to the citizens and ended up, we have the town council trying to earn more money and focus in investment instead of thinking how to improve each town and quality of living.
#19 Good observation! I doubt of a satisfactory explaination unless we form a mass petition of some kind!
15) TuraiKiller on December 5th, 2007 7.34 pm why refuse removal charge was reflected on our PUB bill & should that included with monthly Town Council S & C charges, isn’t this a double charge from every local residents. Even Pub bill there are a lot of additional charge with adding burden to every citizen residents. The Charges like water conservative tax when there are already got 7% gst, look how greedy our government semi government sector.
Furthermore, what the hack of this sanitary appliance fee for 2 fittings, shouldn’t that consider our home mortage when we purchased the so called subsidy flat. Lastly, waterborne fee, look i am ready sick of our government sucker mentality money driven strategy company.
They can and will come up just about anything and everything to collect any extras $$$ from the citizens, all these applies to all garment and semi-garment or related companies all these years since the last GE. So now you know who you would vote coming next GE.
However wtf are our town council having so much in reserves. All these “XXL” fund could have been better utilized to subsidize our conservancy charges, helping the poor and needy etc. Often we heard about how volatile our economy is, the need to save billions into our reserves in times of eventualities, thus the need to raise revenue from taxes like GST. Then next moment, we have this “billions” in sinking fund in our town council.
I am alright with our GIC handling our country reserves by investing, but town council…? Now i am quite perplexed. Are there ministries or government bodies having so much in their reserves also doing some investment too? In order to fill so many coffers in tiny Singapore, no wonder cost of living in Singapore is going up.
Talk so much also meaningless……like Jack neo recent movie mentioned Singaporeans only KPKB, complain and complain, with no action taken, slowly it becomes none of my business and the issue will die down eventually.
The funny thing here is that they allow TCs to charge higher so they can have more saving kept aside for them to invest (gamble)? On the other hand, those who cannot or unable to pay up their SC&C charges would be charge in court? I really don’t get it, it doesn’t make sense at all?
can anyone please help to explain the logic part of this thing, I still don’t get it!
Ya i was slapped with a legal fee of $100 when my owed town council’s fee for three months was only $225.00. Imagine at least 40% of the total bill was for legal fee.
A friend of mine finally has to attend court hearing as he was shown a lawyer’s letter for failing to pay the town council’s bill for almost six months due to lack of funds.
In the end, he has to borrow to pay off the bill or else they want to put him in JAIL!!! It’s a criminal offence not to pay your town council’s bill but they can use your money to wager on the stock market!
I have also heard of extreme cases whereby people go to jail for failing to pay excessive town council’s bills.
Sad case our country…
The loss in Creative Technology while still very painful is still not as bad as the minibond losses, because there is at least a residual value left in the Creative shares. The utter total loss in the minibonds without recovering a single cent back is probably because the banks were offering very attractive incentives for investors to buy their minibonds. For every $50k of minibonds the bank gives away an expensive digital camera phone or something of equivalent value. Are all these free gifts accounted for?
Just interested to know, actually how much yearly budget have Government given to Town Council every year and how they spend this money?
Another thing, TC said they have earn a sum of money about S$24 million throughout the investment period. Again, where is this profit go to? And are this sum of money reported to the government. And will government reduce the budget to TC due to this earning from this investment?
Can TC allow to investment in HIGH RISK investment using country money? Should someone needed to be responsible for this losses of Singaporean money? Should our Ministry be notify about this investment before it taken place? 8 million is not a small sum of money use to investment a HIGH RISK Invesment, moreover IT IS SINGAPORE MONEY.
Where is the TRANSPARENCY where PAP everytime told us. Should TC give us a Yearly Finacial Reports every year to let us know how & where they spend our money to?
If there isn’t mishandling of public funds, who is responsible for approving such reckless high-risk investment in the first place. Whatever the intention, we need to see some accountability of the such massive losses of SGD 16 million. If Teo Ho Pin directs to sue openly to GOD that his decision to put so much TC funds into credit-linked notes was based on its low-risk nature (explained by the FIs), the public could properly understand. Teo hasn’t shown any remorse for gambling away so much public money by argueing that they are always right. He isn’t fit for that a post and the government should sack him immediately. If there’s indeed such excess funds with TC, then stop taxing us as our salary would soon be cut (special effort driven by government and DBS). Maybe some will even loose their jobs next year!
@ Patriot. I feel it isn’t totally Dr. Teo Ho Pin’s fault. Who knows? May be he was in the dark till more recently – as you know – MPs don’t always handle all calls and all minute details themselves. Very easily, an important phone call or email can slip and go unnoticed because they are screened by assistants.
While Dr. Teo Ho Pin may have accidentally leaked about the investments on SCC (service & conservancy charges), it’s anybody’s guess who told him to shut up (the sudden revelation that the TC accounts are “private and confidential” and that he can’t reveal anything else). And a guess can be right and it can be wrong!
Patriot said,”If there’s indeed such excess funds with TC, then stop taxing us as our salary would soon be cut (special effort driven by government and DBS). Maybe some will even loose their jobs next year!”
TOTALLY AGREE!
A ruly accountable TC will have a policy statement that clearly show its objectives and investment strategy. It will also indicate what social policy it will pursue. When recession hit the economy, measures to reduce cost to the residents should be a priority. After all the fund belong to all the residents and it is there for time like this. Getting out of touch with reality is the first sign that those in charge is living in a different world. The whole political system in our country is so corrupt and out of touch with the ordinary citizen that I am afraid something truely radical have to take place before we could restore a fairer society that could offer a level playing field for all. Many had taken the easy option of packing up and buying a one-way ticket to greener pastures. For those without this option, sadly have to stay put and tough it out. But there is a simple way out. Use your vote wisely come the next GE. That is the only constitutional right we still possess as SinKaporean. Miss it and there will a long wait for the next round. Surely we had been patience and good citizen, over all these years.We let our elected leaders to do their job but what had they done lately – world breaking news for being the highest paid ministers in the world. Are they meeting the needs of Sinkaporean especially those economically disadvantaged, aged and sick? If they had done a good job we would not been blogging about their greed, evil and nepotism.