Ravi Philemon
“A Temasek spokeswoman declined Friday to comment on the price the fund sold its shares for or the timing of the sale”, reported the Associated Press. Why should the secretive Temasek Holdings reveal such sensitive information to a wire agency when they will not reveal it to the real stakeholders in the government holding company, the citizens of Singapore?
In 2008, Temasek Holdings (which was by then managing portfolios worth $185 billion), was asked to appear before the US House of Representatives before a joint sub-committee of the House Financial Services Committee in a hearing related to foreign government investments in the United States. Temasek Holdings then declared that, “(it) has to sell assets to raise cash for new investments and doesn’t require the government to give approvals”, mainly to assuage US concerns on transparency and non-politicization of investments.
Ms. Ho Ching’s penchant for risk-taking came to the fore in July 2007 with Temasek’s roughly $6 billion investment in Barclays, taking a 2.1 percent stake in the bank. The New York Times then reported a former (unnamed) advisor to Temasek Holdings as warning that Temasek’s strategy of buying big chunks of companies exposes it to potentially deep losses if markets turn.
The warning by the unnamed former advisor now certainly looks prophetic. In March 2009, the Ministry of Finance reported that the Singapore sovereign wealth fund lost $39 billion – 31 percent of its value – in just eight months. It’s portfolio shrank from $185 billion to $127 billion between March and November last year.
Temasek seems to be on a roll with its losing streak; and what is even more appalling is its continuing secrecy in the face of these losses. A Temasek spokesman, who revealed that “we have divested our shares in the Bank of America”, failed to answer any other queries, including the price it got for divesting 188.8 million shares in the Bank of America.
A culture of secrecy
Secrecy seems to be the culture that Ms. Ho has brought with her to Temasek Holdings.
Temasek Holdings lifts its cloak of secrecy partially when it is beneficial to its cause. For example, in October 2004, to satisfy the legal requirements in issuing bonds to raise money from the public, Temasek reported its accounts to the public for the first time in its 30-year history. Where is this accountability when $6.8 billion seem to have been lost in the untimely divestment from Bank of America?
What is even more alarming is the fact that they would have probably kept quiet if not for the compulsory Form 13F filing to the U.S. Securities and Exchange Commission from Temasek indicating that the fund no longer held shares in Bank of America or Merrill Lynch as of 31 March 2009.
In taking pre-emptive measures from the negative response such news will be unleashed from the public, Ms. Ho posted on Temasek’s website that it will now cut its holdings in the so-called OECD countries to 20 percent as it expands in Asia and emerging markets from Latin America to Africa.
The question remains, even with the pre-emptive statement before the filing was made public, “even if there is a need to cut the exposure to OECD countries, why do it now, especially when you will make such huge losses?” Did not Minister Mentor Lee Kuan Yew say in February this year when explaining why Singapore was able to invest in American banks that, “When we invest, we are investing for 10, 15, 20 years. You may look as if you are making a big loss today, but you have not borrowed money to invest. You will ride the storm, the company recovers, your shares go up”?
How right was Minister Mentor when he says that the investments are “your shares”? If they indeed belong to the people of Singapore, don’t they have a right to know where, when and how the funds are invested; and even more importantly what are the profits and the losses of such investments? Why the reluctance to reveal to the real shareholders the actual price the fund sold its shares of Bank of America for or the timing of the sale?
Ms. Ho was the head honcho of Singapore Technologies before she became the CEO of Temasek Holdings. Singapore Technologies under her leadership bought Micropolis in 1996 for $55 million, despite knowing that Micropolis had a history of failures. Approximately one year later, Singapore Technologies had tired of losses generated by the disk-drive manufacturer and ended Micropolis’ operations worldwide; loosing $630 million as a result. The Chairman of Temasek Holdings had defended Ms. Ho’s fiasco in Micropolis by saying that she had the courage to cut the losses.
Ms. Ho seems to leave a trail of taking huge risks and making even larger losses, first with Singapore Technologies and now with Temasek Holdings.
You need no courage to cut the losses when the funds invested were not yours in the first place.
Read also: Temasek, “no regrets for S$6.8 billion loss?
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aiyoyo
now thinking+worry about our cpf, when can take out???
all these elites dont know what have they bring benefits to commoners???
aiyoyo
I hope SEC reveals further information and I know they would.
There must be reasons to cut loss at this stage as we all know Temasek has the capacity to hold. There must be infomation on such issues, since Mdm Ho has been making large losses and a number of misjudgements in her investment strategies.
We need to know who are the parties buying these assets from Temasek.
We must know if there are any Singaporean parties involved in the pruchase.
Why the sudden cut policy, perhaps a better return is somewhere else, with the funds available.
There must be rules put in place in Temasek, for large losses, to be explained.
your cpf will be trapped, they just raised prices of public housing and people will continue to pay till they die and not be able to withdraw anything.
Will Temesak Holdings follows what Chartered Semicond has did in the 90s by employing Barrie White and loss milions of dollars in his compensation.
Later they employed another Accountant as CEO who too fear to invest and since lost to TSMC and UMC. Now CSM technolgies already is history
Temesak holding shareholders are not Singaporean but the Lee’s Family!
So they won’t account for their losses!
This is what happens when we do not have the best man for the job but instead the “BEST” man for the job. No need for others to justify her capabilities; her track record is consistent. She even received a mayday award. LOL. Again. &*^^&*!@^*&%#&^ for losing billions of our hard earned savings.
There’s a good reason I do not factor my CPF contributions in my financial planning. It really isn’t *effectively* my money. I feel it is best not to put the additional mental burden worrying about stuff I have zero control over. That way, if the government loses all the CPF money, it will not impact whatever financial plans I have. And if the money somehow survives intact and if I survive till retirement age, it becomes a nice little bonus.
Having said that, kudos to those who would continue to fight for transparency in the way the funds are managed. I would just get too riled up and unreasonable if I had to think about it too much.
information is power.
don’t expect ho ching or the pap to share power with you and me.
Why would a govt ruled by the husband and overseen by her father-in-law not protect her from the peasants’ revolt? This is the Lee family’s playground and “whoever tries to smack it down” the elder Lee has promised he will destroy him. He and his family will be as hated as the Tsars of Russia and Stalin.
Well that’s not surprising at all. HC & her TH’s modus operandi are basically hallmark of what the ruling cabal practices anyway, which is going to extreme measure in self-glorification such as rewarding themselves with incredulous salaries, but yet resorting to smoke-screen tatics during crisis times such as now.
Bet Ho Ching will be on the next PAP ticket to some GRC.
Btw, her name should be change to Kah Ching,.(cash register ring, but her’s is for payout, not collection)
Long Live Singaporeans! 1st World Country! But why are there so many old foggies selling tissues still! Sigh………………
Time to wake up mates!
Anyone noticed that she looks like Thansin the in photo above?
The first mistake that the govt did was to appoint the PM’s wife to head Temasek Holdings. Speculation was rife that indeed the govt now is a monarchy rules by a few good men (and a woman).
After 5 years, with 50 over billion losses, it is time for her to go but not before she decided with the govt to spearhead another loss making investment strategy. She may yet bankrupt the country’s reserves with her ill-timed investment and strategy. Some people just can’t do investment without making losses (just like me). It is not just in their DNA.
One wonders what will the new CEO do and how long will he lasts before someone local takes over? He could just be a sitting duck to take in all the blame.
Specualtion is rife that the new CEO will take the rap for the huge losses to be announced soon after he takes over from Ho Ching.
Ho Ching track record is dismal starting from Singapore Technologies then down to Temasak Holdings. Singapore will be poorer for all her wrong investment portfolio. We all could have a free HDB flat if the losses are all make intact. 50 billion could fund our unemployment benefit to the tune of $10,000 per Singaporean if the whole population goes unemployed.
There is a joke going all round that if you want free money go to Temasek! ABC Learning got A$500 million from Temasek Charity before the company went bust. Same for Bank of America and the rest. For the record, Temasek lost $4 million in BOA. Lost another 1 billion over in Shin Corp (if they sell off their stake) and several other billions elsewhere.
How long more can we stomach such losses before the people stand up and shout…
I wonder if TH made this investment with eyes wide open?
If LKY was right about these shares truly belonging to us, the ordinary citizens, then can we therefore safely say that the funds were held in trust by Temasek on behalf of all Singaporeans? If so, did Temasek breach the duty of care when it decided to invest in BoA even though every aspects actually pointed to the fact that it would be a bad investment?
I would truly love to know what Temasek’s risk appetitie was that prompted the Board to give the green light.
until recently,
pm= lhl
finance minister=lhl
temasick=hc
gic=lky
ie. wife answer to husband. & does son dare to question father?
singapore simply has no other talents in money management of the country??
or simply exceptional familee as gct said?
Am I Naive or am I NAIVE?
I hope I not Naive but then you have to tell me.
I think Ho Ching was just carrying out her father in law’s orders. Anyone thinks Ho Ching will go ahead to make those decision to pump in billions without LKY approval? Who knows Ho Ching might be a puppet CEO or an investment scapegoat of LKY? Still remember Suzhou failed investment most people blamed LKY for throwing multi millions of Singapore tax payers money away?
What can citizens do even if they lost all reserve? We can only build check and balance with more alternate parties coming in the next election. Or perhaps pray for some miracle that more citizens or souls in the parliament may awaken to the peril of nation we are heading.
She will definitely be brought into parliament in the coming election. within 2 years she will become the next finance minister. The next election after that PM Lee 2nd son will be about 25 years old…. time for him to get involved in PAP too.
Percevale on TOC on 10 February 2009 (Looking Forward to more Goodyear):
Ho Ching has stepped down as CEO of Temasek Holdings. For over 6 years, the Prime Minister’s wife held one of Singapore’s most powerful positions.
During her reign, some losses at Temasek included:
- SGD 400 million- ABC Learning Centre, Australia
- SGD 1.4 BILLION – sale of Merril Lynch (according to Reuters).
Figures from Mutual Fund facts report that Temasek paid USD48 per share and at time of sale, sold their shares at USD29. Temasek denies this.
- SGD 2 BILLION loss – Shin Corp fiasco
- Further SGD 2.4 BILLION – Shin Corp fines
Under her, Temasek’s investments in UBS (Switzerland), Citigroup, Barclays and Merrill Lynch – at an original cost of US$21.88b – have declined on by some 47 percent in value.
Paper loss of US$10.28b. Paper Loss defined: an unrealized loss on an investment calculated by subtracting the current market price from the investor’s cost.”
S L Lim on TOC on 9 February 2009 (Memo to Prime Minister):
“I rather think the foreign executives know that it is part of the deal. Even taking raps can be priced appropriately. Self-preservation at its best.
I am disgusted because each fiasco is bigger than the last ones:
1. Micropolis (about US$300million – gone forever)
2. Charter Semi (dying and unlikely to see the light)
3. StanChart (lost)
4. Baclays (lost)
5. Shin Corp (lost about US$2 billion -mark to market)
6. Bank of America (formerly Merrill Lynch – lost about $4 billion – mark to market)
Purchase £975 million (approximately S$3 billion) in Barclays PLC (”Barclays”) via its newly issued shares at a price of £7.20 per share, representing 2.1 per cent of Barclays’ existing issued share capital.
6 Feb: 104.80 p 4.80 (4.80%) BARCLAYS (BARC.L)
Exchange Rate in 2009 Gbp1= Sgd2.10 in 2007 Gbp1= Sgd3.20
paper loss over 75% exchange loss about 35%”
TEMASEK’S BOA SHARES STORY: BUY HIGH THEN SELL WHEN IT IS LOW. THEN NOTHING LEFT TO SELL WHEN IT IS HIGH AGAIN. A HIGHLY UNCONVENTIONAL, HIGHLY TOXIC STRATEGY.
SHE IS ACTUALLY A NICE & CARING PERSON. BUT SINGAPORE HAD WISHED SHE HAD STAYED HOME TO MANAGE THE LEE’S HOUSEHOLD AND JUST BREAK PLATES AND BOWLS RATHER THAN OUR COFFERS.
wow, look at what our FM got to say today in the Sunday Times?
‘What matters to the Government is the overall performance,’ he said, adding that an investment should be assessed ‘over the long term’.
by trumpeting our achievement and sweeping all bad news under the carpet, so nett nett we are still good. Only hear the good stuff from 90.5, remember?
‘We track, engage and evaluate the performance. But we don’t just look at six months or one year,’ he said.
Yes thats correct, we look at more than that, 1 year 3 months to be exact.
“And over the last five years, Temasek has not underperformed but has instead ‘come out significantly ahead’ of other major investors.”
we can’t seems to support this comment with any concrete proof, but anyway, lets move on…
‘I don’t think anyone can honestly say that they’ve done badly compared with other major investors.’
ya, they are quite good at sucking money from singaporean, but sucks at investment overseas.
He also pointed out that all major investors have been significantly affected by the global downturn over the last year.
yes, we should be part of the herd and not stands out.
He added:”Over the cycle as a whole, both boom year and sharp correction, Temasek hasn’t come out badly but significantly ahead.”
how? proof? by selling our power plants? or by monopolies of money making GLC in singapore? by capitalising on taxes and CPF?
“If one considerd the recent cycle, it was not underperforming compared with other major investment, and in fact did much better than other major investment”
Why are we aways comparing that our losses are lesser than other? why can’t we tell other that our investment are safe during this downturn? why can’t we be more conservative like during LKY era, where are investment are mostly in government bonds, slow but steady. Why does we become so greedy that we need to leverage and invest in high risk products?
Currently, with our CPF payout made complicated with so many schemes, I won’t be surprise if in future, a new sheme where a portion of your money be lock and only allow to be withdrawn when your great grand-children reaches 21.
Has anyone ask who are the Truth Shareholders of Temasek Holdings or GIC.
Lee Dynasty’s Members or 3 millions Singaporeans or 1 millions foreigners?
Anyone read 18th century European History understand how Napoleon betrayed the French Republic’s Ideas and put his cronies into different positions of his Kingdom while in American, George Washington refused to accept the title Emperor!
Singaporean, ask yourself? Do you want another Napoleon or Washington in the next Elections!
what to do….her husband said….something like this…”we don;t discuss work at home……”. Won’t be so much losses if whole family plus all in-laws discuss work at home. After all…very highly paid….can bring work home.
Yes we are looking at long term… 1 year 3 months to be exact…
The best joke must be that our Finance Minister have the thick skin to keep saying when compared to others, they are not the worst off. It is equivalent to saying that they could have even lost more of our money. So be grateful that they have not lost everything.
It’s really a big joke especially when they have been saying that they are paying top money for the best brains to manage our money. Looks more like they have hired a bunch of con-men with the most pretentious credentials.
Let’s wait for what bull story LKY & family has to tell us next.
For her “great exceptional” performance that cause great hardship to citizens late(yes, expect more bullshit from gov to get money from citizen later on), we should name a orchid after her. Since she lost so much money, the orchid is called “Ho Jinx Leestroyer”. Can’t imagine how the orchid will look like …
R they BoChap king?
I wonder.
I think they good good wan. Always number 1. Very smart people.
Got future wan. u believe me or not?
We are all talking about the losses at Temasek, but do not forget that the losses at GIC dwarf the losses at Temasek.
Its losses by moderate estimates are in the range of 100-150 BILLION.
Well, one thing is for sure, they can’t use the long-term investment blah blah to explain this fiasco away, so it should be the other “diversify” explanation and that TH has good trek record etc, so forget it
Let bygone be gone & just let our people peacefully suffer the damages dealt by hc. Its not like lee & co can pay back 100 bill anyway.
In return , disband temasek & gic already, theres no need to drag on, that is true decisiveness, no some shameless praisery after losing investment
Tehran Times – 4 hours ago
Singapore’s sovereign wealth fund Temasek Holdings Ltd. sold it entire stake in Bank of America Corp., that it received when the US bank bought Merrill Lynch earlier this year
In memory of what she did, a road in Taman Jurong is named after her. Ho Ching Road.
If the wikipedia entry on Ho’s work background is correct, how did she become CEO of Temasek?
She only had 15 years work experience before joining Temasek and a lot of that time is related to engineering? Did Singapore run out of experience fund managers or CEOs with substantial financial markets experience during the early 2000s????
25) Alan Wong
Yes you should be thankful that we only lost 50bil, taking into consideration that we are paid millions. if you ever think of paying us peanuts like those sub-standard ministers in other countries, we might even lost everything…
god of gamblers 2009
17/5/09
As I see, these are commercial decisions and she sure has the guts to cut losses orelse worse is to come. When I first touch on the global financial crisis in one of the earlier articles on TOC, I wrote worse is to come and this was late last year and worse came and much worse is to come and recent world stock markets so called bull runs were artificial. Only hard hard work plus work smart will take us Singapore born Singaporeans very far far ahead and no more short cuts and I had paid a very high price since 1997 and still struggling.
Regards
Andrew Chuah
Do not forget the lyrics of the immortalised Frank Sinatra song:
“Regrets I have a few, but then again too few to mention……
I did it MY WAY”……………………………………………………………………
GST will 10% after the next elections……..
Is Ho Ching and the top management staff in Temasek still getting their 8 months, or more, bonuses? I am not surprised since there is no transparency and accountability.
I have read many articles here but this article is the most satisfying in that the picture used is simply beautiful.
the national fund losses is an undeniable fact no point crying over spilled milk , what really matters most is whether lesson is learnt & will leaders avoid repeating the same error in history
Read Finance Minister Tharman in Sunday Times vigorously defending Temasek on the loss when he should be scrutinising and asking the tough questions. They are trying to confuse us and compare with foreign government funds which lost a bit more than them, or a stupid all equities benchmark (when obviously) Teamsek has much bonds).
But when it is time to compare their pay with other countries’ ministers, they say don’t compare. Instead of paying world’s top salaries to get top performance, we are told it is ok to be like other countries (mediocre performance).
The more I think the more I believe all these are just part of LEE family business. LKY as GIC chairman, Ho Ching as Temasek CEO, LHL as Finance Minister and PM … so the entire Singapore fortune is built around these 3 legendary public figures? wtf …. we are simply taking huge risks by trusting these LEE family
You win some, you lose some.
Objectively in such high stake games, it take courage to make decisions too – vis a vis the above article ” in a culture of secrecy no courage is needed”.
It is unfortunate that the incumbent CEO happens to be PM’s wife, and as it is – it is also a learning curve albelt at a very high cost, not only for her , but for her chairman, entire BOD, policy makers as well as to the MOF.There is no need and point to beat around the bush and be evasive, like the Finance Minister tries to cover up, and then confuse citizens – not all Singaporeans are not born yesterday
What is done cannot be undone – Singapore can only hope that such arrangements will not happen again – it is heartening to see Ho Ching taking the right step and going.
Best wishes.
This is one sore point happening to the country I love. To a normal Singaporean like me after reading the reports about Temasek failed investments in Bank of America and other countries, I come to a view that Temasek did not protect Singaporeans wealth and below are my 10 views of this fiasco.
1. There is a gambling attitude in this company from an outsider point of view. When you talk about long term, you talk about a generation or more, 25 to 30 years or longer or “till death do us apart”. 1-3 years is short term investing or you call it trading.
2. Temasek missed the April and May stock market rally! This really pains me. Once you sell, there is absolutely no chance to regain back your paper losses. Bank of America shares is hovering around USD10 now and if you sell now, you will lose less.
3. This article is biased to me from the start because of the photo the author has inserted. A better picture should be used to show the author is having a neutral stance.
4. Asset Management companies face clients redemptions and they have to answer to clients with regards of their fund performance. Temasek do not face redemptions and their performance is not transparent to their clients which are us. They have a role in protecting our money. Without such mechanism in place, it’s very hard to be serious in protecting our money. It gives them an unfair advantage over Asset Management companies.
5. The least Temasek should do is to out-source some of the funds to reputable asset management companies but this can be a debatable point too.
6. There are so many good companies in the world or the United States where you can hold for a long term (for e.g. Coca-Cola, Johnson&Johnson or McDonalds) and both GIC and Temasek instead went for the companies that cause this recession. It’s really disappointing. Can we say that the analyst and the investment managers in the company are not good enough to manage our money?
7. If the analysts and investment managers who were trained in investment knew about the errors made by the company previously, do they have the courage to stand out and discuss with their boss about it?
8. Despite their rich educational background, this episode clearly shows you can’t be an investment genius just by studying and getting top grades. You need to understand the world and the market.
9. Too much risk-taking in financial companies holding billions of unknown losses. You never know whats in the books of companies like AIG, Citibank and bank of America. By putting huge amounts of money into it is sure madness and excessive risk-taking. Again poor research again by the company researchers.
10. Let’s hope Charles W. Goodyear can do a good job in restoring our wealth. Mr. Goodyear was CEO of BHP Billiton and was formerly an investment banker too. Hope he succeeds.
We have to put things in perspective.
In the many years spent investing our funds, GIC and Temasek Holdings has mostly made money and grown our national wealth. Even if another person (apart from Ho Ching) was head of Temasek, this person is likely to have lost money in this credit/economic crisis. Even one of the greatest investors of this age (Warren Buffet) lost money. So please look at the larger picture and be a little more fair to her.
Ho Ching had a lot on her shoulders. Be it good times or bad, it is not an easy job.
In any case, if we aspire to grow our national wealth, we cannot avoid taking risks. And when you take risks, you win at times and you lose at times. All in all, Temasek and GIC has done us well. So let us give credit where credit is due.
“All in all, Temasek and GIC has done us well. So let us give credit where credit is due.”
I dont think so
45) cyngenx
grown our national wealth? wow thats a worthy one? it seems like you have got some insider news that we do noot know? how about telling us how they manage to grow our wealth? all details pls, not just bit and pieces of only the good stuffs
“All in all, Temasek and GIC has done us well. So let us give credit where credit is due.”
I’m totally agree. Mr Tharman, you are been frank. Indeed these pathetic organizations did “DO” us well, now that citizens should be prepared to pay for the disasterous mistakes in coming times make by you, the ministers, MPs, and the government because you clowns don’t do anything to prevent that from happening. I’m sure now that the government is busily finding ways to dig out more money and give more bullshit in the future.
Mr Tharman, you should be credit for pacifiying us now because that what you are been paid millions after all.
44) Retiree
are you sure she step down willingly? or more likely “force” to go?
no courage is needed if you did it the conservative way, like what they have been doing all along… and anyway, its not their money, so no courage needed for that too… just whack. if win, take bonus, if lose, resign, so simple… this is what is happening in those so-called big banks