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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To #45 cyngenx:
Given the lack of transparency on their investment portfolio and returns, the citizens cannot fairly evaluate if Temasek/GIC is doing well. Are we supposed to take their word for it, or should we hold them to higher standards (e.g. proper documentations)?
Private bankers/hedge funds may have the valid excuse of maintaining some form of secrecy (to remain exclusive and provide “better returns” by leveraging upon information asymmetry in the markets). But Temasek/GIC, which most foreign observers will recognize as sovereign wealth funds, are using Singaporeans (without the benefits/protection of shareholder rights) money to fund their financial adventures. It is hard to give them the benefit of the doubt given the lack of information and that their incentives are not aligned to us peasants.
I even doubt if Temasek/GIC was doing well in the first place. They have not demonstrated their claims, beyond reasonable doubt, to us “shareholders”. For all we know they are just siphoning off the money Marcos-style.
Let us not discount the possibility of money laundering of some sort were in her cards. Not sure who will have the power to independently audit.
In an article in Sunday Times, Mr Tharman said that it is for Temasek, not the Government, to comment on its investment moves. He said it is the responsibility of the board and the management to make individual investment decision, whether large or small.
this is akin to something like i gave you 1bil to invest. If you make, i’ll give you 1% bonus, but if lose, then you just need to return me the balance.
of course the mentality is to throw whatever you got out there, hoping to make a big one, since all the big banks are also doing the same, and all the fund managers are making big bucks through bonuses.
it will be better if able to leverage and bet 10 to 50 times the amount, then i can get more returns in a shorter amount of time.
this risk is good when the stock market is on its way up, and i am making 10 to 50 times of what i initially have, but if the market turns the opposite direction, the losses are magnified too.
and the best part is that our Tamasek bought ML at the peak, what a sound judgement… from non other than our elites of course, and i still do not understand why they do not want to be accountable and let singaporean knows the truth?
Advice to all investors is ” buy low sell high” but our temasek practices just the opposite ” buy high sell low”
This indeed is courage. Courage to lose what is not yours.
“” buy high sell low””
What a unique strategy that only world-class clowns can derive. Hope HoJin-x and her experts can write a book on this “secret recipe” strategy. It must be very extremely effective as their track record speak for itself. Such a book will make Singapore a world investment research hub. Kudo to our clowns !
‘Courage to cut loss ..’??? These words only used to protect their office and political allies.
OMG, the only description about our elites in Singapore… they are just a bunch of shameless people. They already know they wont get any respect from the citizens, but they dont give a dame as they are in full control.
They think they are still contributing to Singapore these days, but if one is to take an objective view at the policies, one can see the policies are basically served to enhance their political powers and protecting their own interests.
People! Our elites have become too complacent.
Singapore will be Iceland all over again.
our tiny Red Dot is suffering from lost of blood due to punctured wound. locals are bleeding all the way to the banks….
how much more blood lose can our tiny Red Dot take?
to andrew chuah:
u r a joker.
to toiletmatter :
I can assure no lessons are learnt by the leaders because no humility is shown.
It was just an allocation allocation/ tactical exercise in 12 months.
Do we get to enjoy the money if our ‘national wealth’ is increased? What does it mean if Temasek makes money from ‘our money’? Do they pass it on? or do they share among themselves as bonuses? If they do, then they are just using our money for their stakes isn’t it? Problem is, if they lose, its OUR loss!
Enough is enough!
The looses is just too much and
NO one seems to be responsible for it.
NOT the government!
NOT the Ministry of Finance!
Then WHO????????
No Body’s Money?
Then distribute it to the citizens of Singapore!
I’m just plain SHOCK!!
So many investment failures in the past, but instead of learning from it and removing the source of the problem, they get rewarded further for their incompetence with all sorts of awards.
In the public sector, such CEOs would have been fired years ago and their poor performance would not be allowed to snowball to such a large scale.
She is but a part of the problem within the system. Remember that when she was making all those previous mega losses in Temasek, her husband (who was then the Finance Minister) was responsible for monitoring her company’s performance.
This is the price Singapore has to pay now for allowing the checks and measures within the system to be overridden.
61) Justin
Dear Justin, of course it is head i win, tail you lose.
didn’t you see from the example of our PUB bill? When they bought their fuel at a low, they have good judgement and are awarded good bonus.
but when they bought the fuel at a high, we got to subsidies them by paying more for electricity.
At the same time, spin doctors would come out and tell you grandfather stories to justify on the increase. Its like everything is working like clockwork, very systematic, PAP style.
Everyone seem to keep quiet about this MEGA LOSS of S$7 billion ?!
There is simply nothing mentioned on Straits Times or any mainstream media about the losses as well.
It really makes me angry and sad to see how our politicians (that extends to their family, such as Ho Chiong as PM’s wife), accounts to their shareholders, which are Citizen of Republic Singapore.
The unedited version of the article is here: http://singaporesocialactivist.blogspot.com/2009/05/in-culture-of-secrecy-no-courage-is.html
Ho Ching, speak up! Don’t act like LBW. Face the music and move on. There is no place to hide unless you leave S’pore and for the government. Someone will have explain to us in detail and what is going on!!! Don’t tell grandmother storey again. We are sick of it. Just tell the true.
“NO one seems to be responsible for it.
NOT the government!
NOT the Ministry of Finance!
Then WHO????????”
Isn’t that obvious who is responsible eventually ?
Yes, it is the citizen that will be responsible for the investment loss because they are the one to pay the price ultimately through CPF manipulation, increasing high flat price, high cost of living (expect higher GST soon), etc.
Those expensive clowns will still million dollars salary and happy smile because money will keep flowing to them through leegalized ponzi scheme.
“Ho Ching, speak up! ”
I thought she already said “No Regret” that says it all. No Regret in losing billions. Yes, No Regret.
“no regret” + “one life, live it!”
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die die dont admit mistake, do wrongly also say right, otherwise old man no face to hide