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“We look at this speculation sometimes with irritation and sometimes with amusement because all of it is very far away from the truth, including those sources who claimed to be familiar with the situation.” – Temasek CEO Ho Ching on Charles Goodyear’s departure. (Straits Times)
Leong Sze Hian
In May this year, the Straits Times carried the following headlines on its front page:
In Parliament in May, “The minister said Temasek’s $58 billion fall in value came after a ‘much greater gain’ of $114 billion over the preceding five years. ‘Even after taking into account the recent sharp decline, Temasek’s portfolio had still grown by $56 billion over the course of the cycle,’ he told the House” (“Temasek made big gains”, ST, May 28).
Now, we’re told Temasek Holdings has lost S$40 billion. (“Portfolio down $40b”, ST Breaking News, Jul 29).
So, does it mean that with the latest information available today, what took five years to accumulate ($114 billion from March 2003 to March 2008), has been lost - $58 billion from March 2008 to November 2008 and at least $40 billion from January 2009 to March 2009 (over a total of just 11 months, excluding December 2008 for which we have no information) ?
This begs the question – when the Finance Minister gave the figure of a net gain of $56 billion in Parliament on May 27, did he know that at least $40 billion had already been lost from January to March this year – almost two months before his reply in Parliament?
The latest Straits Times report (29 July 09) says:
“Singapore state investor Temasek said its portfolio slid by at least $40 billion, or more than a fifth, in the year to March … Ms Ho (CEO Ho Ching) did not give the exact portfolio level as of March 2009″.
Murky figures
I find it somewhat strange if not rather amusing to hear that we lost at least $40 billion. What does “at least $40 billion” mean? $41 billion, $49 billion, or more? Why not tell Singaporeans the exact figure? And of course, without the exact portfolio level as of March 2009, we can’t even try to make any meaningful estimate, as we don’t have the figure for December last year. Since the “at least $40 billion” is “in the year to March”, we need the December 2008 figure. Why is it that we can be told the November 2008 figure, but not the December figure?
And what does “more than a fifth” mean? More than a fifth of what figure? We can’t tell much without knowing the relevant numbers.
Isn’t Temasek’s losses, returns and portfolio values, like a never-ending jigsaw puzzle?
In the Wall Street Journal article, “Temasek recoups some losses” (Jul 29), it reported:
“We are certainly not happy with the negative wealth added in March last year as well as March this year,” Ms Ho said… However, the figures show that Temasek has recouped some of the initial losses made at the height of the financial crisis as global markets begin to rally on hopes that the worst of the downturn has passed.
Since the global equity markets have risen by about 50 per cent since 9 March 2009 (MSCI World Index), and “the figures show that Temasek has recouped some of the initial losses made at the height of the financial crisis”, why not tell us the losses to-date this year (June/July 2009), which surely must be much better than the “at least $40 billion” loss until March?
I hate to say this but not telling us more now will only make Singaporeans even more unhappy by not giving us the better figure now, compared to March.
I cannot understand the rationale for this . “We are certainly not happy” may be an understatement which is perhaps self-inflicted, with Singaporeans perhaps being subjected to more unhappiness than necessary.
Perks “deferred”?
As if to convince us that they would share the unhappiness of Singaporeans, “Ms. Ho said the bulk of incentives to senior management has been deferred by three to 12 years”. What exactly does this mean – no bonus, salary increments, performance incentives, etc, for years? Or just that they will still get them, only later (deferred)? What incentive is there for them to try to recoup the losses, if most incentives are deferred? What is “the bulk”? 51 per cent or 90 per cent?
I think it is probably about the best time now to disclose the remuneration and incentive packages for senior management. Otherwise, it may just fuel even more speculation and displeasure as to how people are being rewarded or penalised for losing so much of our reserves.
Exuberant confidence on hindsight
In her speech at the Institute of Policy Studies, Ms Ho said:
“In our Temasek Review last year, we reported an annual value-at-risk of almost $40 billion last March. This meant a 16 per cent probability for our portfolio value to drop more than $40 billion by March this year. Indeed, it has turned out to be so, and more.”
This sounds like exuberant confidence on hindsight – that we predicted and knew the risks.
In this context, given what has happend in this financial crisis, I think no financial institution CEO would have the gall to talk in such a manner about the veracity of its risk analysis model. Almost everyone may agree that with the near-death or collapse of some of the largest financial institutions in the world, nobody is boasting about their risk models, which have been shown to be almost useless as a predictive tool. I can’t help but feel that we may be the laughing stock of the world with such statements.
So, what are the probabilities and time frames for recouping the losses?
After Temasek said last week that Charles ‘Chip’ Goodyear will not become CEO due to differences over strategy”, there have been all kinds of speculation as to what these “differences over strategy” are. Nobody knows, but I can try to fathom a guess for one possible difference. If you are the new CEO and even you had difficulty figuring out the losses and returns, how would you ever be able to face Singaporeans, the world, and how would history judge you?
In the report, “Temasek to hang on to ‘family jewels’, allow public to invest” (Bloomberg, Jul 29), it says that:
“Temasek would consider over the long term creating one more group of stakeholders, and may invite the public to “co-invest” with the company. Ho said. It may seek “sophisticated investors” in five to eight years and retail investors in the next eight to 10 years, she added. “It is important to test this over at least one market cycle during the next five to eight years,” she said. “If this pilot is successful, we may then consider a co-investment platform for retail investors in perhaps eight to 10 years’ time”.
After all that has happened, I think the least that Temasek should do is to share its expertise and future returns with Singaporeans, instead of making us wait for up to 10 years, by allowing “sophisticated investors” to co-invest first.
Why does it take up to 10 years to test whether a simple concept like allowing others to co-invest can work?
It may be somewhat akin to adding insult to injury.
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Read also: Temasek losses: Enough is enough by Leong Sze Hian.
And: In a culture of secrecy, no courage is required by Ravi Philemon.
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Well at least we are better than North Korea, they will probably say,
“I run my investment firm how I run my investment firm. You want to investigate me, roll the dice and take your chances. I eat breakfast three hundred yards away from four thousand Cubans who are trained to kill me. So don’t think for one second that you can come down here, flash a badge and make me nervous.
or
“YOU CAN’T HANDLE THE TRUTH!”
Oh, and the CPF life conspiracy is quite….i will say….suspicious….for the past, how many attempts has been done to delay CPF payment or implement such scheme that benefits them solely…
The Singapore system is just like an electronic circuit…the dear gahmen been the whole circuit and the poor people been the battery that is been discharged until point zero
Near $100 Billion dollar losses? Correct me.
Coinvest? She means take our money and lose some more from her incompetence? And then hide the fact from us? haha..
Good try..lol
I think she lost touch on how much is lost. Just any old how give a figure. She thought all s’porean got no brain. Try to figure a way out of this mess. Frankly speaking, our PM should be the one to come out to explain why this kind losses. He is still young and inexperience to handle all this problem. So, all brothers and sisters, vote them out. Show them the true colour of votes.
http://business.theage.com.au/business/lumbered-with-the-bosss-wife-20090729-e1oc.html
i hope she sleeps well every nite!
#57 blackfeline…why wouldn’t she…its not her money…just treat it like paper…and get her salary…..and all the red carpet treatment…hehehe…but i am not sure if she gets nightmares….from
The curse of the first wife.
This whole development is really makng me uncomfortable. In the first place, whoever (individual or team) has lost the right to decide the next course of action given their incompetency in managing funds. Allowing Goodyear to leave is like saying : Hey I may have lost 58b, but with your strategy, we are going to lose more than that….. really??!
The latest news is even asking investors to do co-investments. Then of course, they expect these people to share their strategy (new or old), which posted a huge negative financial anyway, and share the risks. Even an investor who posted a small positive return commands higher value than this board. You only need to take 58b/(no. of days in a year) to figure out hhow much is lost per day, and what each day’s loss means to even a rich citizen.
@ 57) + 58)
PM Lee should have 4 wives instead of just HC. Imagine dividing Temasek equally amongst his 4 wives. Chances are one in the famiLee will get it right.
Temasek lost S$40 billion……and S’poreans got squeezed by new policies such as MEANs Testing at hospital !!!!!
What a great nation!!
hahaha,, now how…?? lose so much $$, and how to account for? somemore NOT ONCE LEH!
i tell u guys….
confirm 100% got bit*h fight at the LEE mansion abt who’s gona be responsible for this load of crap.
summore, TH and HC were exposed by the Sydney Morning Herald. HAHHAHAHAHA,
Merry Christmas to you.. in advance.
potential (prime candidates!!) co-investors…
1) PM Lee, hushand, cannot siam. must trust wifey, somemore she is meritocratically chosen to head Temasek. how can wife do any wrong? she got merit & is bonded by close realtionship!!
2) MM Lee, “i must trust my son’s judgement. he manages S’pore, he is no small fry. surely he got good judgement?! he cannot be wrong, he suceeded me to be PM”
afterall, S’poreans are told to trust the leadership, so its time to lead by example. besides, full disclosure can be done during family dinner (dun need to print wan lah). hahaa…
61) Crap
Mean testing = testing how mean hey can get?
Mean testing = testing how mean they can get?
63) mice is nice
This lady is taliking about Family Jewels
Doe she know testicles (or balls, to get to the point) are sometimes called the family jewels
perhaps the truth will only be revealed once the old man passes on.
Any risk guys want to comment on the meaning of VAR? I thought finance people usually use VAR to refer to either 1% or 5% probability of loss. Wonder how does 16% come about.
The loss of SGD40 billion was also ‘unfortunate’. Divide this SGD40 billion loss to 3 million S’poreans (minus out foreigners & PRs), each S’porean will have SGD13K+ to spend domestically and the ROI will be more fruitful than those ‘toxic assets’ invested recklessly!
Really unfortunate Ms Ho, that you are still holding the position of CEO! At the rate you are ‘losing’, very soon all our CPF monies will be wiped out and eventually we will be the ones who’ll be the Most ‘unfortunate’!
God help us…..
After so much hv been said, why not get our President to share his wisdom
since he’s the ‘key’ person to protect our reserves and maybe he can help
to put it simply for most of us who are unfamilar with the various financial
jargon.
S’POREANS vs TEMASEK CEO
> Temasek CEO Ho Ching say:
“We look at this speculation sometimes with IRRITATION and sometimes with AMUSEMENT because all of it is very far away from THE TRUTH”
> S’poreans say:
We are also not AMUSED by Temasek’s lack of transparency and accountability concerning the People’s hard-earned monies.
Neither are we IRRITATED but TOTALLY DISGUSTED by your persistent refusal to disclose THE TRUTH, THE WHOLE TRUTH and NOTHING BUT THE TRUTH behind the never-ending Monumental Financial Fiasco after Fiasco !!!
Quick Estimate of Temasek CEO Ho Ching’s salary:
FACTUAL NOTE: Ho Ching is a MERE Civil Servant and NOT EVEN a Politician!
Total Annual Pay (TAP) of Temasek-Linked Companies’ CEOs who report to Ho Ching:
— Keppel Corporation CEO S$9.6 million
— Former DBS CEO Jackson Tai S$7 million
— Former SingTel CEO Lee Hsien Yang S$5 million
Therefore, Ho Ching’s TAP is likely two-digit millions i.e. upwards of S$10 million.
( ditto for Total Annual Pay [ Basic Pay + Bonuses ] of Singapore Cabinet Ministers )
Can i say singaporeans are stakeholders of the T and G and their investments?
If so, what say do they have on these entities?
what?
Will the majority continue to support for eternity or until when will things change?
I mean i am impressed by singaporeans relentless support and TRUST.
truely 1st world.
I am looking forward to oppo posing intelligent, challenging questions wrt this TH debacle in the impending election.
“you can run, but you can’t hide…”
not so well done, thou silly and unfaithful servant
no need to bitch about temasek because nothing can shake their power. just pray that you will be able to cash out all your CPF money one day
Just got an information….
When Mr. Goodyear was appointed to takeover the CEO post around March 09, there was already a plan to call for an election during June 09. HC was supposed to hand over ‘officially’ only in Oct 09.
In order to tame voters on the losses suffered and to convince voters that famiLEE is not controlling TH, they decided to call upon an ‘outsider’ to takeover the CEO post, and there was already plan to kick this temporary CEO out before Oct 09, ie, once the election is over.
This tactic was used in the 60′s. During that time, then the communist leaders were in today’s Mr. Goodyear shoe.
However, the sudden recovery in the stock market, the property market, and the economy as whole prompted them to call off the election. But still, Mr. Goodyear had to leave TH.
No matter how ruthless and unrepentant one is, there is such a thing as conscience.
The legendary Dr. Lee Siew Cho once commented in an election campaign long pass : “he cannot sleep at night .. he needs barbiturates..”
Whatever good a man has done, it will all come to nothing if he is corrupted by his power and ego. Herr Adolf Hitler has done the 1930s Germany heck of a lot of good in the early years of his reign. But he erred because he was a power-hungry megalomaniac and went insane in the pursuit of his mad dream to conquer the world.
It such a disgrace for HC to continue as CEO of Temasek especially in view of such bad reviews of her in the foreign press. If I am her, I would have resigned out of shame.
Certainly unhappy about the negative wealth add is certainly a very detached and gross understatement of the unhappiness among Singaporeans.
This is the standard of our leaders
If someone had lost such a substantial amount of money,
not thousands, not millions but BILLIONS, how is it that
that person is still in the job smiling away and her only
regret is “We are certainly not happy with the negative
wealth……..”
This is regrettably unbelievable!!!
Is this Uniquely Singapore????
When a new Chairman steps in, some of the deadwood in the company would usually be ask to leave. As for TH, the Chairman has to resign instead. By looking at this, you know how those cheena old guards in TH works. Not a company worth working for.
well, MM said they do use the best of lthe bests meaning….since they are the best and most expensive = losses in billions too.
Enough of crap excuses by Temasek and GIC, both headed by the related family members. Singaporeans want accountability which means those heads must be given the marching orders. This will never happen of course, not when it’s run like a family business.
Fellow Singaporeans,
It’s time to shake off our lethargic and pathetic nature. May I suggest an online petition calling for Ho Ching’s dismissal and Lee Kuan Yew’s stepping down from GIC?
>100,000 signatures will send a ringing message of public discontent with them.
What is the real percentage return since TH started investing overseas–i.e. minus the returns from the monopolistic profits that govt squeezed out of its citizens {SPH, SMRT, STARUB etc}?
This is the thumping elephant in the room.
The world awaits with bated breath for an answer from TH
BTW–Warren Buffet choked on his buffet breakfast when he heard that TH employs out of job ex army generals to handle investments.
They did a good job so far until this recession comes. Are they resting on their laurels and getting too complacent?
[i]Better-than-Buffet on July 31st, 2009 1.43 pm What is the real percentage return since TH started investing overseas–i.e. minus the returns from the monopolistic profits that govt squeezed out of its citizens {SPH, SMRT, STARUB etc}?[/i]
how do temasek inc invest in overseas billion$
did they do their homeworks @ all
when they bought from virgin atlantic a giant share$
temasek assumed virgins atlantic is british airways
and further assumed that it has the flyin rights to dropped pickup passengers from britain to usa…
british airport authority tell temasek
you wait long lone
and temasek threathen to sue the british airport authority
as though temasek inc think they owned the british government as well
here we have 1 idiot
his name is pendant…
a livin example…………….
“We look at this speculation sometimes with irritation and sometimes with amusement because all of it is very far away from the truth, including those sources who claimed to be familiar with the situation.” –
you guys saw how black was HC’s face when delivering the above statements? As if many Singaporeans have done something wrong to her…
Is SIA under T?
I assume so. But unsure.
SIA performing or not?
If not how this gonna affect you the People? no effect? sure?
Can someone help to compile a list of the failed foreign forays?
From Micropolis ,UBS, ABC, BOA SHINCORP MERILL LYNCH.etc etc
Do a guestimate of these losses. Do not let the injections of monopolistic GLC profits crowd the issue. Then we will know the true extent of the overseas loss.Hence the true performance of TH.
BTW–was the phrase -We will not sell our familee jewels—–a classic Freudian slip
If U people want to get the correct figure U must Mutiply By 10times.
Goon Doo People
its mistakes after mistakes and losses and more losses. what our top brains been doing?
Only such ‘economic disasters’ can happen in S’pore. Without any transparency and accountability, we won’t know how much losses were actually incurred from the day HC lay her hands on Micropolis, UBS, ABC, BOA SHINCORP MERILL LYNCH etc.
I guess the best way is to do freelance job and stop making any contributions to CPF. This way, you won’t feel heartache when they losses our hard-earned monies recklessly without any tranparencies and accountability.
Afterall, why work so hard and see our CPF being wasted away through such Dynastic Governance in Temasek & GIC.
If such failed investments were to happen in a wholly-private owned company, many heads will roll. But here in ‘Uniquely Singapore’, nevermind the losses, you still get to keep your cushy post and salaries.
If this is not nepotism or cronyism or dynastic governance, tell me what is. LKY thinks he’s Great and probably Immortal, but his earthly days are numbered. He’s such a political coward. Rule by fear. I have no respect for this evil man.
Isn’t SIA heading for its first ever year-on loss?
luckily they did not lay their hands on aeroflot, the world’s greatest airline
if they did have to rebrand as AeroSink….
Friday August 7, 2009
Temasek clarifies its position
http://thestar.com.my/news/story.asp?file=/2009/8/1/focus/4428168&sec=focus
Quote “WE refer to “On another headhunt” (The Star, Aug 1). The article stated that Temasek Holdings’ investment funds “come from Singaporeans”, and “the nation’s reserves”.
We wish to clarify that Temasek Holdings is an investment company wholly owned by the Singapore government. We manage our portfolio and assets as an owner, and pay taxes to the Singapore government as well as to other governments where we have investments and operations.
We are not a fund manager, and do not manage the foreign exchange reserves of Singapore, nor the pension funds of Singaporeans. From our investment returns, we distribute dividends to our shareholders.
Temasek invests according to its funding capacity. Our investments are primarily funded from our investment returns including dividends and proceeds from divestments. We also tap on commercial borrowings, and the capital markets.
Our operations and investment activities do not “result in higher tax bills” for Singaporeans, as wrongly suggested in the article. Our cash flow and low gearing give us a wide range of capital raising options.
As spelt out in a recent public speech, the introduction of co-investors, if it should materialise, is meant to broaden the base of Temasek’s stakeholders, “for discipline and performance in the decades ahead”.
This is in line with our goal of building an institution that is committed to delivering sustainable long-term value, both to our shareholder, and to the wider community in Asia.
As a long-term investor, we are meticulous about governance, investment and people decisions.
We are open to non-Singaporeans for our board as well as for CEO or other management positions.
Our CEO succession review is part of our board governance and discipline where we review succession options every year. This process was put in place by our current CEO with the support of our board, and continues regardless of whoever the CEO is.
Myrna Thomas,
Managing Director, Corporate Affairs, Temasek Holdings.” Unquote
Quote ” Friday August 7, 2009
Temasek clarifies its position
The Star Online
WE refer to “On another headhunt” (The Star, Aug 1). The article stated that Temasek Holdings’ investment funds “come from Singaporeans”, and “the nation’s reserves”.
We wish to clarify that Temasek Holdings is an investment company wholly owned by the Singapore government. We manage our portfolio and assets as an owner, and pay taxes to the Singapore government as well as to other governments where we have investments and operations.
We are not a fund manager, and do not manage the foreign exchange reserves of Singapore, nor the pension funds of Singaporeans. From our investment returns, we distribute dividends to our shareholders.
Temasek invests according to its funding capacity. Our investments are primarily funded from our investment returns including dividends and proceeds from divestments. We also tap on commercial borrowings, and the capital markets.
Our operations and investment activities do not “result in higher tax bills” for Singaporeans, as wrongly suggested in the article. Our cash flow and low gearing give us a wide range of capital raising options.
As spelt out in a recent public speech, the introduction of co-investors, if it should materialise, is meant to broaden the base of Temasek’s stakeholders, “for discipline and performance in the decades ahead”.
This is in line with our goal of building an institution that is committed to delivering sustainable long-term value, both to our shareholder, and to the wider community in Asia.
As a long-term investor, we are meticulous about governance, investment and people decisions.
We are open to non-Singaporeans for our board as well as for CEO or other management positions.
Our CEO succession review is part of our board governance and discipline where we review succession options every year. This process was put in place by our current CEO with the support of our board, and continues regardless of whoever the CEO is.
Myrna Thomas,
Managing Director, Corporate Affairs, Temasek Holdings.” Unquote
“We are not a fund manager, and do not manage the foreign exchange reserves of Singapore, nor the pension funds of Singaporeans.”
Myrna Thomas,
who are you trying to kid ?
Of course you and TH don’t manage the funds, TH just use the fund approved and give by another board that manage the fund of Singaporean.
Just because TH just a third party middleman doesn’t mean it don’t use state’s fund. It just get those fund indirectly rather than directly. Trying to play another ShinCorpse punk ?
So please cut the bullshit.