Edit: It was later announced that there was a filing error with the SEC – Temasek only divested 5 million shares. But the paper loss of $10 billion still stands.
I read on Littlespeck.com that Temasek sold 50% of its holdings in Merrill Lynch at a nearly US$1.5 billion loss.
Including unrealized losses on its holdings in UBS, Citigroup and Barclays, it would mean a massive total of US$10 billion of Singaporean taxpayers’ money gone down the drain… in a couple of years or so.
That’s not including the loss of US$2 billion on its investment in Shin Corp, that eventually led to political chaos in Thailand as well.
While it may be true that Temasek and GIC may have made some prudent investments in the past, and that this paper loss may be regained in time to come (since MM Lee said these are long term investments)… I think these are too risky investments to put taxpayers’ money into.
US$12 billion amounts to about S$17 billion. Divided by 4.5 million citizens, we have about S$3,800 of loss per Singaporean. But that’s not the point really.
The point is, in times of economic uncertainty, instead of making use of a little bit of Singapore’s humongous reserves to ease lower-income Singaporeans’ hardships, the Government instead chose to let Temasek & GIC put billions of dollars into these poorly judged investments.
In a publicly-traded company, when executives make poor decisions that cost the company to suffer substantial losses, there would be pressure for those responsible to resign. Take for example Citibank’s previous chief executive who resigned prior to the announcement of losses amounting to around US$10 billion.
It’s not the same in the case of our sovereign wealth funds. In the same way that no senior officer was sacked over the systematic failures that led to Mas Selamat’s escape, nobody in Temasek or GIC is going to step down or be given the sack for losing billions of dollars of taxpayers’ money. So what if we have hundreds of billions of dollars to burn? At this rate, if the economy doesn’t recover any time soon, or in the worst case scenario where there is a worldwide recession and these banks collapse… ultimately it is the people’s money, and Singaporeans will suffer.
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the whole reason of paying government officials the equivalent of CEO salaries in private companies doesn’t have the same strings attached when it comes to performance. the veil that has been pulled over all singaporean eyes still stays to this very day.