Thursday, 28 September 2023

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$1 billion in town council funds : what’re they used for?

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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