Andrew Loh

Investment bank Lehman Brothers filed for bankruptcy on 15 September 2008. (Guardian, BBC, CNBC)

For the next two months, our town councils kept silent on whether they were affected by the collapse of Lehman, even as investors gathered in their hundreds at Hong Lim Park to protest their losses in similar investments.

It wasn‘t until the 17 November Parliamentary sitting that Singaporeans were told of the town councils’ losses when Nominated Member Eunice Olsen queried the minister on it. Senior Minister of State for National Development, Grace Fu, revealed that $16m had been invested by the PAP town councils in the failed structured products. Interestingly, none of the PAP or opposition MPs asked any further questions about the issue in Parliament.

Ms Fu said, “Are the town councils aware of the risks? I think that is the answer that we should ask the town councils and it is for each of the residents to pose that question to their town council.”

3 months and no answers

And so began a series of events which saw Singaporeans writing to the local press and emailing their MPs directly to do exactly that. They asked for more information and details about these investments – but have been met with a stonewall of silence, except for a few miserable crumbs of information given by a few MPs which do not answer the questions residents have.

It’s now almost three months after Lehman filed for bankruptcy. And the latest that Singaporeans are told by their MPs is to look out for the next issue of the town councils’ newsletters which will provide information about their investments.

Town councils’ newsletters are published and delivered to homes quarterly, or every three months. The next issue should be available in January 2009. (I stand corrected on this but so far, that’s what I know. Perhaps each town council has different schedules.) Whatever it is, Singaporeans are asked again to wait.

Originally, residents were told to avail themselves of the TCs’ annual reports; now, they are told to wait for the next issue of the newsletters; and SMOS Grace Fu talks about a new grading system for town councils – all without answering the questions which Singaporeans are asking about – how much has actually been lost and how much money are invested in structured products or other risky investments.

According to a Straits Times report on 11 December 2008, two of the town councils affected by the structured products “are giving their residents a more detailed explanation of their investments” through a “circular”. Holland Bukit-Panjang town council intends to send this ‘circular… to every one of its 53,000 households today.”

One wonders why it has taken more than three months for the town councils to respond in such a manner and one also wonders what the other town councils plan to do to explain more fully to their residents.

TOC would like to ask all our readers to send us a copy of your town council’s next newsletter when it finally reaches you. Email it to us at: [email protected] .

For now, we keep tab of the series of events which have taken place so far and “admire” PAP MPs and ministers’ display of the art of passing the buck.

Minister passes to town councils. Town councils’ co-ordinating chairman defends town councils. Town councils ask residents to read their annual reports. Town councils then change their minds and ask residents to read the next issue of their newsletters. SMOS Grace Fu then comes up with a smokescreen of having a “report card” for town councils in future.

Nothing in all that they have said have answered Singaporeans’ questions.

One is reminded of almost the same tactic employed in the Mas Selamat Kastari escape aftermath where the buck kept being passed around until finally, those who should have been held accountable never were.

A missing PM and a woeful lack of accountability

A point to note: PM Lee, who has been so fond of criticising opposition parties’ MPs for any shortcomings, has been totally silent on this issue of PAP town councils’ investments – even after three months.

This woeful lack of accountability and transparency, and not to mention responsibility, is characteristic of a Government and a party which have become too arrogant. But more importantly, it is a danger for a country which puts so much stock in its finances and economy to just sweep such failures under the carpet.

Citizens must continue to demand answers and accountability.

The most important questions are still unanswered:

One, how much money is invested in risky investments, besides structured products, by the individual town councils?

Two, what do the town councils affected by the Lehman Brothers’ collapse plan to do to recover the money? Or are they writing off the millions as ‘bad investments”?


The series of events so far:

15 September 2008: Lehman Brothers files for bankruptcy. (Guardian, BBC, CNBC)

17 November 2008: NMP Eunice Olsen asks about town councils’ investments in Parliament. “Are the town councils aware of the risks? I think that is the answer that we should ask the town councils and it is for each of the residents to pose that question to their town council.” – Grace Fu (Parliament report, transcripts)

18 November 2008: EIGHT town councils (TC) run by the People’s Action Party have about $16 million invested in troubled structured products. (Straits Times) (Govt revealed this only after NMP Eunice Olsen’s question in Parliament, two months after Lehman’s collapse.)

18 November 2008: Teo Ho Pin disclosed the two town councils’ investments. The lion’s share of $12 million is from two TCs: Holland-Bukit Panjang ($8 million) and Pasir Ris-Punggol ($4 million). (Straits Times)

19 November 2008: Dr Teo says ‘be thankful’. (Today).

23 November 2008: Town councils to explain. Mah Bow Tan says TCs “must be accountable to their residents for what they do with the money they collect from them” (Straits Times)

25 November 2008: TOC asks readers to send email to town councils. (TOC)

28 November 2008: Teo Ho Pin’s first letter to the Straits Times and Today.

5 December 2008: Teo Ho Pin’s second letter to the Straits Times. “Investment types, returns open to public”.

6 December 2008: Teo Ho Pin replies to Gilbert Goh’s letter. “Council funds ‘in a healthy state’” (Today)

6 December 2008: “Town councils get graded”. (Straits Times)

6 December 2008: Pasir Ris-Punggol town council chairman, Ahmad Magad, sends email reply to wrong recipient – revealing that there may have been an internal agreement not to disclose “anything further” about the town council’s investments. (TOC)

7 December 2008: Use of funds to be assessed. A REPORT card on how town councils are doing will be ready next year and it will assess how they run their estates and manage their finances. (Straits Times)

11 December: 2 PAP town councils to open up. Holland-Bukit Panjang Town Council will send a circular – in the four official languages – to every one of its 53,000 households today.Straits Times.


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