By S Y Lee and Leong Sze Hian

We now know exactly where the $5 billion injection into Temasek Holdings came from, if we were to read the various media reports on the sources of the $5 billion capital injection from the Government into Temasek Holdings.

Temasek Holdings had disclosed on Tuesday that it received a $5 billion capital injection from the Ministry of Finance (MOF) during its latest financial year ended March 31. It is also shared that in the past 10 years, the Government has injected capital into Temasek a few more times.

The Ministry, which is Temasek Holdings’ sole shareholder, said that the capital injection did not include proceeds from the Special Singapore Government Securities (SSGS), which are instruments that the Central Provident Fund (CPF) Board uses to invest Singaporeans’ CPF savings.

According to a spokesperson from MOF, it is said that Temasek Holdings does not manage any CPF monies.

It is understood that this is the first time that we have disclosure as to where exactly the capital injection into Temasek Holdings came from.

But if this is the case – why?

Transparency sometimes only?

So in the past 10 years, the Government has injected capital into Temasek Holdings a few times. In Temasek Holdings’ 2007-2008 financial year, the MOF pumped $10 billion into the company and in 2011, the Government put in a further undisclosed amount to fund the joint venture between Temasek and Malaysian state investment firm Khazanah Nasional.

Why is it that we have partial transparency? At times, we have announcements that state the sum of the capital injections made by the government, while at other times this figure is not stated.

Also, did any of the capital injections from the past say exactly where the money came from? The latest clarification by MOF stated that the $5 billion injection did not come from proceeds of the SSGS, proceeds from government land sales in Singapore, government budget surpluses, and proceeds from SGS? Do we get this clarification only because there is renewed public interest in CPF funds?

In addition, how do we know for sure that Temasek Holdings’ capital injections before the Government of Singapore Investment Corporation (GIC) was  formed, never did come from CPF funds since Temasek Holdings started about 7 years before the GIC was formed?

CPF funds were first co-mingled with the rest of Government’s funds?

According to Finance Minister Tharman Shanmugaratnam, the Government pools the proceeds from SSGS issuance with the rest of the Government’s funds, such as proceeds from the tradable Singapore Government Securities (SGS), any government surpluses as well as the proceeds from land sales.

He said that the commingled funds are first deposited with the Monetary Authority of Singapore MAS as Government deposits. MAS converts these funds into foreign assets through the foreign exchange market. However, a major portion of these assets are of a longer term nature, and are hence transferred over to be managed by GIC.

More than $35b injections into Temasek – You sure none from CPF funds?

Although the reports state that the SSGS proceeds are not passed to Temasek Holdings for management and it manages its own assets which do not contain any CPF monies, Temasek Holdings pools its assets with the rest of the Government’s funds. So, how do we know for sure, especially in the early years, as to whether the Government’s injections into Temasek Holdings do include CPF funds?  To date, a total of $35 billion plus an undisclosed sum in 2011 were pumped into the investment vessel.

And finally, why did it take 49 years for Singaporeans to be told exactly where their CPF funds have gone to, and was managed by whom?

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