Tharman to Ngerng – GIC “pays no regards” to source of funds


“GIC knows it is managing government assets, that is the Government’s mandate for the GIC. The mandate is irrespective of the sources of funds it manages… and the GIC (hence) pays no regard to what the source of funds is.”

That was the response given by Deputy Prime Minister and Finance Minister, Tharman Shanmugaratnam, to a question by blogger Roy Ngerng at a forum organised by the Institute of Policy Studies (IPS) on Tuesday.

Mr Ngerng had asked about the role of the Government of Singapore Investment Corporation Pte Ltd – or GIC – in managing CPF funds.

Mr Ngerng said that the GIC had said on its website last month that the GIC “did not know if it was managing CPF monies.”

What the GIC website said specifically was that “how the funds from CPF monies flow into reserves which could then be managed by either MAS, GIC or Temasek, this is not made explicit to us.”

The explanation was the answer to the question, “Does GIC invest CPF monies?”, posted on the GIC’s Frequently Asked Questions (FAQ) page on its website.


The explanation seems to say that the GIC is unaware of the details of how CPF funds flow into the reserves, except through information from “public sources”.

This is puzzling, given that the Board of Directors of the GIC consists of several Government ministers – including Mr Tharman himself; DPM Teo Chee Hean; Mr Lim Hng Kiang, Minister of Trade and Industry; and Mr Heng Swee Keat, Minister of Education.

The Board is headed by Prime Minister Lee Hsien Loong as chairman.

And the Senior Adviser to the Board is former prime minister Lee Kuan Yew.


The answer to whether the GIC invest CPF monies was however, later changed to the following, after the controversy over the CPF emerged.

The new answer in fact explains how the CPF funds flow into the reserves which are then given to the GIC to manage:

GIC edited

So, in short, it would seem that the original answer given by the GIC was misleading, disavowing knowledge of how CPF funds flow into the reserves which are then given to the GIC to manage, even as Mr Tharman said on Tuesday that “the GIC pays no regards to what the source of funds is.”

But “paying no regard” is quite different from saying, essentially, that it did not know or was unaware of the source of funds.

Singaporeans would be concerned if the GIC, which Board consists of some of the most senior Government ministers, did not know how the CPF funds flowed into the reserves.

Surely, with the PM, and its two DPMs – one of whom is also the Finance Minister – on the Board, one would in fact expect that the GIC would know exactly how the funds flow into the reserves which are then given to the GIC to manage.

For if they did not know, then who would?

Another issue which the GIC and the Government might want to take another look at is how the GIC is accountable to the public.

Under its “Ensuring sound governance” page on its website, the GIC says [emphasis added]:

“The Government, which is represented by the Ministry of Finance in its dealings with GIC, neither directs nor interferes in the company’s investment decisions. It holds the GIC Board accountable for the overall portfolio performance.”


The obvious question one would ask is: The Prime Minister, who heads the Government, is also the one who heads the GIC Board as chairman, and his two deputies are also Board members of the GIC, along with two other ministers, and it has a former prime minister as Senior Adviser to the Board.

While the GIC accounts are audited every year by the Auditor General whose findings or report are submitted to the President, the question still remains – how does the Government take the Board of the GIC to account for its “overall portfolio performance” when the Board itself is also headed by senior leaders in Government?

Clarity on this will go some way in assuaging concerns about who are accountable to the public in how public funds are invested.