Opinion
Singaporean blogger disputes GIC’s reported profits amidst contrary claims
Singaporean blogger Philip Ang challenges mainstream media portrayals of GIC’s positive performance in FY2023, suggesting potential losses may have been obscured. Ang cites concerns over GIC’s unique 20-year annualised real rate of return metric and questions the fund’s vulnerability amidst global financial turmoil.
SINGAPORE: In a recent revelation by Singaporean blogger, Philip Ang, claims have surfaced regarding Singapore’s sovereign wealth fund, GIC, suffering record losses in the fiscal year 2023.
This controversial statement juxtaposes the positive performance depicted in the mainstream media.
Mainstream Media vs. Blogger’s Perspective
While media outlets like Channel News Asia (CNA), Straits Times, and Mothership have reported positive performances by GIC in FY2023, Philip Ang suggests that such positive portrayals could be misleading.
- CNA reported, “GIC to grow infrastructure investments as 20-year annualised real return hits 8-year high.”
- Straits Times highlighted, “GIC posts resilient real returns above inflation rate.”
- Mothership mentioned, “GIC records annualised real return of 4.6%, its highest in 8 years.”
Ang raises concerns about the 20-year annualised real rate of return metric GIC uses.
“GIC uses the 20-year annualised real rate of return to measure its own performance. It’s the only fund manager/SWF in the universe to use such a metric.
The reason for this is simple; so long as GIC is profitable in most years, the mention of ‘loss’ in the media is avoided. To illustrate, if GIC makes consistent investment gains every year but is unprofitable in, say, 5 out of 20 years, on average it will still be making a profit.
Errr … why not increase the 20-year duration to, say, 25 or 30 years?”
He believes it can help mask losses and cited an example from FY2009 where GIC suffered a then-record loss of US41.6 billion but still reported a positive 20-year annualised rate of return of 4.4%.
Financial Movements in 2022
In 2022, significant transfers were made to GIC:
- S$75 billion was transferred from the Monetary Authority of Singapore (MAS) in April 2022.
- An earlier transfer of S$185 billion three months prior.
Ang noted that these investments, totalling over S$300 billion, were mostly in overvalued assets, making GIC vulnerable to losses.
Global Financial Scenario
Global markets faced turmoil in 2022:
- A series of 8 interest rate hikes from May 2022 to March 2023 by the US Federal Reserve, prompting other central banks to follow suit.
- Global stock and bond markets lost over US$30 trillion.
Ang estimated that with GIC being the 7th largest sovereign wealth fund globally, its share of this loss could be around US$69 billion, or approximately S$95 billion.
He pointed out that FY2023 was also a terrible year for GIC’s sister company Temasek with a shareholder return of -5.1%, its worst performance in 7 years and raised doubts over how GIC made ‘8-year high returns’ for the same period.
In contrast, Norway’s wealth fund @ The fund | Norges Bank Investment Management reported a loss of US$164 billion, suggesting transparency in their reporting, which Ang believes GIC lacks.
GIC’s Diverse Portfolio
GIC’s investment in various assets such as bonds, real estate, and private equities saw potential downturns:
- With rising bond rates, GIC’s significant bond holdings might have faced devaluation.
- Despite falling real estate prices in 2022, GIC invested a record US$20 billion in this sector.
Currency Fortunes
On the brighter side, the Singapore dollar strengthened against many global currencies in FY2023, which might have offset some of GIC’s losses.
Ang’s assertions provide a contrasting view to the mainstream media’s portrayal of GIC’s performance in FY2023.
According to him, while all asset classes faced the brunt of rising interest rates, with the media’s alleged complicity, GIC’s potential losses may have been cleverly hidden from public view.
Opinion
Iswaran unlikely to serve full 12-month sentence under conditional remission and possibly home detention
Former Transport Minister S Iswaran is unlikely to serve the full 12 months of his sentence. Under Singapore’s Conditional Remission System, he could leave prison after serving less than eight months, with the remainder of his sentence served under strict supervision, including home detention. While Iswaran is scheduled to surrender on 7 October 2024, there is a possibility of an appeal.
Former Transport Minister Iswaran was sentenced to 12 months in prison on 3 October 2024 for accepting valuable gifts while in public office and obstructing the course of justice.
The court granted Iswaran’s request to surrender himself at 4 p.m. on 7 October 2024 to begin his sentence. However, his lead lawyer, Davinder Singh, indicated that the start of the sentence could be delayed depending on “instructions,” hinting at the possibility of an appeal.
However, despite the 12-month sentence, it is highly likely that Iswaran will serve less time in prison due to Singapore’s Conditional Remission System (CRS) and potentially the Home Detention Scheme (HDS).
Under the CRS, prisoners in Singapore may be released early if they demonstrate good behaviour.
Typically, under the CRS, inmates are eligible for release after serving two-thirds of their sentence. In Iswaran’s case, this means he could be released after serving eight months in prison, with the remaining four months of his sentence subject to a Conditional Remission Order (CRO).
The CRO, a legal mechanism that enforces strict conditions post-release, requires compliance with several terms, such as reporting to authorities and avoiding any criminal activity. If Iswaran violates these conditions, he could face penalties, including being sent back to prison to serve the remainder of his sentence.
Alongside CRS, there is also the possibility that Iswaran could serve part of his sentence under the Home Detention Scheme (HDS), which allows prisoners to serve their final months under strict supervision at home.
Take the case of former Singapore Civil Defence Force (SCDF) Chief Peter Lim Sin Pang, for example.
Lim was sentenced to six months in prison in 2013 for corruption.
After serving three months in Changi Prison, he was supposedly placed on home detention for one month — if we consider how CRO grants him two months of remission — allowing him to complete his sentence under supervision.
Home detention meant that Lim would spend his remaining sentence at home under electronic monitoring, fitted with an electronic monitoring device, typically worn as an ankle bracelet, which allows authorities to track his location at all times.
Like other inmates under the HDS, his movements were tightly controlled, and he was allowed out only for specific activities, such as attending work, medical appointments, or rehabilitation programmes, during limited hours.
Any deviation from the permitted activities or failure to return home on time could lead to immediate consequences, including being returned to prison to complete the sentence.
Eligibility for home detention depends on various factors, such as the inmate’s behaviour during incarceration and the level of risk they pose to society.
This scheme aims to reintegrate prisoners into society while maintaining strict oversight.
If HDS is applicable, Iswaran might spend even less time behind bars, as he could transition to home detention before completing the full period under the CRS.
Opinion
Why the silence by Minister Shanmugam on his S$88 million property sale?
Despite being quick to rebut allegations, Minister K Shanmugam has remained silent on the S$88 million sale of his Good Class Bungalow (GCB) in August 2023. The lack of public commentary, especially given the potential conflict of interest with the Singapore Land Authority’s role, raises questions.
When it comes to addressing allegations, Minister for Home Affairs and Law, K Shanmugam, has shown he can respond swiftly and decisively, as seen in his and Dr Vivian Balakrishnan’s rapid legal actions against Mr Lee Hsien Yang (LHY) for defamation, as well as their recent rebuttal to LHY’s statement regarding the defamation costs paid to the two ministers.
However, the stark contrast in how Mr. Shanmugam has handled recent revelations about his own financial dealings, and his silence regarding the S$88 million sale of a Good Class Bungalow (GCB), is puzzling and raises concerns about transparency and potential conflicts of interest.
TOC had earlier disclosed that Mr Shanmugam sold his GCB at 6 Astrid Hill for a staggering S$88 million in August 2023.
The sale was to UBS Trustees (Singapore) Ltd, a transaction managed by legal professionals from his former law firm and concluded without any encumbrances like a mortgage. This deal turned a home bought for S$7.95 million into an S$88 million sale—garnering a massive profit.
This sale was made just a month after he made his ministerial statement explaining the circumstances of his leasing of the massive black-and-white bungalow estate at 26 Ridout Road from the Singapore Land Authority (SLA), a statutory board that he oversees as the Minister for Law.
This transaction, particularly the identity of the buyer and the approval process for such a high-value sale, is of public interest because GCBs are subject to stringent sale conditions.
They are generally only sold to Singaporeans or approved Permanent Residents who have made significant economic contributions to Singapore. The approval for such transactions typically comes from the SLA.
This raises an inherent question: Why has Mr Shanmugam not addressed the public regarding this substantial financial transaction, especially when such approvals could potentially involve his direct oversight? We have written to him for his comments but were met with silence.
We do not know who the actual beneficiaries of the property are, as it was sold to ‘The Jasmine Villa Settlement,’ a trust managed by UBS Trustees. The beneficiaries could be Singaporeans, foreigners, or a mix of both.
His silence is notable because it contrasts sharply with his and other ministers’ rapid responses to allegations made by LHY.
The potential conflict of interest in the sale of the minister’s GCB is similar to earlier concerns about his rental of a black-and-white property at 26 Ridout Road, which also involved the SLA from which he has said to have recused himself from decisions made. Notably, the government has also cleared him of any wrongdoing.
The lack of public commentary from Mr Shanmugam about the sale of his GCB, despite the potential need for SLA’s approval, and the silence from the mainstream media on this revelation, merit scrutiny.
The public deserves to know:
- Who was the buyer and, if the buyer is a non-Singaporean, who approved the sale to UBS Trustees and under what criteria? Especially since GCBs can only be sold to Singaporeans or Permanent Residents who have not only been resident in Singapore for over five years but have also made exceptional economic contributions—a criterion subject to the subjective approval of the authorities.
- Was there any conflict of interest given the minister’s role over the SLA? This is particularly pertinent given that the SLA, which falls under the purview of the Ministry of Law, would typically be involved in approving such transactions if the buyer does not meet the usual criteria. Moreover, given the huge sum involved in the transaction, extra scrutiny is warranted, especially as Mr. Shanmugam is a public servant holding significant power.
- Why has there been no public statement from Minister Shanmugam on this matter, especially given the rapid response to defamation accusations? His silence contrasts sharply with his prompt responses to other public issues, raising questions about consistency and transparency in handling personal financial dealings versus public allegations.
Minister Shanmugam’s transparency in this matter would reaffirm public trust and ensure that his actions as a minister do not conflict with his personal financial dealings.
His response, or lack thereof, will significantly influence public perception of his commitment to transparency and accountability in his official capacities.
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