The Temasek debacle and the failure of one-party rule
August 5th, 2009 | 
Author: From our Correspondent
The abrupt departure of Temasek CEO-designate Chip Goodyear and the re-appointment of Ho Ching as taken many Singaporeans by surprise.
Though there were some rumblings of bewilderment and discontent on the ground, nobody dares to question the decision of the Temasek Board.
The Ministry of Finance, which was nominally in charge of Temasek, was quick to distance itself from the about-turn in the senior leadership.
So who is really in charge of Temasek Holdings? In a public-listed company, the Board of Directors and major shareholders will have a say in the appointment of the CEO, not in Temasek where the stakeholders were conspicuous by their silence.
Under Ho Ching’s leadership, Temasek lost more than S$40 billion dollars of its portfolio. This is completely unacceptable and indefensible. In Hong Kong, a public inquiry will be called to investigate the entire board, but not in Singapore where the chief culprits for the loss are allowed to retain their positions, salaries and perks at the expense of taxpayers.
The ongoing Temasek debacle is a damning indictment of the inability of a one-party state to check on itself. Without an effective opposition in the Parliament to hold it accountable to the people, the ruling party has no political pressure to investigate the fracas.
Singapore has always prided itself on a fair and competitive system of meritocracy to place the most competent and capable people in the positions of leadership from the ministers, MPs, senior civil servants and CEOs of statutory board.
Since Temasek is funded entirely by taxpayers’ monies, it can be considered as a sort of government institution in spite of relentless efforts to protray itself as an “Asian investment company”.
Is Ho Ching the most suitable candidate for the job? Are there no better candidates to lead Temasek? Should she be called to explain her decisions behind the multi-billion investments in Merill Lynch and Barcalys?
It appears it is difficult, if not impossible for the Prime Minister to launch a public commission to investigate his own wife. At the very least, Ho Ching should offer to step down and pass the baton to another person.
The current PR gimmick by Temasek to salvage its battered reputation in the eyes of Singaporeans by mooting the possibility of allowing retail investors to co-invest with it in future is a tacit acknowledgement of public disgruntlement against its largely opaque style of management.
In short, Temasek has fared pretty badly on the standard KPIs of competency, accountability and transparency.
Citing the global financial turmoil as a reason for its poor performacne is both lame and unjustified since there are SWFs who has raked in record profits during the same period of fund such as the East Timor Petroleum Fund.
The entire Temasek Board should be held accountable for the disastrous losses we suffered and resign en masse to assauge public fury. Lastly, it is time to open the account books and give a breakdown of the exact losses instead of quoting vague figures out of thin air. Anything less than that will be unacceptable.
As public servants, both the Temasek Board and the Ministry of Finance are expected to be subjected to public scrutiny. The continuous passing of the “hot potato” from one side to another is making a mockery out of our public institutions. The buck has to stop somewhere.
Related articles:
>> The untimely departure of Chip Goodyear by Bhaskaran K
>> How much did Chip’s stint at Temasek cost taxpayers? by Eugene Yeo
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Posted in Opinion
21 Responses to “The Temasek debacle and the failure of one-party rule”
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i think they ought to at the minimum explain why they don’t want to explain the reasons for his departure.
[...] GIC, Temasek State Fund Investments: Guess Ho’s baaaaack.. – The Temasek Review: The Temasek debacle and the failure of one-party rule [...]
So what are you going to do about it???
The one-party rule in Singapore is perfect for Singaporeans because most of them don’t care already. Their priority is to emigrate if they can afford or if they can’t they are busy struggling. Where got time to think about tamasek. Only people who are very free and have nothing to do are bothered by this issue. ..these people number 1000-2000 out of our population of 4M…99.99% of the people don’t care so don’t waste your time writing articles, go get a good job, earn lots of money and get out of this country.
if we can’t beat them, join them. i mean we can send someone as a spy / under-cover to work in Temasek, and try to collect and leak some juicy info out, in order to improve the transparency
I didn’t know Temasek lost money. I thought they only had “negative wealth added” (to quote Ho Ching).
Dear Singaporeans,
Who should we really blame for this sad state of affairs we call Temasek & GIC? The singaporeans who continue to vote for Golden years, first class politicians, long term vision of the ruling family, HDB upgrades, inbred elitism …
We gave them the mandate, gave up our rights to questions, gave in to the bullying anf thuggish attitude of the Lee Family and their running dogs called scholars or civil servant wannabes.
The only way t get some form of accoutnability is to vote in a credile opposition be it CSJ or S Low or Low TK or K Jeyaratnam. Regardless of who you prefer from the oposition camp, any pro PAP compliant idiot will not care about the citizens and their rights or situation.
Keep this in your memory in the next elections.
They
Evaporate
My
Assets
Secretly then
Earn
Kudos
What I agree
1. Yes, Temasek and GIC are simply taking for granted that they need not explain (losses and Goodyear) they do this at their own peril, the next generation of singaporeans (locally born or not) will challenge their activities since they are tax funded. They can do it this time and the maybe the next, but it will not be sustainable.
But we need to pressure (not force) transparency on them, if we do not, it is our fault and not theirs.
2. Correct, the economic turmoil is a major component in their losses. Clearly some serious wrong analysis and finally decison making were made to incurr these losses.
But the same decision making bodies also made a lot of money, for a very long period of time, so my point is that we cannot pass judgement on them simply for 2 or 3 major losses. Where were our praises when they were making for us?
What I disagree –
1. Resignation to take responsibilities – this works in some situations but when it comes to governmental issues, it may encourge a culture of “scare to take responsibilities”
Resignation enmass – it will appease general public for a while, but it will not fundamentally solve the problem. usually, the same person that makes the mistake will be the best person to correct and change course….the same person would know what and why it went wrong and most importantly, accumulate experience in the future.
My point is simple, If Ho Ching was the one that screwed up in this turbulent times, come the next financial crises (and it will certainly come) – even the new head of Temasek will approach to ask ” what went wrong the last time? what would u have done differently” – who else besides Ho Ching could answer these 2 critical questions?
sgcynic,
LOSE BILLIONS n “NEGATIVE WEALTH” = LPPL
to Sheng, agree with your comments, citizens deserve what they get with a one-party state.
Let’s hope lesser mortals vote in 10 or more opposition,
20 will be incredible, anything more means heaven sent !
However I caution against a freak elections result because the biggest Chimp said he will send in the army. Then George Yeo and blowjob artist Kishore will claim only the PAP’s military rule can hold the country together.
@ 坡仔哥哥 on Wed, 5th Aug 2009 2:36 pm …Greetings….
…….But the same decision making bodies also made a lot of money, for a very long period of time, so my point is that we cannot pass judgement on them simply for 2 or 3 major losses. Where were our praises when they were making for us? …………
With all due respect to your comment, I have to disagree because it is FLAWED OF SUBSTANCE. I don’t know when TH was formed and how much was pumped in by MOF in the years to 2008 when the value of investment was closed to US$185 billion. This value would have to included accumulated capital growth and dividend received reinvested. Is this impressive performance worthy of singing praises? Yes and No – probably more NO. Why??? Very simple.
The US economy as humming along post Oct 1987 crash but all that economic CHANGED WHEN BILL CLINTON came in as US 42th President. The US experienced an UNPRECEDENTED 15 YEARS OF UNINTERRUPTED ECONOMIC BOOM when historically the boom cycle rarely get past 8 years. That was the BIGGEST BOOM FACTOR which fired up the housing bubble across the globe. In this sort of economic environment, every fund manager except the MORONIC AND THE ABSOLUTE BLIND WOULD NOT ACHIEVED A SUBSTANTIALLY HIGHER RATE OF RETURN GREATER THAN THE LONG TERM RATE OF EQUITIES on an annual basis plus the added impact of compounding from REINVESTMENT OF DIVIDEND.
In such favourable economic fundamental of NO HISTORICAL PARALLEL, TH would be no exception to “perform.” The real test of fund management, is when the market hit crisis. In the parlance of Warren Buffet, some will be caught naked on the beach when the tide flows out. EXACTLY SPOT ON.
It is the same logic of management and political leadership – it is easy when the fundamentals are flowing well and smooth BUT WHEN CRISIS HIT, non-performer just self-destruct or disintegrated. Nixon completedly disintegrated in the challenge of Watergate Affairs and Bill Clinton fouled up his Congressional testimony that “I never had sex with that woman” He could have been hanged like Nixon for lying in Congressional testimony but for technical of law that oral sex is NOT THE DEFINITION OF SEXUAL INTERCOURSE interpreted in Clinton’s mind when he answered that question. If the questioned had been posed to Clinton – DID you received oral sex from Lewinsky and he denied it, the stained flock might have lead to Clinton’s conviction and impeachment from office like Nixon.
Remember – good times never tells abilities, it will always be “bad” times that separate the boys from the men. And in bad times, TH fumbled badly and there had been prior decisions lesser than appetizing BEFORE the financial meltdown. In other words, there were “failures” in decision-making even before the meltdown which you must agree is a fact.
It is also a test of performance in hard times. In the last 4 months from market low of March 2009, global market has recovered by 30% to 50%. Did TH achieved this recovery in the last financial statement to June?? Based on the $125 billion at its March bottom, TH should have a portfolio closer to US$165 billion by June 2009 – assuming a 30% recovery factor. And if it is a 50% recovery factor, TH should have US$187.5 billion by now -WIPING OUT ALL ITS LOSSES.
Did that happened??? No evidence of that achievement in recent comments from TH sources to the MSM.
And my own research shows mining and investment stocks of the top 100 blue-chip mining stock showed gains of 80% to 400%. Had TH invested in some of these, its portfolio could have easily grow over US$200 billion effortlessly.
Did they missed golden opportunity that comes once only in a lifetime of fund managers like this one????????
I also disagree with you on your argument that HC is the best person to turnaround the situation (with all due respect to HC), the realities of crisis management is that the manager in as crisis situation MUST RE-ENGINEER HIS OR HER LINE OF THOUGHTS TO CHANGE THE SITUATION . If you retain the same thinking that led you to disaster, keeping the same mindset LOCKS YOU EXACLTY IN CRISIS AGAIN WHICH FEEDS ON ITSELF IN PERPETUITY. How can you save yourself in a crisis situation if the leadership mindset does not change or the leader changed to change the leadership mindset??? I am puzzled. You can try convincing me in your return post.
And would HC be the best person to judge in hindsight of what went wrong prior and what could have been done?? ABSOLUTELY NOT IS MY ARGUMENT. Why??? Why do failing marriages needs counselling?? THE THIRD PERSON ALWAYS SEE THE SITUATION DETACHED BETTER THAN THOSE WHOSE EMOTION AND JUDGEMENT IS TRAPPED IN BY THE COMPLEXITIES OF EMOTION IN THE CRISIS. That is the reality for you and me as well. That is why Richard Nixon and Bill Clinton failed. And that is why Joh F. Kennedy, just 6 hours away from possible nuclear holocaust with Soviets in 1962 Cuban crisis when all those gun-linger US generals were baiting for air, navy and ground attack on Cuba.
History proves realities and facts, do you disagree??
In the Cuban crisis, those emotions driven generals fed with Pentagon satellite picture of Soviet missile being unpacked in Cuba ready for installation had ‘EXAGGERATED FEARS OF AMMEGGEDON” in their mind. So they think, we will bomb and attack Cuba back into the stone age but Kennedy, though very young of his age for experience, DECIDED “NO” and pulled back its naval blockage allowing the Soviet leadership precious minutes and hours to think of the consequence of a all-out nuclear exchange. THE SOVIET BELLIGERENCE COLLAPSED ON ITS OWN MOMENTUM. This is leadership tested and succeed in crisis.
lIKEWISE, in investment, WHAT IS LOST IN MELTDOWN CRISIS IS PAINFUL AND HISTORICAL, but the MELTDOWN ALSO GIVE UP UNPRECEDENT OPPORTUNITY OF NO PARALLEL to win back all your losses and REAP YOU EVEN MORE because everything is now INCREDIBLY CHEAP AND THEREFORE HAS THE LOGARITHMITIC EFFECT OF MULTIPLE FOLD GAINS FROM SMALL INVESTMENT.
And if you performed in CRISIS OF OPPORTUNITY, SPECTACULAR RESULTS WILL ACCRUE RIGHT BEFORE YOUR EYES EVEN BLINKED. And that was what exactly happened in resources mining sector – so many stocks ran up 250% to 400% in just under 3 months – SIMPLY MINDBOGGLING STUFF. Even the least informed lay investors are making phenomenal amount of money – what happened to the world’s fund managers???????
Single point of failure ?
All together now : “TA – MA – SICK”
My Malaysian friends were asking my how come Ho Ching already announced her resignation but yet can continue as CEO ?
She so thick-skin meh ? Caused so much losses and still have the face to continue ?
LHL & LKY not shameful meh ? To allow such an incompetent wife / daughter-in-law to be in charge and yet caused such massive losses ?
Any decent CEO would have taken the honourable to step down as CEO in view of the massive losses !
didn’t know HC lost monies?
She said it herself with the word “realised” loses.
Wonder why people still support her.
She must reveal all this before Goodyear speaks to minimise damage.
For those who don’t think this whole episode is a failure, I don’t know what is.
You heard of “From a jack to a KING”! There in TH it was be ED as CAN’T be MD due to conflict of interest when hubby was DPM as well as Finance Minister or FM. The after become ED, MOST QUIETLY and MYSTERIOUSLY BECOME CEO!!!???!!!???!!!???.
I JUST LOVE TO KEEP TELLING THIS STOLLY HERE. Esp. when WP IS now call TTR!!! Wah Lau!!! If CAN like that what else ccannot be lah??? And how you can trust such people who praised, said these things and THEN DO ANOTHER THING IN QUIETLY???!!!???!!!????!!!
AIYO – Putt-Toh-Tia liao (stomach ache).
Modesty, shame and contrite.
These words are not in the dictionary of the Lee family.
Remember, how GCT described the Lees – they are an ‘exceptional’ family.
His brand of ‘black’ humour, one must supposed.
It is really not such a difficult problem to solve. I offer a 3 step rehab for both Temasek and GIC:
1. Fire (resignation would be too kind) all responsible people (including Ho Ching) for the debacles.
2. Audit both agencies to the satisfaction of the taxpayers. It’s OUR money!! And we don’t like surprises.
3. Liquidate all assets OVER TIME and return the money to the People. When done, shut down the agencies. The existence of Temasek and GIC is proof that the People have been over-taxed.
Didn’t I post the following comment (quoted from above @Fairplayplease on Wed, 5th Aug 2009 9:33 pm and
@ 坡仔哥哥 on Wed, 5th Aug 2009 2:36 pm …Greetings….
)
….
…It is also a test of performance in hard times. In the last 4 months from market low of March 2009, global market has recovered by 30% to 50%. Did TH achieved this recovery in the last financial statement to June?? Based on the $125 billion at its March bottom, TH should have a portfolio closer to US$165 billion by June 2009 – assuming a 30% recovery factor. And if it is a 50% recovery factor, TH should have US$187.5 billion by now -WIPING OUT ALL ITS LOSSES.
Did that happened??? No evidence of that achievement in recent comments from TH sources to the MSM.
And my own research shows mining and investment stocks of the top 100 blue-chip mining stock showed gains of 80% to 400%. Had TH invested in some of these, its portfolio could have easily grow over US$200 billion effortlessly.
Did they missed golden opportunity that comes once only in a lifetime of fund managers like this one????????
AND TH AS NOW REPORTED in
http://singaporeenquirer.sg/?p=4324
as having slightly US$160 bln..
As I said in one of my (above) post, TH SHOULD HAVE maybe US$165 billion after the GLOBAL MARKET REBOUND over the last 4 months. I was guessing only AND IT IS CORRECT.
NOTHING TO CROW ABOUT OF PERFORMANCE – market forces. Had TC invested in the top 100 mining stocks in the last 4 months, their portfolio would be over US$200 bln or maybe beyond US$250 billion by now.
NOW THIS IS CALLED PERFORMANCE, not luck in the market!!
TOP QUALITY FUND MANAGER OR MANAGEMENT IS PROVEN ONLY IN TIMES OF CRISIS
Was I wrong?????? Anyone disagreeing???
I wrote this caption below in another thread..
The Temasek debacle and the failure of one-party rule …
at this location
Fairplayplease on Wed, 5th Aug 2009 9:33 pm
@ 坡仔哥哥 on Wed, 5th Aug 2009 2:36 pm …Greetings….
In the last 4 months from market low of March 2009, global market has recovered by 30% to 50%. Did TH achieved this recovery in the last financial statement to June?? Based on the $125 billion at its March bottom, TH should have a portfolio closer to US$165 billion by June 2009 – assuming a 30% recovery factor. And if it is a 50% recovery factor, TH should have US$187.5 billion by now -WIPING OUT ALL ITS LOSSES.
Did that happened??? No evidence of that achievement in recent comments from TH sources to the MSM.
And my own research shows mining and investment stocks of the top 100 blue-chip mining stock showed gains of 80% to 400%. Had TH invested in some of these, its portfolio could have easily grow over US$200 billion effortlessly.
SO NO BIG DEAL!!!! MSM sleeping????