Another hollow and empty Charter by Temasek
From our Correspondent
State-owned sovereign wealth fund Temasek Holdings, which lost billions of dollars in failed overseas investments lately, has released an updated Charter that “reaffirms its role as a commercial investment company to create and deliver sustainable long-term returns for its stakeholders.”
Speaking at the launch on Tuesday, Temasek’s chairman S Dhanabalan said it was an opportune time to update the Charter which was first published in 2002 though that there is not much change in the Charter’s ideals and principles.
Before the Charter is even proclaimed, Temasek should ask itself the following questions:
1. The source of its funds.
2. Who its stakeholders are.
3. How is it going to assess its own performance.
It is both technically and morally wrong for Temasek to protray itself as a “commercial investment company” because it is not a private or public-listed company at all.
Since it is owned by the Ministry of Finance under the government of Singapore, Temasek Holdings is government-owned entity belonging to every citizen of Singapore.
Set up in 1974 originally to manage Singapore’s budget surpluses, it is not known the amount of money Temasek has received from the Finance Ministry over the years.
Being a sovereign-wealth fund, Temasek has to be accountable to its stakeholders, which is the people of Singapore.
In a public-listed company, all its accounts are released and sent to its shareholders. Its Board of Directors can be thrown out anytime during an AGM or EGM by shareholders who are unhappy with their performance.
The Temasek Board still remains in place despite losing billions of dollars of taxpayers’ monies and though Mr Tharman acknowledges that the abrupt departure of CEO-designate Chip Goodyear is a matter of “public interest”, he refuses to reveal the exact reasons as it doesn’t serve any “strategic purpose”.
Public-listed companies are judged by its performance, returns and dividends to investors. What benefit has Temasek given to Singaporeans after so many years of “growth”?
Either way, the present Charter of Temasek makes little sense at all. If it is indeed a commercial investment company, then it should adhere to the standard practice of public-listed companies based on the size of its fund.
If it is a government-owned entity, then it should be held accountable for its decisions and there must be full transparency in its transactions.
Based on Temasek’s bizzare behavior so far, it appears more like a personal family fund than a sovereign wealth or commercial investment fund.
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HoChing Rules on Wed, 26th Aug 2009 9:42 am
hi Admin,
I think the primary target audience of the new charter are the overseas regulators and financial investors. It seems to me that by drawing distance away from its sovereign link, Temasek thinks it will face less pressure and scrutiny from these regulators when they are making investments overseas.
I am not sure if that will work – It is wishful thinking that they can change people’s perception of Temasek as a SWF just by changing their charter. Are they trying to fool people or themselves?
On the other note, that Temasek has stated clearly under point 20 of the new charter (which says they have nothing to do with the Singapore Govt reserves), I feel that Temasek has just “dis-owned” the people of Singapore.
How sad this is.
VP on Wed, 26th Aug 2009 9:49 am
‘Based on Temasek’s bizzare behavior so far, it appears more like a personal family fund than a sovereign wealth or commercial investment fund.’
If family fund, then can they POCKET the money too?
then what happens to singapore money… who takes it?
HoChing Rules (forever) on Wed, 26th Aug 2009 10:12 am
TMSK is trying to slowly “wriggle out” of the fact that the assets under their management belongs to them as commercial entity (and not Singaporeans)…..given time (maybe 10,15,20 years), people will be “brain-washed” to accept this as a fact…..
I used to have a great deal of respect for Dhana, but I am slowly getting disillusioned by him.
The Singapore Daily » Blog Archive » Daily SG: 26 Aug 2009 on Wed, 26th Aug 2009 11:15 am
[...] GIC, Temasek State Fund Investments – TOC: Ministry of Finance replies to WSJ article – Blowin’ In The Wind: Temasek’s updated charter: What’s new, what’s missing – The Temasek Review: Another hollow and empty Charter by Temasek [...]
Kelvin on Wed, 26th Aug 2009 12:21 pm
Only one question – where did the seed fund come from?
cy on Wed, 26th Aug 2009 12:21 pm
换汤不换药
Ironic on Wed, 26th Aug 2009 3:21 pm
The thing is, the temasek funds does not belong to singaporeans legally. Ur CPF Contribution > CPF Board > Government Bonds (2-4% p.a) > Temasek.
Temasek belongs to the government, until we change this, we have no say in how the government decides to spend the fund.
Its like saying the money the US government is spending now, belongs to China and Japan, so they should have a say n the US have to be accountable to China or Japan when spending their money.
Government entity is only accountable to the government, if MOF says its ok, then its ok.
If u’re not happy, then do something to change the status quo, thats a constructive way to approach the problem. Simply insisting on ideas of “seed” money, shows a total disregard for the rule of law.
Fairplayplease on Wed, 26th Aug 2009 3:45 pm
@Ironic on Wed, 26th Aug 2009 3:21 pm …greeting…
Another slippery slope argument. How about this suggestion from me -
Use your palm and grab some “fresher” oxygen than the rest of us breath of the air and then breath-in and breath out – you might find it less energetically demanding to debate fruitfully on this forum.
That is if you can grab “fresher” oxygen than us. Otherwise, you can reasonably assume that most of the CPF money belongs to Singaporeans. Foreigners who leave before retirement date can take all out.
So PLEASE FORGET YOUR HOAX OF “FRESHER OXYGEN” HERE PLEASE
Rainnix on Wed, 26th Aug 2009 5:50 pm
To VP on Wed, 26th Aug 2009 9:49 am
“If family fund, then can they POCKET the money too?
then what happens to Singapore money… who takes it?”
Anyway everything is “untransparent” as Tharman said it and the media are not doing their job by doing investigative reporting.
rico on Thu, 27th Aug 2009 2:42 am
write all they want. furnish anything they want. no one is going to bother to read and believe in what’s written in the charter. it is not even enforceable by any law
Citizen on Thu, 27th Aug 2009 2:39 pm
WOW!! Seven yrs to come out with some hollow words!!
Ironic on Thu, 27th Aug 2009 3:14 pm
@Fairplayplease
I’m just trying to educate people here, the government is not listening because we do not have the power to make them listen. Was just giving it a shot anyways, doesn’t take a lot of energy for me.
CPF money belongs to Singaporeans, i never challenged this point.
Fairplayplease on Thu, 27th Aug 2009 8:47 pm
@Ironic on Thu, 27th Aug 2009 3:14 pm …greeting…
First up, my SINCERE APOLOGY to you, Ironic. I misread your INTENDED message import of your post even though I disagree with your thoughts. At the first glance, your post at initial read would appear that CPF money flowed into TH and once it is in TH, the accountability is to MOF, not individuals whose CPF savings were channelled into that direction. In other words the accountability to individual account owners of CPF savings “evaporated” whilst my contrary posting is that individual accounts holder’s rights to his/her savings are inviolable and must be paid on demand at retirement age.
Your post of protest did clarified your position on that stance. It is appreciated.
However, there is SOMETHING else which is of my relevant mind thoughts and consideration in relation to funds under TH’s management.
As of legal construct now, TH is an entity of Ministry of Finance ( MOF)
…”Temasek belongs to the government, until we change this, we have no say in how the government decides to spend the fund…..” and extrapolating here….(in your words) “Simply insisting on ideas of “seed” money, shows a total disregard for the rule of law….”
I have a COMPLELLING ISSUE here – who is the “BENEFICIAL INTERESTS” the beneficial rightful owners of these assets under management in TH? The legal construct is of course, MOF. But who is MOF – it is a LEGAL ABSTRACT NON-NATURAL PERSON AT LAW. Can a non-natural “person” in a legal construct or Abstract like MOF take out the money, spend on itself – be it feeding its hunger, clothings, shelter, vacation, medical expenses like a natural person in need do?? DEFINITELY NOT.
So the final construct at law ( you might dispute with me here rigorously if you like) is that when Parliament enacted law for funds to be invested by TH, it is the reasonable construct that the LEGISLATIVE INTENT AT LAW is that its beneficial outcome must accrues to natural persons – that is to say Singaporean citizens. Otherwise, MOF legal “ownership” of those billions invested is simply a “banking account” of perpetuity beyond generations as long as the nation of Singapore survive as a sovereign. Ironic, you and I will never in our life time touch, see or access any of the money unless and until MOF decided to release any part of it and pays it as dividends to Singaporeans. I believe, the so-called Growth Dividend comes from there. And if that is so, then one must reasonably conclude that the final ‘BENEFICIARY INTERESTS” (as opposed to legal interest of MOF) is Singaporean citizens. The legal owner, MOF, hold those funds and assets invested IN TRUST OF AND FOR THE BENEFITS of the final beneficiary interests defined as Singapore citizen.
It then raise the next question about law changes for clarity of interest in your post. As of now, MOF owns TH, no matter what went wrong or whatever the beneficial interests disagree with the conduct of affairs inside TH for whatever reasons howsoever arise, we cannot do anything as long as MOF says it is ok or took a blind eye to our protest. The reason is that MOF is owner – not us, Singaporeans.
The situation would be very different IF TH IS A LEGALLY INCORPORATED LIKE A PUBLICLY LISTED COMPANIES AND WE SINGAPOREAN CITIZENS OWNS SHARES in TH. In that case, we do away with MOF because we are the beneficial interest and also the shareholders.
If we are shareholders like in publicly listed companies, the rules of derivative actions in the case law precedent of 1843 landmark corporate law, popularly known as the Foss v Harbottle rule apply.
Derivative actions were constrained by the rule in Foss v. Harbottle (1843), 2 Hare 461; 67 E.R. 189 (Ch.D.) . Two minority shareholders attacked the sale of properties to the
company at inflated values by various directors. The directors also made unauthorized dispositions of corporate lands to secure financing. It was held that the two minority
shareholders were not proper plaintiffs since, if the directors had engaged in unauthorized contract, it was a breach of their duty to the company and not a breach of a duty to the minority shareholders. If suit was to be brought it was a matter to be decided by the company at a general meeting – by the majority.
In other words:
(i) The plaintiffs could not sue personally.
(ii) The company had to sue.
Notes on Business Associations 397
© Mark Gillen
(iii) Whether the company would sue, in the event that the directors could not,
was to be decided by the majority of shareholders at the company meeting.
http://www.law.uvic.ca/mgillen/315/documents/Ch26-ShRemB.pdf
Likewise, to present set-up, we Singaporeans as “beneficial interests” cannot PERSONALLY intervenes in the management and affairs of TH no matter how unhappy we are – legitimate or otherwise at law.
But if TH is an incorporated entity, we the shareholders PERSONALLY cannot sue but if 75% of all shareholders agree and hold a extra-ordinary shareholder’s meeting, we could, theoretically oust the directors and replace its boards and management given the derivative actions law in Foss v Harbottle I believe.
The IMPLICATIONS ARE BIG. If we are shareholders of TH directly, we could withdraw our shares of those assets and use it in whatever way we want. And if we are shareholders, we can pull out our investments WITHOUT HAVING TO SHARE WITH NEW ARRIVALS WHO TAKE UP CITIZENSHIP, CONTRIBUTE NOTHING AND WANTS PART OF THE MONEY WHICH OTHERWISE EXCLUSIVELY BELONG TO NATIVE SINGAPOREANS.
IT IS UNFAIR TO US TO FORCE US TO SHARE WITH OTHERS WHO CONTRIBUTE NOTHING OF RISKS AND CAPITAL INFUSION IN THE LAST 44 YEARS.
WE MIGHT ALSO TAKE OUT THAT MONEY AND INVEST IN ANOTHER SUCCESSFUL BUSINESS ANYWHERE IN THE WORLD OR GIVE IT TO A CHARITY FOR CANCER RESEARCH INSTEAD OF LEAVING IT TO UNKNOWN PERSON OR PERSONS 5 TO 10 GENERATIONS FROM NOW.
It is your money and my money, Parliament shoud debate this and give it back to us SINCE THERE ARE A LOT OF NEW MIGRANTS COMING TO REAP THE GAIN AND NOT TAKING RESPONSIBILITY FOR DEFENDING THIS NATION.
Fairplayplease on Thu, 27th Aug 2009 9:05 pm
Parliament should amend the charter and incorporate TH like a publicly-listed entity for the protection of legal interest of final ” beneficiary interests” comprising of all Singaporeans.
But will they?? I don’t think so. They want secrecy of total investable funds by GIC and TH.
The secrecy obsession in my view is misplaced, misguided and suspicious of pretensions. Surely Norway’s sovereign funds are not secretive of their investable funds anymore than Timor Leste, possibly?? Secrecy of state affairs – not related to national security is a much-abused political lightning strike in too many jurisdiction. You see that clearly now in China’s handling of the arrest and detention of Stern Hu on alleged spying of China’s state “secrets”. IT IS PUPPYCOCK of a hoax – this one if you scratch a little beneath the surface. China claimed that it lost over US$100 billions over the years to Australian mining business because of secrets have been compromised by spying in iron-ore negotiations.
How can that be true, WHEN THE REALITY IS THAT CHINA BUY IRON ORE ON NEARLY THE SAME PRICE (adjusted for shipping costs differentials) FROM BRAZIL AND IT IS THE SAME FOR KOREA AND JAPAN.
Did Australian negotiators spied for Korea and Japan and also spied against Brazil’s national interest in iron ore pricing to China?? Australian negotiator’s DO NOT visit Brazil to spy on this competitor to decide on what price they sell to China for its iron ore.
A load of bullshit. But it is a load of bull to be available of convenient use as an advantage justifying ground and excuse to block decisions advantages to all relevant “beneficial interests” constitutents.
It happens everywhere.This is the pain the ar@se.
Fairplayplease on Thu, 27th Aug 2009 10:40 pm
@Ironic on Thu, 27th Aug 2009 3:14 pm ..GREETINGS..
Money invested in TH and GIC should also ONLY BELONGS TO SINGAPOREAN CITIZENS, do you agree with this point too? And that being so, we should have the option of pulling out our fair share anytime as well?
Fairplayplease on Thu, 27th Aug 2009 10:40 pm
@Ironic on Thu, 27th Aug 2009 3:14 pm ..GREETINGS..
Money invested in TH and GIC should also ONLY BELONGS TO SINGAPOREAN CITIZENS, do you agree with this point too? And that being so, we should have the option of pulling out our fair share anytime as well?