Video interview with Singaporeans from three different constituencies on their views of Town Councils’ loss of sinking funds

Video interview with Singaporeans from three different constituencies on their views of Town Councils’ loss of sinking funds - Posted by wayangparty on November 23, 2008

Presented by the video production team, The Singapore Enquirer

Street interviews with:

Bukit Panjang residents (Part 1) on 19 Nov 2008

Bukit Panjang residents (Part 2) on 19 Nov 2008

Ang Mo Kio residents on 20 Nov 2008

Whampoa residents on 22 Nov 2008

Read the rest here.

Teo Ho Pin: Still proud to vote for him?

I wonder if Yaw Shin Leong will retract his endorsement of Teo Ho Pin after the revelations of town council fund mismanagement.

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Be thankful to Dr Teo Ho Pin for illustrating the PAP’s hubris and arrogance

by Ng E-Jay
20 November 2008

According to an article entitled “Dr Teo says ‘be thankful’” which was published in the TODAY newspaper on 19 Nov, Dr Teo Ho Pin, MP for Holland-Bukit Panjang, says residents should be thankful that their Constituency’s funds have grown under the Town Council’s watch.

He was referring to earlier revelations in Parliament that eight PAP Town Councils have about $16 million invested in troubled structured products, of which the lion’s share of $8 million is from Holland-Bukit Panjang.

Dr Teo was quoted by TODAY newspaper as saying that the potential $8 million loss suffered by Holland-Bukit Panjang Town Council “should be viewed in the context of the $24 million in investments generated over the past six years“, and that “if the Town Council had invested all its funds in low-risk investments, it would have earned only $5 million.”

My opinion is that rather than giving our thanks to Dr Teo Ho Pin, who is incidentally Coordinating Chairman for all the 14 PAP Town Councils, for generating positive returns for Town Council funds over the past six years, we should instead be grateful that he has beautifully illustrated the sheer level of hubris and arrogance of the PAP.

Read rest of article here

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SM Goh should send Teo Ho Pin to learn from Hougang Town Council to keep PAP MPs on their toes

By Eugene Yeo
19 Nov 2008

On 26 July this year, SM Goh urge PAP members to play the role of an “effective opposition” in his speech at the Hougang National Day Dinner at Hougang Community Club:

“In Hougang, let us keep Mr Low Thia Khiang on his toes. He is responsible for running the Hougang Town council. But unlike Parliament, town councils do not have open meetings where members from other political parties can question their performance.

So, in Hougang, you have to be creative to be an effective opposition. Amongst the things you can do, I suggest you study the annual accounts of the town council to ensure that the funds are properly used. Check whether the arrears for S & C charges are piling up, and eating into their reserves. Make sure that enough money is put aside for cyclical maintenance.”

Now who has been playing the role of a watchdog on PAP - managed Town Councils ?

Read the rest of the article here.

Responses to Chua Sheng Yang's Forum Letter

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My response to the ST letter “Questions on investment products rally” - November 18, 2008
Written by Ng E-Jay

This is my response to a Straits Times forum letter penned by Mr Chua Sheng Yang published in the print edition on 18 Nov.

Entitled “Questions on investment products rally”, Mr Chua claims that “too many people are taking advantage of the situation to get back money from what they knew was a risky investment“. He was referring to the recent rallies organized by Mr Tan Kin Lian at Speaker’s Corner to help investors seek redress over their failed investments in structured products.

Mr Chua sounds like a toy-sized replica of Minister Mentor Lee Kuan Yew who also assumed that “investors had no case” and that they went in “with their eyes open”. Like the Minister Mentor, isn’t Mr Chua also jumping to conclusions without any substantial facts, and even before the investigations have been completed? Who is he to assert that investors are taking advantage of the situation and that they knew it was a risky product?

Read the rest of E-Jay's letter here

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Phone interview with Mr Chua Sheng Yang
By Eugene Yeo, Senior writer

Mr Chua Sheng Yang wrote a letter to Straits Times forum today - ”Questions on investment products rally” in which he appeared to question Mr Tan’s motives for organizing the minibond rallies. He also insinuates that Mr Tan had employed similar sale tactics during his stint as NTUC INCOME Chief which infuriates many netizens.

At 11pm on 18 Nov, the Wayangparty Club made an open appeal here for any reliable information of Mr Chua Sheng Yang. Thanks to an alert reader who emailed us his contacts, I was able to contact him to conduct a 20 minute interview.

Read the interview here

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Character Assasination! Target 1: TKL - 18 Nov
By the Blockhead

In my previous post, I was blogging about how some people from you-know-where will start doing character assasination. Today in the Straits Times, it happened.

Mr Chua Sheng Yang has decided to give the 1st target Tan Kin Lian a shot below the belt.

Read the rest of the article here.

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MAS and Stat Boards invest in credit-linked notes as well

The ST article below highlights comments by Finance Minister Tharman regarding stat board investment exposure to credit-linked notes.

He did not reveal the identity of the 5th stat board, except to admit after questioning from NMP Siew Kum Hong that, "a fifth unnamed statutory board had financial products linked to CDOs and CDS, aside from credit-linked notes"

I think everyone would also like to know the name of that 5th stat board. Whats there to hide afterall? Because of this secrecy, I am left to speculate its either the CPF board, Public Transport Council, HDB or People's Association.

Thats the real problem with this whole crisis; too much secrecy.

Yes, yes, the 4 stat boards invested in credit-linked notes but these were not the ones that have experienced a "credit event". Should I be happy for them?

Just because they have yet to experience a "credit event" does not make them sound investments in the first place, as recent history suggests. But rather then to nitpick on investment choices and say "you should have known better", I have a feeling that everyone who is directly or indirectly affected by bad decisions and advice are more upset over the overall secrecy shrouding the issue.

Nov 19, 2008
5 stat boards' investments
http://www.straitstimes.com/Breaking%2BNews/Singapore/Story/STIStory_304115.html

THE Monetary Authority of Singapore (MAS) - Singapore's central bank and financial regulator - was among five statutory boards that invested in complicated credit-linked notes.

But none of the statutory boards - including the MAS - invested in notes that have now become worthless, such as DBS High Notes 5 and Merrill Lynch Jubilee Series 3 LinkEarner Notes.

The central bank had invested only 0.1 per cent of its portfolio in such investments, which in fact made a net gain over the past year.

A Ministry of Finance (MOF) spokesman, who revealed this to The Straits Times yesterday, did not give the actual size of the investment.

He was responding to queries after Finance Minister Tharman Shanmugaratnam told Parliament that five statutory boards had invested in credit-linked notes, but only named four: Singapore Civil Service College, Singapore Land Authority (SLA), Infocomm Development Authority of Singapore (IDA) and Professional Engineers Board.

Mr Tharman had emphasised in Parliament that the four boards had invested in credit-linked notes, but not the ones which have gone into default or suffered credit events that have caused their value to plummet to zero and triggered early redemption.

The notes that have suffered this fate include Lehman Minibonds, Merrill Lynch Jubilee Series 3 LinkEarner Notes, DBS High Notes 5 and Morgan Stanley Pinnacle Series 9 and 10 Notes.

Although he did not provide the actual amount invested by each of the four named statutory boards, he said that the exposure as a percentage of their total combined investment portfolio was only about 0.05 per cent.

These investments are currently suffering paper losses of about 14 per cent over the past year, he added.

'On a mark-to-market basis, these credit-linked notes held by the four statutory boards have not performed very differently from the performance of global markets generally this year,' he said.

'The four statutory boards are nevertheless monitoring the situation on all their investments, and will take the necessary steps to minimise any losses in these investments.'

MOF later told The Straits Times that the four statutory boards have had positive returns on their overall investment portfolios this year, averaging about 2 per cent.

And for the past three years, the average annual return on their investment portfolios had averaged 3 per cent.

Mr Tharman was responding in Parliament yesterday to questions from Non-Constituency MP Sylvia Lim, who asked whether statutory boards had invested in risky structured products which were linked to bankrupt United States investment bank Lehman Brothers.

Nominated MP Siew Kum Hong also wanted to know if those investments were linked to collateralised debt obligations (CDO) or credit default swaps (CDS), which are both complex investment products at the centre of the global credit crunch.

It was in response to Mr Siew's question that Mr Tharman revealed a fifth unnamed statutory board had financial products linked to CDOs and CDS, aside from credit-linked notes.

'These products comprise around 0.1 per cent of the statutory board's portfolio, and have in fact made a net gain over the year,' he added.

On how and why these statutory boards invest, Mr Tharman explained that all of them keep some surpluses for 'future capital expenditures and as a buffer against unanticipated spending needs or budget shortfalls'.

'They manage and invest these funds in financial assets to earn an appropriate return within acceptable risk limits, after taking into account their cashflow and liquidity needs,' he added.

According to Mr Tharman, statutory boards also have to ensure they have appropriate investment management structures for proper oversight of its financial investments with prudent risk management.

Town Council Revelation - let's stop throwing good money after bad

In Parliament yesterday, it was revealed that 8 town councils (TC) run by the People's Action Party have about 16 million invested in troubled structured products; 12 million of which belongs to Holland-Bukit Panjang TC (8 million) whose chairman is incidentally the coordinating chairman for all the 14 PAP TCs.

Naturally, Dr Teo Ho Pin has defended the TCs' investment strategy as being prudent by quoting the often used financial term “diversified”. His strategy may very well be diversified, but an averaged return of 3% per annum in the last six years before the debacle of this mini-bond saga those make you wonder if the investment choices were sound in the first place.

According to Dr Teo, Holland-Bukit Panjang has 8 million is invested in Minibonds and Jubilee notes, which works out to 6.7 per cent of its investible funds. And, it has another $3 million in the potentially-troubling Pinnacle Notes Series 6 arranged by Morgan Stanley.

Therefore, his TC had invested about 9% of its investible portion in structured instruments which are worth close to nothing now.

But wait a minute, while we know how much went into these bad investments, we do not know the total amount invested in what he described as deposits, securities and other financial products.
We do know that the proportion of investible funds are limited to 35%. Since 8 million is 6.7% of this portion, we know that Holland-Bukit Panjang TC alone has about 340 million in sinking funds. Therefore according to the rules, approx 119 million is available to Holland-Bukit Panjang TC for investments.


How much money do the TCs have?

Dr Teo further added that 16 million is 0.8 per cent of all their funds available for investment. Thus, all the TCs combined have 2 billion apportioned for investments. As he limited to the investible portion is 35% of the total sinking fund, TCs have about 5.7 billion! Yes, billion.

But that’s not all. As the sinking fund is distinct from the operating fund for short-term expenses, the amount can only go up. Conservative estimates would probably put the figure between 6 – 7 billion.


Crappy returns

Even if you can get pass this excessive hoarding of public monies for who knows what purpose, don’t you think an Investment strategy that returned an average of 3 per cent a year during an extend bull-run - and even before the fiasco this September involving Lehman-linked products – is simply crap!

Especially when an average 2.9% return on 10-year Singapore Government Securities bonds was scoffed in the hope of earning a measly 0.1% more.

And to rub salt to Division 1/hand-picked /future leaders/A team/PAP-ministars, Hokkien Low’s (Thia Khiang) Hougang TC investment returns averaged 6 per cent a year.

Personally, I question the need for quasi-governmental institution to hoard such large amounts of money. For one thing, they often do not know what to do with them and as a result they turn to “financial experts” whom as far as we know could be their nephews, grassroots leaders and what-not.

Don’t believe such corruption / graft is possible? When there is money on the table, greedy hands are soon to follow.


Two things I would like to see

Firstly, my worry is that as these worthless structured products were once considered conservative and safe options based on guidance from rating agencies. Add in the fact that no one throws all their eggs into a single basket (at least I hope) and a diversified portfolio includes both low and high risk investments, I have to wonder what other products made up the entire portfolio for Holland-Bukit Panjang TC.

If these mini-bond notes were considered low risk at that time, what were the high risk items that were purchased with the remaining investible portion of the sinking fund? I hope the TC will be more transparent about its investment portfolio.

And secondly, I hope that in light of the performance of the MPs involved, their year-end bonuses would be withheld and pumped back into replenishing that was lost due to their poor leadership and oversight. Let's not reward mediocrity with good public money. Afterall, we are already running a budget deficit 3 times more than expected.

Other readings:
No Bonuses for Top Executives at UBS
Goldman execs choose to forgo 2008 bonuses

Lock n Load! - PAP Platoon move out!

I read with bemusement Fang Zhi Yuan’s (chief editor of Wayangparty.com) op-ed on why the PAP will win the next election with an increased majority. His piece was in response to rumours of an early election following the news that Election Department has already begun to select and train election officials.

The ‘rumour’ was in fact confirmed yesterday when PM Lee came out to say that Budget Statement 2009 will be brought forward a month to January 2009. In addition, he announced that electricity charges would drop in that same month and might be lower than the levels at Oct this year.

These promises to stimulate the economy, support jobs and reduce the cost of living were however accompanied with a thinly-veiled caveat: “the country is much better off with one dominant party, as long as the PAP provides clean and good government, and the lives of Singaporeans improve.”

The venue of these announcements is also noteworthy. They were not made on the sidelines of community event but as keynotes at the People's Action Party conference. The underlying message to PAP activists, it’s our time to shine!

Back to my bemusement at Zhi Yuan’s piece. While I was initially stumped by his level of pessimism over the hopes of the opposition at the next election, I can see clearly how, as he put it, I had “grossly underestimated the well-oiled election machinery of the PAP”.

For the past 5 years, Singapore has enjoyed economic growth and prosperity following major crises from 1997 to 2003. But ironically, ‘goods times’ only spell ‘bad times’ for the PAP, as financial worries are replaced by aspirations for political plurality, press freedoms, civil rights and so on.

Take the 1997 elections for example. This was held in Jan and thus it was still during a period of prosperity and economic growth. The PAP only managed to garner 65% of the vote.

Then the Asian Financial Crisis hit at the tail end of 97 and was followed by another seminal event, the bombing of the WTC in Sep 11, 2001. The PAP swiftly called for an election in Nov of 2001 and won 75% of the electoral vote.

The poor vote return won by PM Lee (66.6%), which was achieved during a period of economic ascendance following the slowdown brought about by SARS, could perhaps be partly attributed to the testy ‘transitional vote’ which was mirrored in Goh’s poor performance In 1991 (61%) after taking over the reigns from Lee Kuan Yew.

In fact, Goh’s only real mandate was achieved during economically trying times. Hence it would not be surprising for PM Lee to bring forward the next GE as soon as possible to ride on these uncertain times.

The PAP is not stupid. They are well-aware that they are clueless in preparing for greater political participation and dealing with a citizenry that is more vocal and politically aware. They do not know how to deal with the foreign press apart from suing for defamation. They do not know what to do with the growing instances of civil disobedience and greater expression .... but one thing they do know is how to spin economic uncertainty in their favour.

They will dangle carrots galore during the early budget statement. They will announce a stimulus package to (as they will tell us) make sure we can keep our jobs and maintain our standards of livings. They might even give us some cash to ride out the year till their plans that effect.

They will also above all make it clear that without a mandate from the people, they will not be able to follow through with these measures. This is just the beginning.

Habeas Corpus is not dead

Definition: The writ of habeas corpus serves as an important check on the manner in which state courts pay respect to federal constitutional rights. The writ is "the fundamental instrument for safeguarding individual freedom against arbitrary and lawless state action."

Malaysian blogger Raja Petra Kamarudin, fondly known as RPK, was release last week after the Malaysian High court granted his habeas corpus application and ruled that the Home Ministry had acted outside of its powers.

But RPK trials are not over and his Sedition hearings continue today.

Nonetheless, the ruling was a victory for Malaysian society as a whole as it sends a strong message that the government does not hold absolute power. The ruling may also mark the beginnings of a successful movement to abolish the ISA once and for all. Such a move may have ripple effects on our shores.

Blogger Raja Petra freed
http://www.nst.com.my/Current_News/NST/Saturday/National/2396279/Article/index_html
By : Rita Jong
8 Nov

SHAH ALAM: The High Court yesterday ordered the immediate release of Raja Petra Kamarudin from his two-year detention under the Internal Security Act.

This followed the decision of judge Datuk Syed Ahmad Helmy Syed Ahmad to allow the Malaysia Today editor's habeas corpus application, which was filed on Sept 31.

Syed Ahmad held that the home minister had issued the order outside the scope of Section 8(1) of the Internal Security Act 1960.

He also allowed the application by Raja Petra's counsel, Malik Imtiaz Sarwar, to order that he (Raja Petra) be brought from the Kamunting detention centre to the Shah Alam court before 4pm for his release.

Syed Ahmad said he found there was no merit for the applicant's counsel to state that Section 8 was unconstitutional, as it fell within the ambit of Article 149 of the Federal Constitution.

(Article 149 allows action to be taken against anyone who threatens national security even if it violates his fundamental liberties.)

"But in issuing the order, the minister can only do so based on grounds provided under the ambit of the act. The minister cannot simply detain someone. He must be confined to the circumstances stated."

He said based on the grounds given by the minister for the detention, "I found that it did not fall within the scope of Section 8 (1) of the ISA."

On the grounds that the order was made in bad faith, he said that this was not a matter for review by the court as "mala fide is not procedural and non-compliant."

Raja Petra was arrested on Sept 12 as he was deemed a threat to national security and the order to detain him under the ISA was issued on Sept 22.

He was detained on the grounds that he:

- owns and operates the Malaysia Today website;

- intentionally and recklessly published his articles as well as readers' comments on Malaysia Today that were critical of and insulted Muslims, the purity of Islam and the personality of Prophet Muhammad; and,

- that he published his articles concerning national leaders that were defamatory and false with the intention of undermining confidence and inciting public hatred against the government, which could affect public order and prejudice national security.

In filing the habeas corpus application, Raja Petra named the home minister as the respondent.

Senior federal counsel Abdul Wahab Mohamad and Dusuki Mokhtar appeared on behalf of the minister. Malik Imtiaz was assisted by Azhar Azizan Harun, Ashok Kandiah, J. Chandra, Sreekant Pillai and H.K. Neoh.

After Syed Ahmad delivered his decision, Raja Petra's supporters clapped with joy, only to be ticked off by the judge who reminded them that they were in a court of law.

Raja Petra's wife, Marina Lee Abdullah, and their two daughters, Suraya and Sarah, were in tears.

Later, Marina said: "No words can describe how I am feeling right now. I am just glad everything went the way I hoped. This is fantastic."

Raja Petra arrived at the court in a white van, escorted by five warders, at 3.15pm to a hero's welcome.

When he got out of the van, the blogger, clad in a brown T-shirt and jeans and looking tired, gave the thumbs-up sign as some 100 supporters chanted "RPK! RPK!" He hugged and kissed his wife.

He was then led into the courtroom and Syed Ahmad ordered his release at 3.20pm.

After the court stood down, a supporter placed a garland on him.

"I am quite surprised that I am released.

"Not many people who challenged the ISA detention succeeded. So I didn't give it too much hope."

He added that the fight to abolish the ISA must continue.

Raja Petra had to jostle his way past some 50 photographers to get into a maroon-coloured Rolls Royce with Marina, before leaving the court compound at 3.35pm.