The recent announcement that the GIC stood to lose in excess of $5.6 billion comes as no surprise. The Swiss bank had been plagued with problems and the SDP had warned on at least five separate occasions against the GIC investing in it.
1. As early as 2009, the SDP warned:
“Either Dr Tony Tan (who was the GIC's executive director then) knew about the developments and problems that UBS was facing and chose to ignore them, or he had no clue that trouble was brewing in and around the bank. Which is worse?” (link)
2. We repeated the warning one month later:
“The GIC put in US$10 billion into UBS which later announced a US$19 billion write-down. UBS admitted to helping to defraud the US Government and was made to pay substantial amounts in fines. Is this how our best and brightest in the Government practice due diligence?” (link)
3. Dr Chee Soon Juan cautioned a third time that year:
“The latest revelation is that Citi, UBS, Merrill and Barclays had all invested in the Bernie Madoff scam. Mr Madoff ran the biggest Ponzi scheme in corporate history and duped his investors to part with nearly US$50 billion of their money. In fact UBS is being sued in France by a wealth management company for its involvement in the Madoff madness.” (link)
4. When UBS got into further financial trouble in 2010, the SDP again sounded the alarm:
“But instead of learning from its mistakes, Mr Ng Kok Song (then GIC's Chief Investment Officer) doubled down and said in 2009 he that he still had 'confidence' in the 'long-term prospects' of the investment. This confidence seems quite misguided.” (link)
5. In 2011 during the Presidential Election, we raised the matter yet again:
“Either (candidate) Dr Tony Tan knew about the developments and problems that UBS was facing and chose to proceed by putting money into it anyway, or he had no clue that trouble was brewing in and around the bank. Whichever it is, the incident does not back up Dr Tan's boast that he is the experienced guardian with the ability to, in his words, see 'the dark clouds over the horizon coming on.'” (link)
These warnings, however, fell on deaf ears as the GIC continued to pour money into the troubled bank only to belatedly cut its losses 10 years later.
The recklessness and incompetence of this government has resulted in a massive loss of billions of dollars of the people's money. As Chairman of the GIC, PM Lee Hsien Loong cannot remain silent on this matter.
A public inquiry is wholly appropriate and necessary at this juncture.