Temasek and Transparency—III

August 20, 2009
Singapore Democrats

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The Wall Street Journel

The finance minister raises more questions than he answers.

Chip Goodyear’s resignation as CEO-designate of Singapore state-owned investment fund Temasek last month may have done more good for taxpayers in the city-state than his five-month tenure. For the public ruckus his abrupt departure caused is empowering Singaporeans to demand more transparency about how their monies are managed.

On Tuesday, legislators from the ruling People’s Action Party and opposition Workers’ Party asked Finance Minister Tharman Shanmugaratnam why Mr. Goodyear resigned. “People do want to know,” Mr. Tharman replied. “There’s curiosity. But that is not sufficient reason to disclose information.” Later, he added: “It will not be advisable, nor in the interest of Temasek or Mr. Goodyear, for us to comment further. It serves no strategic purpose.”

In other words, the government will only disclose what it deems acceptable regarding Temasek, a fund that totalled 127 billion Singapore dollars ($87 billion) as of November. Temasek’s internal governance, Mr. Tharman said, “is a matter for the board to oversee and the key task of the government is to make sure we are comfortable with people on the board. Once government starts intruding, or for that matter, parliament starts intruding, with the best of intentions, then we are, over time, changing the character of that relationship between government and Temasek.”

Given Temasek lost more than S$40 billion Singapore dollars between March last year and this year under current CEO Ho Ching’s watch, there is an argument for more outside scrutiny from parliament, which represents the Singaporean people. There is an argument, too, that Mr. Goodyear could have brought a fresh perspective. Had he taken over as CEO, he would have been the first non-Singaporean to fill the role. He also had extensive international experience, having run businesses in the U.S. and Australia.

Mr. Tharman did give direct responses to several questions. When asked about whether a local should run Temasek, he replied: “I would say that ideally we should have a Singaporean as a CEO, everything else being equal.” He confirmed that Mr. Goodyear did not receive a golden handshake upon leaving Temasek. He also said there is “no push factor” for Ms. Ho to resign.

But Mr. Tharman ultimately raised more questions than he answered. “Temasek is not untransparent,” he said. “It is more transparent on matters that really concern us ultimately, which is investment performance—being accountable for long-term sustainable returns.” Under Singaporean law, Temasek is not required to disclose its financial statements. But if Mr. Tharman is going to tout Temasek’s returns, then why doesn’t the fund release complete historical financials to back up its claims?

Temasek has taken baby steps toward more transparency under Ms. Ho. The questions raised in parliament Tuesday show the Singaporean people support those efforts, and want more.

http://online.wsj.com/article/SB10001424052970203550604574359720194516500.html?mod=googlenews_wsj

 

Read also:
Temasek and Transparency (12 Feb 09)
Temasek and Transparency – II (21 Jul 09)