Dumb And Dumber

Dumb And Dumber

Barely a week ago, on Thursday 28th May 2009, Finance Minister Tharman Shanmugaratnam was still defending Temasek Holdings in Parliament, repeating ad nauseam, “Temasek is a long term investor, not a short term trader of assets.” He was referring to the debacle of losing up to S$6.6 billion when Temasek sold off its Bank of America (BoA) shares. Responding to Ang Mo Kio GRC MP Inderjit Singh’s question on whether the Ministry of Finance was planning to issue new guidelines for future investments, Tharman also assured Parliament that “This is not an auto-pilot system where you have three separate entities doing their own thing, and Government doesn’t know how its added up, what risks are accumulating.”

Not a single word was breathed about the Barclays Bank disaster.

Thanks to the foreign media, we now know Temasek Holdings sold its stake in British banking giant Barclays Plc in December and January, at an estimated loss of between S$1.2 billion and S$1.44 billion. In a sickening repeat of the BoA buy-high, sell-low fiasco, the sale was done at a period when Barclay shares were as low as 47.3 pence in January, its lowest since 1985. Barclays shares closed at 273.5 pence yesterday. To demonstrate that money can be made in Barclays, Reuters reported that the Abu Dhabi government bought into Barclays in October 2008, and sold out for a US$2.5 billion profit seven months later. Too bad the smart guys are working in Abu Dahabi, and obviously not at Temasek.

And why was Temasek’s loss not made known to Parliament? Apparently only shareholders with more than 3 per cent need to disclose changes in their share holdings. Temasek’s stake in Barclays was about 2 percent, even though it’s S$2.4 billion (1 billion pounds) invested in Barclays, starting in July 2007. At that time, Frank Tang, senior managing director at Temasek, was quoted as saying,”We are pleased to have this opportunity to invest in Barclays. We look forward to supporting them in their strategy to create opportunities for a higher level of sustainable growth.” Naturally, Temasek declined to comment on the Barclays stake sale. Who knows what other skeletons are in the closet.

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