Tag Archives: Scandal

The truth about Temasek, CPF and Lee Hsein Loong

Temasek doesn’t really make 16%
Your CPF money isn’t really safe.
And Lee Hsien Loong is a coward.

Sometimes we get so caught up in the day-to-day arguments that crop up on Facebook, social media, and even in real life, that we lose track of the big picture. Despite the very obvious question marks surrounding the way CPF funds are managed, though the government, through Temasek, through GIC and ultimately by the Lee family, I realise that I’ve written almost nothing on the topic. Given Lee Hsien Loong’s sustained and ethically dubious attack on fellow blogger Roy Ngerng, now seems like a good time to visit these topics.

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2016: All Eyes on Tony Tan

All Eyes on Tony TanThe President of Singapore, alongside his council of advisors, has many powers that could be used to frustrate a future democratically elected government. Current President Tony Tan, as a former PAP Deputy Prime Minister, has extremely close links to the ruling party and is also one of a core group of senior cadres noted for their abuse of the legislative process in bringing defamation suits against Tan Liang Hong and others. Come 2016, it will be essential to contrast Mr Tan’s currently hands off attitude towards the ruling party’s recent unlawful and unconstitutional behaviour, with any stance he may take towards a possible opposition government. Tony Tan has a troubling track record when it comes to partisan abuses of power and Singaporeans must be vigilant that his position as President is not used as a platform to block democratic progress.

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Auditor General: Breaches of Law in Prime Minister’s Office

Barely a week after Lee Hsien Loong spoke of integrity and the importance of admitting ones mistakes, the Auditor General released his annual report and gave the PM the perfect opportunity to practice what he preached. The report for 2012/13 cites more than two dozen incidents relating to contracts worth almost S$300M where the PMO’s National Research Foundation appear to be in violation of The Building and Construction Industry Security of Payment Act. While the PM himself is not directly implicated, the failure of a department under his oversight to abide by its legal and contractual obligations clearly raises significant questions. Will the PM or his office stand up for their integrity and admit to these mistakes – as the PM has urged his political opponents to do over much smaller matters – or will a hypocritical silence be maintained?

To quote the Auditor General’s report directly, under the heading “Prime Minister’s Office”:

62. The Building and Construction Industry Security of Payment Act (Cap. 30B, 2006 Revised Edition) stipulated the time frame for making payment and requirements for payment response to a payment claim. The Act was passed to address cash flow problems faced by the construction industry by upholding the rights of parties to seek progress payments for work done and goods supplied.

63. For the contract for building works construction and another contract for foundation works (total contract value of $295.72 million), AGO found 32 instances of late payment to contractors (totalling $254.04 million). In six instances (totalling $26.09 million), the delays ranged from 33 to 174 days.

64. For the three consultancy services contracts (total contract value of $27.25 million), AGO observed that NRF did not provide payment responses to the consultants’ payment claims (totalling $24.56 million).
Report of the Auditor-General for the Financial Year 2012/13

Some observers may find it shocking that the Auditor General claims to have observed unlawful behaviour on the part of the government, but in fact this year’s revelation follows even more serious breaches detected by the AG last year. As was first reported by Kenneth Jeyaretnam, the Ministry of Finance last year broke the law – in fact the constitution – in issuing a “promissory note” to the World Bank without presidential approval. In the same year, the Ministry for National Development was also found to have breached the constitution by engaging in unlawful accounting methods on a land reclamation project.

In any normal democratic country, unlawful or unconstitutional behaviour on the part of the government would be a significant scandal, in Singapore however these mistakes go completely unreported by a mainstream media that apparently deems the cleanliness of a hawker centre to be much more significant. A mainstream media also that uncritically toes the government line on what constitutes “integrity“, but will surely not call the PM out if he maintains a hypocritical silence in failing to admit to the many unlawful mistakes that have been committed by entities responsible to him.

The key question arising from the AG’s findings is whether the current government are fit for purpose in terms of upholding the public interest. Can a government that despite being extremely well paid, repeatedly breaches the law, the constitution and their own contractual obligations be entrusted with the wealth and wellbeing of the nation? The PM should take his own advice. Speak the truth. Things have clearly gone wrong, and even though it is inconvenient the PM should admit to the unlawful mistakes made by the current government. A failure to do so will only leave the PM open to accusations of hypocrisy since these are exactly the steps the PM urged his political opponents to take over actually much more trivial mistakes made in the cleaning of a hawker centre.

The PM should respond. His integrity is at stake.

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The author of this article contacted the Prime Minister’s Office who were offered the chance to comment on the concerns raised by the Auditor General’s report. No response was received.

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The PAP will not change. The PAP cannot change.

Are the PAP changing? Will the PAP change? Can the PAP change?
Emphatically – No.

I feel strongly that Singapore’s ruling party cannot, is not and will not change their ways – but why? Simple. It is impossible for the PAP to do so. Impossible because they are hostages to history. Hostages to their own history – a history of ruling Singapore through divisive, immoral and at times lawless authoritarianism.

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NTUC – The snake that eats its own tail

NTUC.
The snake that eats its own tail.
The union employer that abuses its own staff.

It is hard to imagine a more stunning demonstration of how un-fit for purpose Singapore’s “tripartite” labour model really is. In fact, if you made this up as a hypothetical example of what could go wrong with employer-employee-union relations in Singapore, people would laugh in your face because it is too ridiculous to believe. Unfortunately however it is true.

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S$25,030 Dollar Question on AIM Scandal

The $25,030 Dollar Question still unanswered about the AIM scandal:

Why?
Why do the deal at all?
Why sell public property into party political hands for a pittance?

Teo Ho Pin and the PAP have been scratching around in a state of panic to justify the deal that has had Singaporean’s scratching their heads for weeks. On releasing a desperate – and desperately confusing – press release yesterday it appeared at first glance that they had succeeded – the deal could be justified on operational and financial grounds. But as soon as Singapore’s online community got their teeth into it, the explanation immediately started to fall apart. The suggestion that the whole operation was intended as a “fix” to inconvenience any democratically elected opposition to the PAP increasingly looks like the only credible reason.

The first justification appears to come from paragraph 18 of the statement “[T]he TCs expected to gain a modest amount (about S$8,000) from the disposal of IP in the existing software”. This supposed justification was repeated by both the Straits Times and Channel News Asia – Teo, AIM & the PAP would like you to know that the TCs made a profit and therefore the deal was a good one – but actually that is not the whole story. Teo’s cleverly worded statement focuses only on the “disposal of IP in the existing software” and that is only one part of the whole deal. Read on to paragraph 25 and the S$25,030 dollar question rears its ugly head

“from November 2011 to April 2013, the management fee payable to AIM for the whole suite of services it provided was S$33,150”.

So why boast about an S$8,000 gain, when you later go on to pay S$33,150 in management fees?

Confused? Teo hopes you are, but let me explain. The S$8,000 gain comes from the fact that AIM paid S$140,000 for the software rights, but received only S$131,880 (S$785 per month from 14 town councils for 12 months) in return – the difference being S$8,120. But then the TCs also paid a further S$33,150 in management fees, so the net loss to the Town Councils is actually S$25,030 dollars. So this is the first problem for Teo and the PAP. Why use the S$8,000 gain made by the TCs from selling the software to justify the deal when in fact the deal as a whole yielded a net loss of at least S$25,030.

Further question: The statement by Teo does not mention if any management fees were paid for the first phase of the contract, from November 2010 to October 2011. Where there any, and if so, how much?

The second potential justification for the deal actually came in paragraph 5:

The main issue, however, was that the system was becoming obsolete and unmaintainable. It had been built in 2003, on Microsoft Windows XP and Oracle Financial 11 platforms. By 2010, Windows XP had been superseded by Windows Vista as well as Windows 7, and Oracle would soon phase out and discontinue support to its Financial 11 platform.

Apparently this is the “main issue”. In 2010 Teo was advised that the system was becoming obsolete. Yet the tender notice mentions nothing of replacing an obsolete system or commissioning a replacement. From a careful reading of Teo’s statement we can see that the maintenance contract for the old system has been renewed until April 2013 (paragraph 23), so it is still running a full three years after Teo was advised that it was out of date Again, there is practically no information in the statement regarding what steps Teo has taken as coordinating chairman for the TCs to replace this obsolete system. Given that the main issue was obsoleting and not depreciation, why have Teo, the TCs and the PAP entered into this bizarre and unjustifiable sale and lease-back deal rather than work full speed on replacing the old system?

This whole saga has been dragging on for weeks, and if the PAP want to win back the trust of the people on this issue, they need to take some serious steps. This author would like to see the books of AIM fully opened to public scrutiny, would like to see all minutes of all meeting where not just the sale and lease-back deal were discussed, but also the discussions, if any, regarding upgrading the obsolete systems. Finally the report presented by Deloitte and Touche Enterprise Risk Services Pte Ltd regarding the review of the TC software that apparently led to this deal being undertaken should also be released to the public. Nothing less will restore confidence that the deal was done for the right reasons.

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