The judgement in my appeal against the IMF Loan Commitment confirmed what has long been apparent: that the government is to all intents and purposes above the law. Furthermore, the judiciary are not there to act as a check on the executive (a “red light” in CJ Chan’s parlance) but instead to “green-light” illegality by preventing citizens bringing actions to have the illegal behaviour stopped. In a uniquely Singaporean version of jurisprudence, the judiciary is essentially subordinate to the executive. In my response I will deal first with the merits of the argument and then with the issue of locus standi.
“The Appellant has failed to establish a prima facie case of reasonable suspicion”
The learned judges dismissed my appeal on the arguments on the grounds that:
- It was clear from the initial draft of Article 144 when the bill was first put before Parliament that the giving of loans was to be excluded from the need for Parliamentary and Presidential scrutiny
- While admitting that they were ill-placed to comment on the validity of the financial arguments that I put forward to show that a loan commitment was a contingent liability and in nature akin to a guarantee the judges went ahead anyway and dismissed my arguments. In doing so they made some shocking mistakes and misinterpreted an excerpt from a US Federal Deposit Insurance Corporation manual whose meaning should have been abundantly clear. They also argued that, despite the overwhelming evidence I had produced to show that regulators and banks treated loan commitments as contingent liabilities in the leading financial centres of the UK and the US, the accounting treatment might be different in Singapore. If that is the case, the IMF should kindly explain why they selected our Finance Minister to be Chair of the International Financial and Monetary Committee if Singapore differs so markedly from accepted practice in major countries.
- Though this was only touched on peripherally the judges also reiterated the nonsensical argument that MAS was an entity separate from the government.
I will deal with the arguments in (a) above first. I argued at the appeal hearing that it was only necessary to look for the original intention behind the legislation if the natural and ordinary meaning of the words was not clear. To any layman, the words “no guarantee or loan should be given or raised” would mean that both nouns could be paired with either verb. The fact that the proposed wording of Article 144 when the Bill was introduced into Parliament suggested that each noun was to be paired with a corresponding verb (the reddendo singular singulis argument) does not mean that we should use that interpretation. The words “debt” and “incurred” had been left out of the Article as enacted by Parliament so the original wording is an unreliable guide. It is equally likely that Parliament wished to have tighter financial controls rather than looser and thus intended both the giving of guarantees and loans to require Parliamentary and Presidential approval.
The Appeal Court judges do not address this issue only saying that they sided with the original judge in his interpretation. They also say that it is not ordinary parlance to speak of “raising” a guarantee and that therefore “raised” in Article 144 must be applied to “loan” only and “given” to “guarantee” only. I fail to follow the judges’ logic here. Just because one noun may not make sense when paired with one of the verbs, it does not follow that therefore we can exclude the other noun from being paired with both verbs if it makes perfect grammatical sense to do so.
In any case I showed that it is common parlance to speak of raising a letter of credit. A guarantee is to all intents and purposes very similar to a letter of credit. Both instruments require the issuer to pay out if the party that is covered by the guarantee or letter of credit fails to do so. The judges say that they are different instruments and serve different purposes. However as their accounting treatment and risk profile for the issuer would be identical it is difficult to see why the example for letters of credit should not apply to guarantees.
However whilst it may be possible to argue about the meaning of the words the judges completely failed to deal with my main point as set out in (b) above. This is that this is a loan commitment and not a loan. If they were ill-placed to comment on the validity of my arguments, not having seen any written submissions from either me or the AG, then why not call for written submissions from both sides after the hearing was over. Alternatively they could have adjourned the hearing to allow both sides to make written submissions. Counsel for the AG called for my submissions to be stricken from the record on the grounds that they involved complex financial and accounting matters for which she had not prepared. This was disingenuous since counsel also refused my offer of a short postponement to allow her to prepare. It is unfortunate that the judges, despite taking nearly seven months to deliver their verdict, did not allow me more consideration given the gross disparity in the resources available to me as a litigant in person as compared with the government.
I produced evidence from a wide variety of sources, including the US Federal Deposit Insurance Corporation’s Manual, the Bank of England’s Yellow Folder and the last published accounts of J P Morgan, the leading US bank, to show that banks were required to record loan commitments as contingent liabilities on their balance sheet. As the judges mention, I pointed out that the UK Chancellor of the Exchequer himself referred to the UK’s loan commitment to the IMF as a “contingent liability.”
This is reinforced by the fact that the interest rate on loans made to the IMF is virtually zero. It is therefore inexplicable how Singapore’s IMF loan commitment could be considered an asset. Since the government pays CPF holders 4% to borrow their money the IMF loan, if drawn upon, must be a money-losing proposition from the moment it is drawn down.
In support of the argument that the loan commitment was a liability not an asset I cited US Statement of Financial Accounting Standards 133. This requires that loan commitments be treated as options on bank balance sheets and marked to market. A loan commitment is in the nature of a call option granted to a potential borrower that gives them the freedom to draw on the money at a time of their choosing. An option cannot be worth less than zero and should normally have a positive value while the writer of the option would have to record a corresponding liability. The option could not be worth less than the present value of the difference between what it would cost the IMF to borrow in the open market and the interest rate that it would pay on the loan if drawn down (effectively zero).
Yet the judges chose to misunderstand my point and claim that they were surprised that as an economist I did not understand the difference between a loan commitment and an option. There may be a legal difference but clearly in economic terms a loan commitment is an option because the borrower has the right to draw down the loan but is not obliged to do so. It is the learned judges who demonstrate their basic ignorance of modern finance theory.
The judges made other basic errors. The judges said that I had quoted Christine Lagarde as calling the new lending commitments by IMF members a “fireball”. In fact what I had said was that The IMF (actually our Finance Minister Tharman) had called the new loan commitment a “firewall”. In Tharman’s own words:
“We all agreed that it was absolutely essential to have the firewall built up at this time. It’s not a day too early to be building up the firewall,”
I pointed out that the commonly understood definition of a firewall was to construct a scorched earth perimeter around a fire to stop it spreading. This was precisely what the new loan commitments were supposed to do, i.e. they were resources to be sacrificed to save the world financial system. To quote Christine Lagarde (see here):
“These resources are being made available for crisis prevention and resolution and to meet the potential financing needs of all IMF members,” Lagarde stated. “They will be drawn only if they are needed, and if drawn, will be refunded with interest.”
The judges said that the sheer risk inherent in an asset could not turn it into a liability. However they misconstrued my argument. I was arguing that the commitment to make a loan to the IMF was a liability. If properly accounted for, it would have a negative value on the government’s (including MAS’s) balance sheet not only because there was likely to be a negative spread between the cost of funding that loan and the zero interest that would be earned on it but also because of the risk that by the time the IMF drew down the loan both the creditworthiness of the IMF as well as global credit conditions could have substantially worsened.
The judges went on to misinterpret the first sentence of the passage from the FDIC manual that I quoted, which states “In reviewing individual credit lines, all of a customer’s borrowing arrangements with the bank (e.g. direct loans, letters of credit and loan commitments) should be considered” as referring to the customer’s contingent liability. Yet clearly the examiners are referring to the contingent liability of the bank and not the customer. This can be seen further on in the passage which states “Additionally, many of the factors analysed in evaluating a direct loan…are also applicable to the evaluation of such contingent liabilities as letters of credit and loan commitments. When analysing these off-balance sheet lending activities, examiners should evaluate the probability of draws under the arrangements and whether an allowance adequately reflects the risks inherent in off-balance sheet lending activities”. Clearly from the context the manual is talking about the contingent liability of the bank making these loan commitments and whether the allowance that should be made adequately covers the risks. The allowance would appear on the liability side of the bank’s balance sheet and reflect the possibility of loss if the loan is drawn down.
That the judges get wrong something so basic here undermines their claim that their selective interpretation of Article 144 is correct.
To conclude, while the judges accuse me of trying to draw a tenuous connection between a loan commitment and a guarantee, it is the judges who have tried any stratagem, no matter how tenuous and lacking in logic, to avoid having to deal with my arguments. To claim that Singapore follows a different set of accounting standards from the rest of the world will make Singapore a laughing stock globally. Furthermore the fact that the Finance Minister has only survived this court challenge by relying on such a perverse refutation of generally accepted accounting principles makes it clear that Euromoney made an egregious mistake in naming him Finance Minister of the Year 2013. Tharman should be grateful that the judgement was not announced till November 2013, just after the Euromoney award.
In addition the government has had since 1997, when the government’s ability to make loans without getting Parliamentary and Presidential approval was first questioned, to amend Article 144 so that the meaning supports their interpretation. They have failed to so. This is because having ambiguously worded legislation or very widely drawn powers without any checks and balances, as is the case with the Broadcasting Act, suits their purposes and gives them the widest possible leeway in interpretation. However such ambiguity and wide discretion given to Ministers without the possibility of appeal to an independent party is incompatible with the rule of law.
“The Appellant does not have the locus standi to challenge Art 144″
I am not a lawyer so I will make my remarks here brief. The ruling on locus standi effectively puts the government beyond the law except for the most “egregious” breaches. This nevertheless marks a slight advance on the original judge’s ruling that Singaporeans had no right to sue the government unless their private rights had been breached.
Let us leave aside for the moment the question of whether I had suffered damage as a result of my public rights being violated. I argued that as a CPF holder and taxpayer I have suffered damage as a result of the government making a loss-making loan commitment to the IMF.
However the fact that this case involved an alleged unlawful loan commitment of $5 billion and a breach of the Constitution begs the question of what would the judges would define as a breach of the law of sufficient gravity to allow a citizen to sue. The basis of rule of law is that it does not leave discretion in the hands of bureaucrats. By leaving it to the judges to decide on a case-by-case basis what is a flagrant breach of the law surely seems to be admitting that the judiciary are susceptible to political pressure. Will a flagrant breach be different for a PAP government from a future Opposition one? And citing former CJ Chan Sek Kheong’s “green-light” theory of administrative law reduces the judiciary to being merely an arm of the executive, there to facilitate executive decisions rather than act as a check on the executive.
It is a pity that our judges believe that following the way English administrative law has developed since 1977 and applying the “sufficient interest” test would “seriously curtail the efficiency of the executive in practising good governance”. They even go beyond CJ Chan who leaves an avenue for the courts to intervene when the state breaks the law by saying that “the courts can play their role in promoting the public interest by applying a more discriminating test of locus standi to balance the rights of the individual and the rights of the state in the implementation of sound policies in a lawful manner”. Now the appeal judges are saying has to be “extremely exceptional instances of very grave and serious breaches of legality” to warrant allowing an action by an individual in the public interest. Yet the example they cite, of a Cabinet Minister’s abuse of his powers as opposed to the actions of a low-level government officer, is surely engaged here. Even in the case where a low-level government officer breached the Constitution, the Auditor-General considered the issue of sufficient seriousness to make the Ministry of Finance go back and get the President’s approval for the issue of promissory notes in the relatively insignificant amount of US$16 million to the International Development Agency!
The judges also devoted a lot of paragraphs to precedents from the UK about how the courts there have not allowed judicial reviews of the discretion applied by government agencies such as the Inland Revenue in how they deal with classes of taxpayers. However that is irrelevant to the current action, which is concerned with a breach of the Constitution by the Finance Minister. It seems that the judges were clutching at straws in an effort to make their stance on locus standi seem not too far out of step with the UK.
The judges’ argument that Parliament or the President would have intervened if there was a serious breach of legality rather begs the question of how Parliament is meant to intervene in cases in which the Minister is alleged to have broken the constitution by bypassing Parliament. And where the ruling Party has over 90% of the seats despite only winning 60% of the votes and until 2011 won a walkover at every election it is difficult to understand how Parliament can be an effective check on the executive.
As for the President, he failed to intervene in the case of the IDA promissory notes until the Auditor-General pointed out that MOF had breached the Constitution. The judges say that the President could have used Article 100 of the Constitution to convene an advisory tribunal of three judges to consider this question and the fact that he did not choose to do so supports their contention that I should be denied standing. However JBJ requested that the then President convene a tribunal in 1997 to decide the same question and he declined to do so. If the government chooses to bypass getting Presidential approval then the President is unlikely to make a fuss. We are all aware of what happened to Ong Teng Cheong and his decision not to run for a second term after his requests for greater transparency were rebuffed.
My aim in bringing this case was to ensure that we had tighter financial controls over what the government does with our money and to prevent it squandering the huge surpluses it has extracted from the people through bad investments, influence-buying exercises and excessive compensation for the managers. This is a government that would rather give away your money to foreigners than see it spent on your welfare. Ironically the President’s only financial controls are to prevent spending from the reserves on Singaporeans. On the basis of this ruling there is nothing he can do to prevent the money being given away in the form of loans. In a climate where the PAP government is already under scrutiny for banking secrecy, a ruling that we have no ways of controlling a rogue government that breaches the Constitution shows that we have no standards of governance and no rule of law. It is inexplicable how Singapore can be rated one of the most transparent and least corrupt countries when there are such glaring loopholes in financial controls. The judges say that allowances should be made for the cases of the most serious illegality. However in practice, given the award of costs to the AG, this judgement will have a chilling effect on the willingness of citizens to act as watchdogs of the public interest and gives a “green light” to government illegality.
On Friday the Financial Times carried an excellent article by the eminent and long-standing economic commentator, Samuel Brittan. I have reproduced a screenshot of his article above. I remember as a student at Cambridge, always looking forward to his articles which came out every Monday.
In this article he talks about economists having “an excessive preoccupation with real gross national or gross domestic product.” He goes on to say that “promoting GDP at all costs would be an insane objective for long-term economic policy. GDP would be maximised by opening a country’s frontiers and promoting mass immigration…so long as there is a net addition to the labour force, the country’s GDP would almost certainly rise, however overcrowded and unbearable the country might be to inhabit.”
Wow- is he talking about us? Clearly Sam Brittan considers that such a policy would be so patently ridiculous that it can serve as what in logic is called a “reductio ad absurdum”. His words perfectly describe the policies pursued by the PAP government in Singapore and echo much of what I have been saying in Singapore since 2009 except I tend to self-censor and Mr Britten doesn’t feel that need. In the 1990s Singapore began to open the floodgates to the import of labour from Asian low-income countries, nearly doubling our population. As I keep telling you, this has resulted in real wage stagnation for the bulk of the working population and declines for those in the bottom quartile. Particularly because our work force isn’t protected by a minimum wage so wages can keep getting lower and we enjoy minimal labour protections.
Meanwhile returns have soared for the owners of fixed factors of productions such as owners of land and property. This has produced a bonanza for the government which owns nearly 80% of the land. As everyone reading my blog should know by now the majority of Singaporeans do not own property. We have no property owning middle class so no property owning democracy. 90% of us live in public housing leased for 99 years from the government. This sector has seen housing costs rise much faster than incomes while the average size of apartments built by the monopoly state housing supplier has been cut by close to 20%. The rising cost of housing keeps young couples from getting on the ladder clearly affecting our fertility rates and the PAP openly uses its control over the estates’ freeholds as leverage during elections by threatening to withhold refurbishment and upgrading.
The government is making all this money from the influx to the population but doesn’t use it to improve the infrastructure let alone our daily lives Opening the floodgates means that public infrastructure and amenities, such as the transport system, become ever more overcrowded while waiting lines to see doctors at government clinics have lengthened to several hours. A shortage of beds at government-owned hospitals means that patients often to wait hours or days before being admitted. Until recently lack of school buildings meant that most schools had to serve two sittings to accommodate pupils. Luckily there are few of these double-session schools left.
When these policies are questioned, the PAP government usually responds with the fallacious argument that if Singaporeans oppose curbs on foreign labour then they will have to put up with slower economic growth without any explanation as to how faster economic growth, which has so far failed to produce rising real incomes, will work differently in the future. The people are often told that they need to endure short-term pain for the sake of long-term gain, a consistent cliché in the government’s rhetoric since the 1980s. Yet the pain seems to always be the people’s while the gains accrue to government ministers, who justify higher pay and bonuses on the basis of the economic growth that they have “miraculously” generated. Private property owners are a rare elite who also prosper.
These “insane” policies, which would be rejected by the people in any country with free and fair elections, have had the desired effect of boosting not only GDP growth but also that of GDP per capita. On this measure, Singapore is now one of the highest-ranked countries in the world (though if it is ranked more correctly against comparable global cities such as New York, London, Paris or Tokyo its record even on this measure is far less impressive). This is largely due to the fact that the immigrants have increased the ratio of the employed labour force to total population, since they bring no dependents with them and will be immediately sent home should they lose their jobs. The human rights cost as the imported labourers enjoy almost no protections is also not insignificant.
Samuel Brittan suggests that a less bad approximation would be GDP per worker “but even that borders on the absurd-for it might be maximised by compulsory increases in working hours at the expense of leisure”. It is no coincidence that Singapore has the highest number of hours worked per person employed among 20 advanced countries according to the US Bureau of Labour Statistics. While increases in working hours are not compulsory de jure they become de facto compulsory as with no minimum wage and very few curbs on imported labour Singaporean workers are acutely aware that they can easily be replaced by foreign imports. Very long working hours boost Singapore’s GDP per worker though the effect is not as marked as at the GDP per capita level.
I suggest that a better proxy for comparisons between countries would be GDP per hour worked, or productivity. On this measure Singapore ranks near the bottom of twenty advanced countries previously surveyed by the BLS and now by the US Conference Board. While US GDP per hour worked has grown by nearly 6% since 2007, or 1.1% p.a., Singapore’s has only just recovered to its 2007 level.
To illustrate the disconnect between the PAP government’s policies and the people’s welfare, a UBS survey in 2009, comparing global cities, put Singaporean median workers’ wages on a par with those in Kuala Lumpur and far behind those of workers in Taipei, Seoul, Hong Kong and Tokyo. The UBS survey was much criticised by the government. However in the following year Singapore was dropped quietly from the survey which seems hard to justify given that Kuala Lumpur and other Asian cities continue to be included.
Singapore’s example shows how an authoritarian state capitalist government can win plaudits from a largely ignorant international audience by adopting insane objectives that ignore the welfare of its own people. Back in the 1950s Western commentators were similarly dazzled by the seemingly inexorable rise of the Soviet Union and we all know what happened to that.
The guys from WordPress.com stats prepared some stats for me which I am sharing with you. Sadly November, December and January have been largely inactive due to IMF appeal work and holidays. Happy New Year everyone!
Here’s an excerpt:
19,000 people fit into the new Barclays Center to see Jay-Z perform. This blog was viewed about 150,000 times in 2012. If it were a concert at the Barclays Center, it would take about 5 sold-out performances for that many people to see it.
On 28 June 2012 I wrote to Christine Lagarde, Managing Director of the IMF (http://sonofadud.com/2012/07/01/an-open-letter-to-christine-lagarde-managing-director-of-the-imf/). In the letter I warned her of the consequences for the future of democracy of trampling on the constitutional rights of Singaporeans for the sake of expediency in obtaining commitments to the IMF’s new global firewall.
I then challenged Singapore’s loan to the IMF in the courts as a last resort after a protracted period when the President and the Minister of Finance refused to respond to my perfectly reasonable letters.
On 22 October 2012 Justice Tan issued a judgement in my suit which must be of grave concern not only to all citizens of Singapore but to citizens fighting for democracy wherever they happen to live.
Let us not forget that the amount of money being loaned to the IMF by Singapore is at $5 billion dollars, more than the entire health budget allocated to all of our citizens for the year 2012 and is substantially more than three times the per capita contributions from Australia and the UK. There was no debate on the loan in our virtual one party parliament.
Prior to the judgement, Eugene Tan, a Nominated Member of Parliament, was quoted on 18 July 2012 in an Australian radio broadcast (http://www.radioaustralia.net.au/international/radio/program/asia-pacific/singapores-fourbillion-dollar-loan-to-imf-challenged-in-court/982490) as saying about the action:
“It would also ensure that Singaporeans who are concerned with certain decisions on policy of the government, you know, have an avenue by which they could challenge it, in a process that would be seen as democratic in way that would engender greater confidence and trust within the whole system of governance that we have in Singapore”
The learned judge has, in dismissing my application for judicial review, has effectively closed that avenue. It is a move which prompted a prominent local legal blogger to write that it was the “the day the constitution died”, (http://article14.blogspot.co.uk/2012/10/the-day-constitution-died-again.html).
This judgement should be of concern to all citizens of Singapore.
This is because the Court held that I had no right to bring a constitutional challenge in respect of an alleged breach by the Government and Monetary Authority of Singapore of Article 144 of the Constitution in giving a loan to the IMF without either the Parliamentary or Presidential approval specified in Article 144.
It is crucial to distinguish the two reasons why my challenge was dismissed. Most importantly, it was dismissed because I could not show any special damage flowing from a breach of Article 144. The Court therefore implicitly held that even if, in its view, I had made out an arguable case it would still have rejected it.
My case was also dismissed because the words in Article 144 ‘no guarantee or loan given or raised’ did not mean what they appear to say but, rather, meant ‘no guarantee given’ or ‘no loan raised’. On that reasoning, if a loan was given as opposed to being raised this fell outside Article 144 and so such loan – however precarious, however improvident – did not require the constitutional protections afforded by Parliamentary or Presidential oversight.
This short summary, which I will now expand upon, explains why I make this appeal for donations.
No right to challenge the constitutionality of a breach of Article 144
The learned judge did not refer to a clear authority from any court in Singapore to endorse the proposition that a constitutional change to a provision of the Constitution that has no relationship with private law rights can only be challenged if special damage is proved.
If the Court is correct, it means that although Singapore purports to be a democracy with a constitutional separation of powers, there is in truth no means by which a citizen can challenge a provision in reliance on a constitutional provision such as Article 144.
A moment’s reflection suggests that this is unlikely to be correct. Assuming it to be a requirement that special damage has to be established to bring some forms of constitutional challenges, it does not follow that special damage must be proved where breach of a constitutional provision affects all citizens equally and as a matter solely of public law illegality.
If the Court is correct it matters not how blatant, how transparent or how deliberate the breach of such a constitutional provision is; the simple and inescapable consequence is that no citizen may challenge it.
Such a conclusion does not sit easily with a country that, at least in the eyes of the West, aspires to be thought of as a democracy and I believe that on this point at least there are good prospects that the Court of Appeal would not uphold the judgement of the single judge.
Article 144 applies to the giving of a loan
My case was rejected because the court decided to give a purposive interpretation to the words of Article 144.
However, I believe that a purposive approach reinforces rather than weakens my argument.
Put shortly, the purpose of Article 144 is to safeguard the citizen against the creation of substantive liabilities by requiring Parliamentary and Presidential oversight before such liabilities may be created.
The court held that a loan was a benefit rather than a liability. But this does not grapple with the fact that many loans may, in substance (and sometimes in form) constitute a liability.
An IMF loan commitment is akin to a guarantee or a standby letter of credit that Singapore will lend money to the IMF when it has exhausted its borrowings from other sources. In this respect, there is no material difference between this and a bank providing a company with a standby letter of credit that in the event that it is no longer able to borrow in the short-term credit markets, the bank will step in and provide funding. This cannot sensibly be distinguished from a guarantee that is given or a loan that is raised which are undoubtedly within the scope of Article 144.
In my letter to Christine Lagarde, I said that in a robust democracy a government does not hide behind technicalities and dispense with the need to make itself accountable to the people. Unfortunately, by his ruling, the learned judge has enabled the government to do just that.
A note on the Appeal and Costs
The learned judge also saw fit to dismiss my application with costs awarded to the AG. As you all know I took this action as a private citizen, an ordinary Singaporean with CPF savings contributing to the central pool. In this respect although acting on behalf of all of us in the public interest, I have shouldered the costs of this action so far entirely from my own pocket. This was only possible with M. Ravi and his team offering their services Pro Bono. I am now faced with the AG’s costs as well.
I have been asked whether I plan to appeal. The fact is that even with continued Pro Bono legal support, I will certainly be unable to fund the costs of an appeal on my own, however good the grounds. Whether I appeal or not will depend on the public.
I also need help with the costs of the action so far. I therefore ask all Singaporeans who are concerned about the erosion of their constitutional rights and who want to see the government held fully accountable for its actions, to make a donation.
As this is not a political campaign, non-Singaporeans can also donate money. No donation is too small, even the price of a Starbucks or a meal in a hawker centre.
We need to raise a minimum of $ 20,000 to provide security for costs and to pay our lawyers if we are to launch an appeal. Payment can be made to the PayPal account in my name, using my email address firstname.lastname@example.org:
Alternative you can send a cheque made out in the name of Kenneth Jeyaretnam – to the office of Violet Netto:
L F VIOLET NETTO
101 Upper Cross Street
#05-13 People’s Park Centre
Please do not send money directly to the lawyers due to strict regulations governing legal fees and income.
The account will be closed once the target is reached and should there be any excess this will be donated to charity.
Roach Motel Or Investing for the Long-Term: You Decide What Best Describes Temasek’s Investment Strategy.
A “Roach Motel”, originally a term used to describe a cockroach trap, has become a metaphor used by hedge fund managers to describe an investment that is too large in relation to the size of the company’s equity capital or the liquidity of the stock to allow the manager to exit without taking an unacceptable loss. For better or worse, the manager is locked into the stake and the only exit is normally either through a sale of the company, which is fine as long as a price higher than the entry price is achieved, or else through bankruptcy and the loss of the entire investment.
Roach motels sprang to mind when I read this morning that Temasek Holdings is selling a 2.5% stake, or 400 million shares in SingTel with the option to sell another 100 million shares
Read the rest of this entry
IN THE SUPREME COURT OF THE REPUBLIC OF SINGAPORE
IN THE HIGH COURT
BEFORE THE SENIOR ASSISTANT REGISTRAR YEONG ZEE KIN
TUESDAY, 21 AUG 2012, AT 9:00 AM, CHAMBER 2-6
9. OS657/2012 KENNETH ANDREW
(L F VIOLET NETTO)
S CHAMBERS (CIVIL
FOR LEAVE TO APPLY
FOR A QUASHING
So, the pre-trial conference for my case to request a quashing order on the IMF loan listed for Tuesday morning, is now in the public arena. The AG has taken what I am told is an unusual step in ‘choping’ the 9:00 am slot. Apparently the more usual form or procedure is to turn up and get in line for a time slot. My guess is that they don’t want any Press hanging around and want to get in and out as quickly as possible. Then again they may just be hoping that the early bird avoids the Wong. That is the Law Society’s Mr. Wong who has a habit of turning up whenever M. Ravi is due in Court or even Chambers. Actually, to be fair to the poor misguided soul, he has given a verbal assurance that he will stop stalking us in future.
With National Day fresh in our minds it is timely to have a quick recap. The PAP may be able to recite the National Pledge but they are oblivious to the meaning of the words and clearly not a one of them understands what ” Democracy” means.
Singapore is a peaceful country. We are not situated in a war-torn region; Singaporeans live within ASEAN (Association of South East Asian Nations), a group of peace-loving nations. The government should lay aside the “siege mentality” with regard to defence. I agree peace should not be taken for granted. However too much of our budget is spent on defence. Defence spending should be reduced and more money channelled to help the marginalised like Mental Patients, Ex-convicts, Handicapped, Bankrupts. (MPECHB). I call this group in short, using the acronyms, MPECHB.
There is lot of publicity about the “Yellow-Ribbon Project”. However, how far does it help the Ex-convicts? Are there enough jobs to go around for them. Are the ex-convicts confined to certain menial jobs like cleaners, movers and etc? Ex-convicts who have served time in prison have paid for their crime. They shouldn’t be discriminated against by employers who demand to know on job application forms whether they are ex-convicts.
Another group persecuted by Employers are the Bankrupts. Often, job application forms demand to know if a person is an “Undischarged” Bankrupt. These bankrupts who already face financial difficulties will be denied of a job if they admit to it in most likelihood. So how are they going to redeem themselves?
13. OS657/2012 KENNETH ANDREW
(L F VIOLET NETTO)
ATTORNEY GENERAL FOR LEAVE TO APPLY
FOR A QUASHING
The following is a transcript of a Press statement that I read out at yesterday’s Press Conference which was held in a boardroom at M. Ravi’s office. Thank you to all the Press who attended in person, representing TOC, Mediacorp, States Times, Zaobao, Shin Min and Publichouse and all those who have been in contact by phone or email. M Ravi’s office will keep us posted as soon as we have a timetable for hearings and I will post that here.
Obviously as the matter is now in front of the courts or ‘sub judice” and I began by warning about Contempt of Court , questions were subdued. If readers have any queries just post them here and If I can I will answer them. I don’t expect the Mainstream media to actually report on anything but despite that we all felt it was a good first step.
I would like to thank M Ravi and his staff for all their help and professionalism particularly when M Ravi is so busy with some other major cases. Singapore could do with three or four more like him.
Whilst I continue with my attempts to hold the MOF up to proper scrutiny, we must not forget the discrepancies in our Budget. I have decided to make the following exchange of correspondence available as a public service and an exercise in transparency. It is in chronological order but those of you who find it a bit dull may wish to skip to the end. There I discover another discrepancy and I am still awaiting a response. Unfortunately the Statistics Department have become ominously silent since I drew it to their attention five days ago.
A bit of context:
In February I produced a response to the government’s Budget 2012 in my role as SG of RP.(http://thereformparty.net/about/press-releases/budget-2012-part-one/ ) Naturally this was not published in the MSM or even on TOC. The MSM is a political tool used to isolate me and make the Party look inactive. As for TOC, I guess the editor Ravi Philemon preferred to give prominence to the pro -PAP budget responses of his friends in his usual partisan manner.
I pointed out that the Budget was not set out according to the Special Data Dissemination Standards of the IMF and that vital information was missing, particularly concerning the state of the reserves invested in our SWFs, Temasek and GIC.
After I looked at the government’s Statements of Assets and Liabilities dating back to 2004, I was particularly concerned that the net assets, (after subtracting from total assets government debt held by CPF as well as amounts needed to fund government pension funds and other educational and medical funds) , was much lower than to be expected given the advertised returns of Temasek and GIC as well as the limited information that was available to me on the general government surpluses from 2004 to 2010 from the Yearbook of Statistics.
In order to confirm my suspicions that there were serious discrepancies I wrote to the Statistics Department on 23rd May 2012.
Enquiry sent on:-5/23/2012 4:22:53 PM
Name :Kenneth Jeyaretnam
Organisation :The Reform Party
Nature of Business :Non-Government Organisation
Purpose of Obtaining Data :Internal Research and Analysis
Type of Occupation :Economist
Query :General Government Finance
Years Selected :2005, 2006, 2007, 2008, 2009, 2000, 2001, 2002, 2003, 2004, 1996, 1997, 1998, 1999
Type of Business Statistics :
Types of Industry/Activity :
I received this response.
Dear Mr Jeyaretnam,
We refer to your request of 23 May 2012.
The data breakdowns for General Government Finance are as follows:
|Deficit (-) or Surplus 1|
|Total Revenue and Grants|
|Expenditure & Lending minus Repayments|
|Lending minus Repayments|
|From Monetary Authorities|
|From Deposit Money Banks|
|Other Domestic Financing|
|Notes : Presentation format of the table follows that of the National Summary Data Page (NSDP) for Singapore, which disseminates|
|the data prescribed by the International Monetary Fund’s Special Data Dissemination Standards (SDDS). Data in the table|
|represent a broader definition of Government revenues and receipts than what are permissible for Government spending|
|as presented in each year’s Budget Statement. This is because some revenues and receipts accrue to the Government’s past reserves,|
|which cannot be drawn on without the approval of the President.|
|General government finance includes budgetary and extra-budgetary accounts.|
|Data refer to the financial year which begins in April of the current year and ends in March of the following year.|
|1||Accrues to both current and past reserves and does not reflect budget position of the government.|
|2||Includes land sales and capital receipts (which accrue primarily to past reserves) in addition to taxes and other revenues.|
The data breakdowns for Government Finance are as follows:
We would appreciate it if you could let us know the annual data series you require so that we could check on the data availability and compute the appropriate charge.
Lue Poh Choo (Ms)
Singapore Department of Statistics
I wrote back on 24th May 2012:
Strictly you have not given me any data merely the format in which it is presented. I would like all the data for both categories General Government Finance and Government Finance for the period requested.
Please let me know what will be the cost ASAP.
Their response the same day was as follows:
Dear Mr Jeyaretnam,
We refer to your email of 24 May 2012.
Our Department is able to provide the following annual data series, for your internal research and analysis, at $49.60:
General Government Finance
|Deficit (-) or Surplus 1||
|Total Revenue and Grants||
|Expenditure & Lending minus Repayments||
|Lending minus Repayments||
|From Monetary Authorities||
|From Deposit Money Banks||
|Other Domestic Financing||
|earliest available||latest available|
|Deficit (-) or Surplus 1||1986||2011|
|Total Revenue and Grants||1986||2011|
|Expenditure & Lending minus Repayments||1986||2011|
|Lending minus Repayments||1986||2011|
|Total Net Borrowing||1986||2011|
|Use of Cash Balances||1986||2011|
If you are interested in obtaining the data, please proceed to make payment online viahttp://www.singstat.gov.sg/svcs/payment.html . Please quote your bill reference number (QG25660) when you make payment online. We will send the data to you once we have received the appropriate amount. Thank you.
Wong Pui Mun (Ms)
Singapore Department of Statistics
I replied as follows, again on the same day:
Thank you for your response.
This is very poor. Why can’t I get data from earlier than 1998 for General Government Finance? It’s not as though the government does not have records. What is it trying to hide?
Almost all the data you are proposing to sell me can be obtained online and from past copies of the Yearbook of Statistics so if this is the best you can do I must decline. Also why should citizens and political parties pay for information that should be freely available?
On 25th May I received the following reply:
Dear Mr Jeyaretnam,
Please refer to your email of 24 May 2012.
We would like to clarify that we were unable to provide you with data for 1980 – 1997 as these are not available in our database. We have since checked from other data sources for the data series for 1980 to 1997.
As requested, I attach the following General Government Finance data series for 1980-2010 :
- a. 1980-1997 (please see attached file)
- b. 1998-2003 (please see scanned page1 )
- c. 2004-2009 (please see scanned page 2) and
- d. 2010 (please see attached file)
Wong Pui Mun (Ms)
Singapore Department of Statistics
I wrote back to thank the Statistics Department for their hard work on 26th May:
Based on the information supplied I then wrote to the Finance Minister on 1st June 2012 with some questions but have yet to receive a reply or even an acknowledgement. That letter is on this blog and has been reproduced here and there so I won’t repost it.
Using the information supplied by the Statistics Department as well as the IMF data given me by Chris Balding I calculated that the total general government surpluses amounted to some $429 billion since 1980 whereas our net assets in the SAL were shown as at 31st March 2011 to be about $288 billion. This is bad enough. However, if GIC and Temasek’s claimed returns are not in the surpluses, as Chris Balding believes and has stated then the discrepancies would be truly astronomical.
My next piece of forensic work was to look at the government’s Operational Surplus going as far back as possible to try to isolate the part of the surplus which was due to the SWFs as well as receipts from land sales.
On 2 June 2012 I wrote to the Statistics Department as follows:
Would you be able to email me the data for 17.3, 17.4 and 17.5 dating back to 1970 [Tables in the Yearbook] or thereabouts? If you don’t have data earlier than 1980 that’s fine also. Also can you extend the data for 17.1 further back in time?
I really appreciate the hard work you are doing.
On 4th June 2012 I received the following response:
Dear Mr Jeyaretnam,
We refer to your email of 2 Jun 2012.
We are looking into your request and will respond to you.
Wong Pui Mun (Ms)
Singapore Department of Statistics
My response of 4th June:
Thank you. Much appreciated.
On 13th June the Statistics Department replied with the requested data:
Dear Mr Jeyaretnam,
We refer to your email of 2 Jun 2012. The available data for the requested tables (based on calendar years) are attached below.
Government Operating Revenue
Government Operating Expenditure
Government Developing Expenditure
Wong Pui Mun (Ms)
Singapore Department of Statistics
After I noticed a discrepancy with regard to Operating Revenue I wrote to the Statistics Department on 22nd June pointing this out and requesting an explanation:
Dear Ms. Wong,
Thank you very much for your help in this matter.
I have come across a discrepancy between the figure for 1999 for Operating Revenue given in the YoS 2000 and YoS 2005 extracts supplied by you. In 2000 it is given as 28,619.2 ($ millions) and in the 2005 extract the figure is given as 25,597.3.
Would you very kindly be able to shed some light on this discrepancy?
So far I have yet to receive a reply. I hope there is a simple explanation for it.
In addition I have now been able to do some more work on the figures supplied to me by the Statistics Department and hope to be able to make public my conclusions in the next few days. At the moment I have to say it is not looking good…
Everyone should read this blogger’s latest piece on the constitutionality of the IMF loan and his earlier blog to be found here:
I am very glad that at least one opposition politician, Kenneth Jeyaretnam, is actively pursuing this issue. Based on the response that he has gotten from the President, it is evident that the President’s consent was not sought. Kenneth Jeyaretnam has set out in detail the sequence of events leading up to the President’s response:
I don’t know who Subra is in real life but he describes himself as a lecturer in law ”A Singaporean firmly believing in Liberty, Freedom of Expression and a system of government based on checks and balances.” He not only proclaims a belief in these ideals but unlike our politicians he clearly backs it up with action.
I’m not sure that I agree with his conclusion, after all it is no longer 1997 and the IMF loan is not between us and Indonesia but involves IMF with proscribed standards on transparency which we do not follow. IMF will not be able to act with the contempt that MOF does.
However he points out the method of discrediting my father back then with the PAP accusing him of ”misrepresenting” and mocking or ridiculing him . This is almost exactly the same as the method used by MICA in 2012 in their swift responses to my absolutely accurate letter in the WSJ. Notice in that letter they accuse me of “misrepresenting” and then ridicule me by pointing out, wholly unnecessarily, that the political party I stood for in GE 2011 failed to gain any seats. This was just a method to discredit me.
I seem to remember then that Subra blogged on the MICA rebuttal and pointed out that I was correct and MICA was wrong. Of course MICA know I was right and they were wrong but that was not the point. I have written to WSJ putting my case and denying misrepresentation but I guess their lawyers are afraid and so they haven’t printed it.
For the record I will state that I stand by everything I wrote in that letter, MICA are wrong and if they disagree then let them sue me. Does it matter? Yes. The accusations to destroy my credibility added to by ridicule were a pre- emptive strike by the PAP as my response to the budget 2012 was already out there. Also they can now show it to the IMF and say, ” This is a guy who gets everything wrong and is bitter and twisted about losing. See! We already had to rebuke hm once.”
I will come back to Subra’s conclusion later meanwhile it is worth noting that both Subra and I were blogging about this in April, we don’t know each other or communicate just as Chris Balding and I were independently working on the same thing , “discrepancies”, also without knowing or being aware of each other. What does this tell you? Coincidence?
My budget 2012 response is out there, still buried by the MSM, still not responded to by MOF. Thank goodness for cyberspace.
Kenneth is a lone voice lost in the wilderness of the internet. His questions are not being echoed in the mainstream media and the only persons that may be privy to this issue are those that take the effort to get information from the net.