Yesterday I read the astonishing news that Temasek’s General Counsel, Pek Siok Lan, had apparently blown $5.5 m in a fraudulent nickel trading scam.

This immediately raises several concerns. First how did one of the most senior members of Temasek’s management fall victim to a scam that should have rung alarm bells in even the most unsophisticated retail investor’s mind? The alleged fraudster, Ng  Yu Zhi, was promising investors guaranteed returns of 15% over a three month period, a staggering return when global interest rates are close to zero. A sophisticated fraudster like Bernie Madoff did not promise 15% returns but lured investors in with consistent supposed high single-digit yields but with low volatility. So this grifter was hooking greedy rich people with money burning a hole in their pockets with the most brazen of lies.The old adage that if an investment return is too good to be true, then it generally isn’t, proven to be true time and time again, does not seem to have percolated the brain of Ms Pek when even a school kid should have seen the con. Fools,  soon, parting and money are words that spring to mind.

This leads to my second concern. As General Counsel at Temasek, Ms Pek plays a central role in compliance and due diligence checks.She would presumably be responsible for checking that investments by Temasek were above aboard and satisfied legal requirements and probably a central role in due diligence and risk. To quote Price Waterhouse UK:

In-house legal teams no longer simply provide advice, manage risk and ensure legal compliance. Today’s General Counsel (GC) is expected to help guide the business through times of change and meet commercial objectives, operating as a business enabler and an essential adviser to the board.

If Ms Pek was so gullible and indifferent to her own money, and so willing to be ensnared by a shady scheme that was undoubtedly marketed on the basis that it took advantage of legal or regulatory “arbitrage” (a euphemism for law breaking), what does that say about her ability to act as a steward of the nation’s reserves? How blasé was she in signing off on unwise and dubious investments by Temasek? It would be interesting to know if Ms Pek was alone or whether she or another Temasek board member brought other members of senior management in our sovereign wealth fund into the scam. If Ms Pek could so easily fall victim to an industrial scale scam involving her own money in amounts that most ordinary Singaporeans will have trouble comprehending then she is not a fit and proper person to be General Counsel and should be removed.

Secondly, what does this say about how our reserves are being managed? The Government keeps saying it has no money, the reserves have been depleted by the pandemic and need to be rebuilt and that taxes (which means regressive taxes on the poor like GST and not taxes on the privileged and politically connected like Ms Pek) need to go up. Yet I have calculated that, based on the size of the Net Investment Returns Contribution and the way the Constitution mandates how it is calculated, that the reserves should be at least $2.6 trillion and that does not even include the value of the land the Government owns (80% of Singapore). I have previously, on multiple occasions over several years going back to at least 2012, (see links below) voiced serious concerns that a large part of the reserves may have been lost through fraud, mismanagement or corruption. The fact that Ms Pek could so easily lose such a large sum (though maybe not to her), and not even through an investment loss but through the most basic of frauds,  should ring alarm bells about the true state of our reserves.

Thirdly, this is yet another demonstration of SIngapore’s fake “meritocracy”, which operates from the top down, with the Prime Minister as head of the Government appointing his wife to be head of Temasek despite mediocre qualifications and little evidence of ability outside the public sector, which in Singapore is the family business. People of Ms Pek’s star quality, undoubtedly selected on the basis of who they are related or married to or the colour of their skin and their loyalty to the ruling family rather than their ability, fill up the top ranks of not only Temasek but also GIC, MAS and every Government-linked company and statutory board. In addition to the egregious and undeserved appointment of Ho Ching, which made the current Governor of the Bank of England, my old friend from university Andfrew Bailey guffaw when I described it, I have written previously about Josephine Teo and her husband and the amazing ability of these members of the political elite to always land on their feet even when they are found out to be at the centre of the most shocking conflicts of interest.

Finally the fact that Ms Pek had so much money to invest that she was able without thinking twice to give $5.5 million to an out-and-out fraudster is a strong indication that the stories about Ho Ching pocketing $100 million a year are probably true. Presumably Ms Pek only “invested” a small portion of her liquid wealth to Mr Ng and had so much money burning a hole in her pocket that she was in a hurry to give it away. She is only General Counsel and on Temasek’s management chart is only in the fifth row, far below the gods in the first row (Ho Ching, Dilhan Pillay, Lee Theng Kiat and Chia  Song Hwee). The website does not even mention her qualifications, which is a strong indication that they are mediocre, and merely states that she has 25 years legal experience, most recently at ST Telemedia, a Temasek-owned company. She does not even appear to be a former Government scholar though given the quality of the other scholars, it would not be surprising if she was. Like Ho Ching, her whole career appears to have been spent in the public sector.

Singaporeans’ minds may boggle at the audacity and huge scale of the fraud that Ng is alleged to have perpetrated and the number of rich idiots he has ensnared. However the real confidence trick is the way SIngaporeans tolerate a small elite of mediocre and unintelligent people, who insult us with their claims to be selected on the basis of mediocrity, are able to help themselves to obscenely outsize amounts of money out of public funds, while insulting us with their hypocritical claims that they are living lives of noble sacrifice. It is a wonder that they are able to refrain from laughing at you as they greedily pocket billions of dollars. Animal Farm is alive and well in Singapore.

Links

Why Temasek? As a Vehicle to Allow the Lees to Secretly Extract Money?

Sherlock Holmes And The Case Of The Missing ( Or Merely Hidden) Reserves

Published by kjeyaretnam

I'm a Singaporean economist who became an opposition activist. I blog to provide an alternative to the porkies that the Pinkies tell. It just so happens that my alternative is the truth. That's why I've never been sued in any civil or criminal court no matter how hard hitting my criticism. I'm quoted and interviewed and asked to speak across the world but largely censored in Singapore in an effort to silence my political opinions. The left hate me because they think I split their vote and because I eschew their outmoded economic models. Models that don't work. The Right and the Conservatives hate me because I'm a liberal. I'm not sure what the middle think of me. I don't think there are more than a handful of people in the middle, here in Singapore. I'm a Singaporean born and bred, dual heritage, my parents Singaporean established here before the State of Singapore was created. I'm not Eurasian. I read economics at Cambridge and could be broadly described as from the Keynesian school but I believe in interventions. I was formerly a successful hedge fund manager. After economics and politics my greatest interests are history, film and Makan. I run but I run so I can eat like a Singaporean. View all posts by kjeyaretnam