Loading ...
Sorry, an error occurred while loading the content.

Fwd: MUST READ: PROF BALDING EXPLAINS HOW HE HAPPENED TO INVESTIGATE UNBELIEVABLE RETURNS AND ACCOUNTING FRAUDS OF CAR SCRATCHING LIEgime's SGIC AND TEMASEK HOLDINGS

Expand Messages
  • Robert Ho
    ... From: Robert HO Date: 15 February 2013 09:34 *Subject: MUST READ: PROF BALDING EXPLAINS HOW HE HAPPENED TO INVESTIGATE
    Message 1 of 1 , Sep 22, 2013
    • 0 Attachment


      ---------- Forwarded message ----------
      From: Robert HO <robert.ic019@...>
      Date: 15 February 2013 09:34

      Subject: MUST READ: PROF BALDING EXPLAINS HOW HE HAPPENED TO INVESTIGATE UNBELIEVABLE RETURNS AND ACCOUNTING FRAUDS OF CAR SCRATCHING LIEgime's SGIC AND TEMASEK HOLDINGS

      http://www.baldingsworld.com/

      How I Became Interested in Singapore

      Posted on February 15, 2013

      I am frequently asked how I became interested in Singapore and the unique case of Temasek Holdings and the Government of Singapore Investment Corporation (GIC).  Despite conspiracy theories in which I work for a hedge fund, the communist government of China, or those crazy American capitalists, the truth is much more boring.

      In 2007 and 2008, I worked at a think tank in Santa Monica, California and I became interested in sovereign wealth funds.  Headlines on sovereign wealth funds were exploding in the news with all nature of fear mongering about the potential for combining state political power with financial might.  Interested in understanding the behavior of sovereign wealth funds, like Temasek and GIC, rather than believing the news driven fear mongering headlines, I set out to assemble data that might would help us assess their investment patterns.  I subsequently spent many months pouring through data sources such as corporate filings, Securities and Exchange Commission records, my local Bloomberg terminal, and Thompson Datastream to assemble data that would provide me insight into their behavior.

      Published on an academic paper database in June 2008 with the sexy title “A Portfolio Analysis of Sovereign Wealth Funds”, it was covered in a variety of outlets such as theWall Street Journal among others.  Written with much rhetorical flourish, it contained such incendiary claims about Singapore as:

      Examining the public equity holdings of Temasek Holdings and the Government of Singapore Investment Corporation (GIC), both Singaporean sovereign wealth funds, for whom good records exist, their holdings indicate a conservative portfolio of global equities.

      …Singaporean SWF’s do not appear to assume risks other sophisticated investors do not also assume.

      …the Singaporean SWF private equity investment record seems both rational and respectable.

      While I understand that these claims were inflammatory to absolutely no one, given the data in 2008 they were entirely defensible and based on all available evidence at the time.  However, as John Maynard Keynes notes, “when the facts change, I change my mind.”

      In the spring of 2010, I began writing my book entitled Sovereign Wealth Funds: The New Intersection of Money and Power.  It was during this process having studied other sovereign wealth funds that I attempted to reconcile Temasek’s claim of having earned 17% annually since its inception in 1974.  Knowing the long term returns of stock markets and other major sovereign wealth funds averaged from 6-9% depending on the riskiness of their portfolio or their respective market, I was curious to find out more about what investment strategy SWF’s used to pull off such spectacular returns.  I then began by trying to find their investment strategy and holdings.

      I quickly realized that I could not come close to reconciling the 17% annual returns claimed by Temasek with either the broader market or individual holdings.  Of all the sovereign wealth funds I reviewed, Singapore and its respective funds were the onlyfunds with serious financial discrepancies.  For instance, those funds claim to earn a rate of return consistent with investments they are known to have held but also inflows and outflows could be reconciled such that there did not appear to be large differences.

      Singapore and its funds, Temasek and GIC, were the only instance I could find where serious discrepancies existed between a) the rate of return claimed by a sovereign wealth fund and the broader market b) the rate of return claimed by a sovereign wealth fund and individual investment holdings and c) the claimed assets under management, capital inflows, and claimed annualized returns.

      After discovering such a large discrepancy in Singapore, I looked hard at other funds and countries and simply could not find a discrepancy of a remotely similar magnitude.  And believe me I looked hard at other countries and funds.  The differences are well beyond anything that might be considered a rounding error or understandable difference.

      I never at any point set out to write extensively about Singapore it is only that its public finances simply cannot be explained or reconciled.  Given the inflows from public surpluses and borrowing for the purposes of investment as claimed by the government coupled with the claimed high rates of return, there simply should be a lot more money than is listed on the government balance sheets.  The government may be able to evade questions and concerns about their finances from someone like myself but they simply cannot avoid the laws of mathematics.

      It was simple academic curiosity of continuing to ask questions that drew me to study Singapore, Temasek, and GIC.  I am not connected to Singapore in anyway and have refused to be drawn into Singaporean politics or endorse politicians.  I will however continue to ask questions and try to find the truth of what has happened to the money lent by CPF account holders and the years of surpluses paid out in taxes by ordinary citizens.

      ---------- Forwarded message ----------
      From: Robert HO <robert.ic019@...>
      Date: 7 February 2013 15:50

      Subject: MUST READ: HK's SOUTH CHINA MORNING POST FIRST NEWSPAPER TO QUESTION TEMASEK FALSE RETURNS HIDING POSSIBLE LIE KY 2A1B famiLEE THEFT OF $1.3T


      ---------- Forwarded message ----------
      From: Robert HO <robert.ic019@...>
      Date: 2 August 2012 15:08

      Subject: MUST READ: HONG KONG's SOUTH CHINA MORNING POST FIRST NEWSPAPER TO QUESTION TEMASEK FALSE RETURNS HIDING POSSIBLE LIE KY 2A1B famiLEE THEFT OF $1.3T

      RH:  2 articles from [http://www.baldingsworld.com/] in PURPLE headlines and joined-up Comment posting of Jake van der Kamp's article in Hong Kong's South China Morning Post, posted in TRE [click], in ORANGE bolded:--

      South China Morning Post Questions Temasek Returns

      Posted on August 2, 2012

      Yesterday I received an email from a loyal reader that Jake van der Kamp, the well known columnist from the South China Morning Post wrote a column questioning the returns of Temasek.  Though I can’t find an ungated copy of the column and can’t repost the entire column, he makes a couple of great points about what Temasek is claiming.

      “If you were a private investment fund manager with this sort of record, you would have every investor in the world getting down on his knees to you and bowing every time you showed your face in public. You would be venerated as a deity. The world would be at your doorstep asking you to manage its money.”

      Investors today are lauded for much smaller returns much less keeping up 17% for 38 years.  I have been unable to find any other investor that claims to have earned a similar return over a similar time frame.  Furthermore, I cannot even find Temasek companies that earn the rates of return claimed by Temasek!!

      He goes on to say “And if Temasek’s touted total shareholder return is much, much higher than the overall Singapore market’s, it exceeds that of foreign markets by an even wider margin. If it’s a stretch to get to 17 per cent in Singapore investments since 1974, we are looking at new properties of the elastic band to see it in markets abroad.”  In other words, if Temasek beat the Singaporean market by such a wide amount it must beat foreign markets by a similarly large amount.

      However, as he notes “And then you get that byword for loss, Chartered Semiconductor, Singapore’s foray into the wafer fab business. Temasek finally rid itself of this deadweight but its loss in chasing yesterday’s technologies tomorrow was likely in the billions….Also timed injudiciously were investments in Merrill Lynch and Barclays Bank. The timing of the exits from these acquisitions was equally injudicious. I cannot quantify the losses, but informed opinion generally agrees the figure ran into the billions.”

      This means that Temasek’s winning investments must have earned significantly morethan 17% annually since 1974 to produce the types of returns they are claiming.  These are simply fantasy level returns.

      Given that the South China Morning Post has now broken the cone of silence around questioning Temasek and Singapore, I wonder if others in the major press outlets will also begin to question Singaporean numbers?

      ///////////////////////////

      Jake van der Kamp's article in TRE Comment:

      Temasek Holdings
      This one number stands out from all the others in the 2012 review highlights of Singapore’s sovereign wealth fund. Temasek claims that it has achieved an average total shareholder return of 17 per cent since inception in 1974, or 19 per cent in US dollar terms.


      In response to this claim I shall now enter my own cryptic statement:


      ?
      Let’s first get it straight what a 17 per cent annual total return gain means. It says that net profits on Temasek’s investments, taking in only market price appreciation and real capital gain plus interest and dividend income, was an average of 17 per cent of the market value of these investments across every year of the entire 38 years of this fund’s existence.


      Let’s put it another way. If you were a private investment fund manager with this sort of record, you would have every investor in the world getting down on his knees to you and bowing every time you showed your face in public. You would be venerated as a deity. The world would be at your doorstep asking you to manage its money.


      Take, for instance, that return figure of 19 per cent in US dollars. It implies that a US$100 investment on 1974 would be worth US$74,000 now. Yes, some people have done it in lotteries, I repeat, in lotteries. The figure implies that US$360 million invested in 1974 would be worth the entire gross domestic product of Singapore today.


      So let’s examine things a little more closely.


      It was only 10 years ago that Temasek started making investments outside of Singapore and by far the bulk of its portfolio is still in Singapore. We shall thus compare its 20-year record with the performance of the Singapore stock market. I have made this a 20-year comparison as I cannot immediately lay my hands on index data back to 1974.


      The chart shows you the result. Temasek claims a 15 per cent total shareholder return over the past 20 years. Assuming we started with S$100 in 1992, the Temasek gain would now stand at about $1,600. The Singapore market gives you only S$260.


      Of course, you can say that Temasek, being government, had its choice of the juiciest plums on the Singapore market and that is why it outperformed.


      It seems, however, to have picked the overripe ones. Going by a piece of recent research from Christopher Balding of the HSBC Business School in Shenzhen, the average annualised earnings per share growth of Temasek’s largest holding, Singapore Telecom, was -2 per cent between 1990 and 2010. Another great sluggard was Singapore Airlines with -1 per cent. Temasek owns 56 per cent of that one.


      And then you get that byword for loss, Chartered Semiconductor, Singapore’s foray into the wafer fab business. Temasek finally rid itself of this deadweight but its loss in chasing yesterday’s technologies tomorrow was likely in the billions.


      We therefore turn to the foreign forays, and one of the first names that comes up here is Shin Corporation, which was affiliated with Thai prime minister Thaksin Shinawatra, who then lost his job, to Temasek’s embarrassment.


      Also timed injudiciously were investments in Merrill Lynch and Barclays Bank. The timing of the exits from these acquisitions was equally injudicious. I cannot quantify the losses, but informed opinion generally agrees the figure ran into the billions.


      And if Temasek’s touted total shareholder return is much, much higher than the overall Singapore market’s, it exceeds that of foreign markets by an even wider margin. If it’s a stretch to get to 17 per cent in Singapore investments since 1974, we are looking at new properties of the elastic band to see it in markets abroad.


      So let’s just make it simple. I simply don’t believe it and I can’t imagine that any investment professional does. Prove it, fellas.


      Yes, dear investor, there is a tooth fairy.


      Temasek stretches more than our imagination with claim of stunning average shareholder return.


      JAKE’S VIEW
      Jake van der Kamp
      Jul 17, 2012

      South China Morning Post

      jake.vanderkamp@...



      The $158 billion Singapore Budget Accounting Fraud: Part I

      Posted on July 12, 2012

      In the past decade, we have become all to used to corporate accounting scandals.  Respected companies like Olympus, Lehman Brothers, AIG, and the most notorious fraudster Bernie Madoff have all been caught blatantly manipulating accounting statements dating back many years.  As a result of their behavior, those responsible lost their jobs or went to prison.

      What happens when arguably the largest accounting restatement in the history of human existence due to fraudulent accounting practice takes place in the Singaporean government?  Nothing.  Absolutely nothing.  No Singaporean public official to the best of my knowledge has even commented on a $158 billion SGD accounting restatement of Singaporean public finances.

      We have been working with official Singaporean general and operational budget revenue, expenditure, and surpluses.  The general and operational data comes from both Statistics Singapore and the International Monetary Fund.  The results of each type of government surplus while all different, all produce generally similar numbers regardless of source.

      Table 1-Singapore Cumulative Surpluses September 2011

      As we can see in Table 1, the Singaporean surpluses from all sources while quite large produce broadly similar numbers with a low of $225-300 billion SGD since 1990 whether we take our numbers from Statistics Singapore or the IMF September 2011 World Economic Outlook or their International Financial Statistics databases.

      However, in April 2012 the government of Singapore restated its public finance statistics going back to 1990.  Given the history and size of the restatement it would probably go back further and increase even more, but the IMF World Economic Outlook only provides Singaporean public finance data back to 1990.  The restatement of Singaporean public finances was not small, short, or insignificant in anyway.

      Table 2—Cumulative Surpluses April 2012

      Between September 2011 and April 2012, the government of Singapore restated its public finances raising it cumulative surplus from 1990 to 2010 from $271 billion SGD to $429 billion SGD.  Through an unannounced accounting restatement which Statistics Singapore data does not reflect, the cumulative surplus between 1990 and 2002 increased from $189 billion SGD to $311 billion SGD.  In other words, due to an accounting restatement of its own public finances, Singapore increased the size of its budget surplus by $158 billion SGD.

      While a restatement increasing the size of the Singaporean surplus may at first seem like a good thing, it is in fact not a good thing.  The last Singaporean balance sheet listed $705 billion SGD in assets but also $359 billion SGD in debt giving it only $346 billion SGD in net assets.  In other words, through the investment magic of Temasek Holdings and GIC, Singapore managed to turn $428 billion SGD in government surpluses into $346 billion SGD in net equity.  The larger the surpluses in Singapore means the larger the losses and discrepancies in Temasek and GIC.

      This restatement as a couple implications.  First, given the historical length and size of the accounting restatement, the government should be held accountable to provide detailed information about restated items.  $158 billion SGD restatements destroy any credibility and demand a public explanation.  Second, those responsible at the highest levels should be held accountable for accounting manipulation dating back more than twenty years.  $158 billion SGD is not an accounting rounding error.   A restatement of $158 billion is a deliberate manipulation.  Third, given the restatement, there is absolutely no way Temasek and GIC claims of long term returns can be considered accurate.  $428 billion SGD in surpluses does not turn into $346 billion in net equity by earning 7-17% over more than twenty years.

      For a government who claims to value accountability and transparency, its attempt to cover up a restatement of $158 billion SGD or approximately 50% of GDP is appalling.  At what point does a restatement become worthy of a public statement by the government: $300 billion, $500 billion, $1 trillion?  If Singapore was a company, people would deservedly have lost their jobs.  Only in Singapore is a $158 billion SGD accounting fraud standard operating procedure.

      Next week, I will detail the accounting restatement, provide examples of how accounting was manipulated by the government, and how this impacts the returns claimed by Temasek and GIC.

      19 Replies

      >>>>>>>>>>  TO HELP ME, COMPLETE THESE STATEMENTS, THANKS:  http://roberthorequestforstatements.blogspot.com/

      My wife, an accountant, then a manager in an MNC drawing a 5-figure salary before she retired, can confirm that I write the Truth in all these.  <<<<<<<<<<

      RH:   LKY LHL WKS ELECTION RIGGINGS EMAILED TO ALMOST ENTIRE GOVT:
      http://i-came-i-saw-i-solved-it.blogspot.com/2010/06/lky-lhl-wks-election-riggings-emailed.html

      ME ON VIDEO DESCRIBING lky lhl wks NUMEROUS ELECTION RIGGINGS + PoBoB and CCTV Ideas:
      http://i-came-i-saw-i-solved-it.blogspot.com/search/label/%22A%20Video%20RH%20on%20LKY%20LHL%20WKS%20cheating%20elections%20%2B%20PoBoB%20and%20CCTV%20Ideas%22

      http://www.youtube.com/watch?v=jQCab3QZbBk

      MY ACQUAINTANCE, MR DAVID DUCLOS, A FORMER POLICE INSPECTOR, AND HIS LAWYER FRIEND, EYEWITNESSED LEE KUAN YEW RIGGING THE 1997 CHENG SAN GRC ELECTION.  READ MORE AT MY BLOG ENTITLED "I CAME, I SAW, I SOLVED IT" : 

      b.  SWORN EXHIBIT IN SUPPORT OF AFFIDAVIT:

      c.  SOME LEGAL PRINCIPLES ON WHICH I GROUND MY CASE:

      d.  THE PATTERN OF CRIMINAL WRONGDOINGS THAT PROVES MY CASE;

      e.  3rd EMAIL TO UK PM FOR OBSTRUCTING, PERVERTING JUSTICE:

      "THE PRIMAL FEAR OF A SUPERIOR MIND"

      -- 
      >>>>>>>>>>  TO HELP ME, COMPLETE THESE STATEMENTS, THANKS:  http://roberthorequestforstatements.blogspot.com/

      My wife, an accountant, then a manager in an MNC drawing a 5-figure salary before she retired, can confirm that I write the Truth in all these.  <<<<<<<<<<

      RH:   LKY LHL WKS ELECTION RIGGINGS EMAILED TO ALMOST ENTIRE GOVT:
      http://i-came-i-saw-i-solved-it.blogspot.com/2010/06/lky-lhl-wks-election-riggings-emailed.html

      ME ON VIDEO DESCRIBING lky lhl wks NUMEROUS ELECTION RIGGINGS + PoBoB and CCTV Ideas:
      http://i-came-i-saw-i-solved-it.blogspot.com/search/label/%22A%20Video%20RH%20on%20LKY%20LHL%20WKS%20cheating%20elections%20%2B%20PoBoB%20and%20CCTV%20Ideas%22

      http://www.youtube.com/watch?v=jQCab3QZbBk

      MY ACQUAINTANCE, MR DAVID DUCLOS, A FORMER POLICE INSPECTOR, AND HIS LAWYER FRIEND, EYEWITNESSED LEE KUAN YEW RIGGING THE 1997 CHENG SAN GRC ELECTION.  READ MORE AT MY BLOG ENTITLED "I CAME, I SAW, I SOLVED IT" : 

      b.  SWORN EXHIBIT IN SUPPORT OF AFFIDAVIT:

      c.  SOME LEGAL PRINCIPLES ON WHICH I GROUND MY CASE:

      d.  THE PATTERN OF CRIMINAL WRONGDOINGS THAT PROVES MY CASE;

      e.  3rd EMAIL TO UK PM FOR OBSTRUCTING, PERVERTING JUSTICE:

      LEE Kuan Yew, LEE Hsien Loong, Tony TAN, HO Ching corruptions and theft of billions:

      "THE PRIMAL FEAR OF A SUPERIOR MIND"



      --
      >>>>>>>>>>  TO HELP ME, COMPLETE THESE STATEMENTS, THANKS:  http://roberthorequestforstatements.blogspot.com/

      My wife, an accountant, then a manager in an MNC drawing a 5-figure salary before she retired, can confirm that I write the Truth in all these.  <<<<<<<<<<

      RH:   LKY LHL WKS ELECTION RIGGINGS EMAILED TO ALMOST ENTIRE GOVT:
      http://i-came-i-saw-i-solved-it.blogspot.com/2010/06/lky-lhl-wks-election-riggings-emailed.html

      ME ON VIDEO DESCRIBING lky lhl wks NUMEROUS ELECTION RIGGINGS + PoBoB and CCTV Ideas:
      http://i-came-i-saw-i-solved-it.blogspot.com/search/label/%22A%20Video%20RH%20on%20LKY%20LHL%20WKS%20cheating%20elections%20%2B%20PoBoB%20and%20CCTV%20Ideas%22

      http://www.youtube.com/watch?v=jQCab3QZbBk

      MY ACQUAINTANCE, MR DAVID DUCLOS, A FORMER POLICE INSPECTOR, AND HIS LAWYER FRIEND, EYEWITNESSED LEE KUAN YEW RIGGING THE 1997 CHENG SAN GRC ELECTION.  READ MORE AT MY BLOG ENTITLED "I CAME, I SAW, I SOLVED IT" : 

      b.  SWORN EXHIBIT IN SUPPORT OF AFFIDAVIT:

      c.  SOME LEGAL PRINCIPLES ON WHICH I GROUND MY CASE:

      d.  THE PATTERN OF CRIMINAL WRONGDOINGS THAT PROVES MY CASE;

      e.  3rd EMAIL TO UK PM FOR OBSTRUCTING, PERVERTING JUSTICE:

      LEE Kuan Yew, LEE Hsien Loong, Tony TAN, HO Ching corruptions and theft of billions:

      "POWERFUL POLITICIANS WHO CANNOT CREATE, INVENT, SOLVE PROBLEMS AND CHANGE THE WORLD CAN ONLY TAKE SATISFACTION BLOCKING, DEGRADING, THOSE WHO CAN."
    Your message has been successfully submitted and would be delivered to recipients shortly.