Dr Teo says 'be thankful'

Dr Teo says 'be thankful'

Some residents upset; MP points out how funds have grown

Wednesday - November 19, 2008

Ong Dai Lin
dailin@mediacorp.com.sg

AS RESIDENTS of Holland-Bukit Panjang Town Council reacted to the news on Monday that their constituency's funds were exposed to Lehman-linked structured products, its chairmanDr Teo Ho Pin had this message for them: Be thankful that the funds have grown under the Town Council's watch.

Told of the rumblings on the ground about the high-risk investment, Dr Teo said the potential$8-million loss should be viewed in the context of the $24 million in investments generated over the past six years. If the Town Council had invested all its funds in low-risk investments, it would have earned only $5 million, he said.

"They (residents) should thank the Town Council for working hard to come up with a diversified portfolio to generate income so that residents do not have to fork out more money."

Generally, residents in Holland-Bukit Panjang and Pasir Ris-Punggol whom Today spoke to had no issue about Town Councils growing their accounts through investment.

But the 20 of them insisted that Town Councils must, nonetheless, draw the line at high-risk investments. Another clear sentiment: The Town Councils should have been more upfront about their current investment situation.

Retiree Mdm Low Li Choo, who lives at Holland Avenue, said: "The Town Councils were not honest and sincere enough by notrevealing the details of their investments right from the start."

Restaurant manager Dhanie Herman, who lives at Pasir Ris, also said: "Town councils should reveal from the start so that we can have a clearer picture of their investments."

Why didn't the Town Councils keep residents in the loop?

According to Dr Teo, it was because Town Councils cannot reveal their investment strategies and, anyway, Town Councils abide by the proper financial reporting system.

Details of their Lehman-linked investments were revealed on Monday by Senior Minister of State (National Development) Grace Fu in response to a question in Parliament. Prior to that, letters had been written to the press after Dr Teo, the coordinating chairman for the 14 People's Action Party Town Councils, had responded to media queries to say that these investments amount to "a couple of percentage" of funds.

Overall, they accounted for0.6 per cent of the Town Councils' total funds available for investment. In Holland-Bukit Panjang's case, it was 6.7 per cent ($8 million) of its funds and for Pasir Ris-Punggol,$4 million (2.6 per cent).

Yesterday, Tanjong Pagar Town Council, one of six other Town Councils with exposure to Lehman Brothers, said that $250,000 has been invested by its fund managers in the bankrupt institution's bonds — or 0.14 per cent of its total sinking funds.

Pasir Ris-Punggol MPs Teo Ser Luck and Penny Low said that residents' sentiments were fair, but urged them to understand that the Town Councils did not foresee the financial tsunami and its impact on complex structured products.

On the timeliness of making information available, Mr Teo said that "we will definitely have to inform the residents as soon as possible at a timely time", but "we need to first make assessments to know what has happened before making announcements".

Both Mr Teo and Ms Low assured residents belonging to both Town Councils that upgrading and maintenance works in the estates will not be affected.

Customer service representative Nura Fadhlin, who lives at Pasir Ris Drive 6, said: "It is unfortunate that there is a financial crisis now and the Town Council lost money, they couldn't have predicted it ... but I'm concerned that we don't know what they are doing with our money."

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