Segregation of Duties required: Our CPF, Temasek, GIC and Democracy

INDEMNITY: Look, I did not imply that the government is corrupt or engaging in any fraudulent transactions. I feel that there is a lack of trust between the government and its citizens. We want to believe in good faith what the government is doing is correct and good for its citizens and not for the few rich and powerful ones. We need a truly independent body to govern our reserves, GIC and Temasek, and he must be answerable to citizens. I DO NOT TRUST our current PRESIDENT, Dr. Tony Tan. He was part of the GIC, from the same political party and closely connected with the people from our current government. I feel the 33% who voted for him made the wrong decision. Here’s why:

Recently, I have met up with two of my accounting professors to discuss our government, CPF system, Temasek Holdings and GIC Pte Ltd. They were veterans on accounting reports and related fields. Previously, I have provided a background on the matter. The meet ups were casual but they were familiar with the situation.

The phrase that resonates constantly on my mind was “Smoke and Mirrors.” The professor said that when you let a single party government rule a country for 50 years, you are not going to get anywhere, no doubt. But you can’t prove it. Greed is human nature, and its legal. Its your fault to keep them in parliament for so long.

When I showed them the following picture I’ve gotten from the internet, they said the lack of segregation of duties is the problem here. The most important issue to address is who are the ultimate decision makers. Most relevant accounting textbooks focus on decision makers and segregation of duties to achieve maximum safeguard of assets and accountability. I feel the government must rectify and explain this fundamental issue:



What is segregation of duties?

“Segregation of duties is critical to effective internal control; it reduces the risk of both erroneous and inappropriate actions. In general, the approval function, the accounting/reconciling function, and the asset custody function should be separated among employees. When these functions cannot be separated, a detailed supervisory review of related activities is required as a compensating control activity. Segregation of duties is a deterrent to fraud because it requires collusion with another person to perpetrate a fraudulent act.”

Simply, the principal incompatible duties to be segre­gated are:

  • Custody of assets.
  • Authorization or approval of related trans­actions affecting those assets.
  • Recording or reporting of related transac­tions.

In our case:

GIC and Temasek Holdings have no obligations to Singaporeans. They are answerable only to their directors (the government) and shareholders. Essentially, the government borrows money from our CPF by issuing bonds (see below) and forms a private limited company (GIC) to indemnify themselves individually and invest the funds in whatever way they like. By definition, WE ARE NOT THE SHAREHOLDERS of the companies nor a CREDITOR! Surprise! How is that possible?


Our “supposed” net assets are valued at $232,509,917,000 Singapore dollars. 1sgd = 0.8 usd (p4 of financial statements) Out of which, 229,795,988,000 is invested. Under the notes to the financial statements, p31, $219,038,000,000 is invested in UNRATED Special issues of Singapore Government securities (SSGS). These securities are issued by our current government who has ruled Singapore for almost 50 years unchallenged. I am worried by the veil of secrecy behind these unrated bonds which also constitutes our nation’s reserves. How much we have in our reserves are not made known to the public. An election is coming soon (2016) and the ruling party is at risk of an exit. I am afraid that once we vote out the current government, it may be akin to opening to a can of worms. A worst case scenario.

Solution recommended: Get professional ratings agencies analyse and rate these UNRATED SSGS bonds.

What happens if the current government is voted out?

The GIC and Temasek board of directors REMAINS!!! Our money will still be in their hands. Who knows what may happen in future. I hope its still safe then. They are only obligated to pay interest and principal to the bonds when due. In the event of a default, you know GIC Pte Ltd is a LIMITED LIABILITY, how much can you recover from a bankruptcy?

Our reserves are primarily managed by GIC pte Ltd and Temasek Holdings and guaranteed by the government. GIC may or may not act like a hedge fund company. They lost big time in the 2009 financial crisis (33 billion of portfolio???). Perhaps they have mended their ways but we do not know exactly. We only earn a floating rate of 2.5% – 4% p.a. on the bonds issued (SSGS) while GIC earns 6% – 16.5% p.a. So who benefits from the excess interest earned??? And how much director fees are earned by each GIC board of directors??? Besides, what, where and how the funds are invested in are not specifically disclosed. We cannot prove that the money from taxes and pension funds are used to pay our fund returns. This cannot and must not be the biggest Ponzi scheme ever! The government must get us to trust again.

Info on our national reserves:

Info on GIC’s investment:

GIC’s reported losses:

If the international press didn’t publish the news, we wouldn’t know because our press and media are tightly controlled by the government.

Further Questions:

When is the latest an annual report must be published? As at 20 June, only 2012 annual report exists on the web for our CPF.

It depends on the rules written. For a public company, its 60 days. For a governmental institution (CPF), the government decides then because its not a public company. As for GIC and Temasek Holdings, essentially they are private companies, no obligation to publish annual reports.

Lastly, I admit I fear a worst case scenario, my money, my parents’ monies, as well as my friends’ monies are in the fund. Here’s a lyric from an old song from The Platters to end this post:

“Smoke Gets in Your Eyes”

They asked me how I knew
My true love was true
I of course replied
Something here inside
Can not be denied

They, said some day you’ll find
All who love are blind
When you heart’s on fire
You must realize
Smoke gets in your eyes

So I chaffed them, and I gaily laughed
To think they would doubt our love
And yet today, my love has gone away
I am without my love

Now laughing friends deride
Tears I cannot hide
So I smile and say
When a lovely flame dies
Smoke gets in your eyes

Smoke gets in your eyes




  1. internet marketing · July 2, 2014

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  2. Pingback: Writing a letter to someone of wisdom for career and life advice: Chris K | Embracing your identity

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