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30-12-2014, 12:40 AM
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The Case Of Roy Ngerng In The Court Of Human Rights And Common Sense
An honorable member of the Coffee Shop Has Just Posted the Following:
Source: The Real Singapore THE CASE OF ROY NGERNG IN THE COURT OF HUMAN RIGHTS AND COMMON SENSE Post date: 29 Dec 2014 - 7:08pm  I am a foreigner. Whether I’ve got any talent, I will leave for others to decide. I am in Singapore only for a short period of time due to family relations. While here, the defamation case the sitting Prime Minister Lee Hsien Loong is running against blogger Roy Ngerng has caught my interest. The reason for the interest is probably twofold: first of all, I have an outsize interest some of the topics Ngerng has addressed in his blog posts, in particular asset management and sovereign wealth funds. The second reason for my interest is that the case seems odd. It does not seem to belong in 2014. At least not in Singapore in 2014. Maybe East Germany in 1984 or Uzbekistan today. But not Singapore in 2014. As I am not a lawyer, I will not and cannot speak about the legal merits of the case under Singaporean law. But even though I have no knowledge of Singaporean law, I do believe I have some common sense. Furthermore, I do believe that every person on this planet has some basic human rights that no one, not even the Singaporean government, can take away. One of these rights is freedom of expression. I do acknowledge that not everybody will agree that freedom of expression is a human right. To those I will say as Voltaire: “I disapprove of what you say, but I will defend to the death your right to say it.” I hope those who disagree with me will reciprocate that. On this background I decided I wanted to do a thought experiment: to try the defamation suit against Roy Ngerng in the court of human rights and common sense. The basics of the case are well known to most Singaporeans: Roy Ngerng wrote a blog post drawing parallels between the City Harvest Church (whose leaders stand accused of misusing funds) and the way the Singaporean government manages the CPF, GIC and Temasek. The contested statement in Ngerng’s blog post is the following: “Meanwhile, something bears an uncanny resemblance [between City Harvest Church and CPF/GIC/Temasek] to how the money is being misappropriated.” Prime Minister Lee has claimed that this statement is defamatory and Ngerng has been convicted of this in the High Court of Singapore. But how does this stand up in the court of common sense and human rights? My common sense tells me that when evaluating whether the above statement can be considered defamatory, two questions need to be answered:
First let’s consider whether Roy Ngerng’s statement is true or not. The three words in the statement that are relevant are “uncanny”, “resemblance” and “misappropriated”. The first two are fairly straightforward. “Uncanny” is clearly a matter of opinion and hence cannot be falsified. Furthermore, the charts shown in Ngerng’s blog post show clear similarities in the organizational structure of City Harvest Church and CPF, GIC and Temasek. The founders of City Harvest are a married couple: Kong Hee and his wife Sun Ho. Meanwhile, Lee Hsien Loong is both prime minister of Singapore, chairman of the board of the GIC and his wife, Ho Ching, is the head of Temasek. That Lee’s father, Lee Kuan Yew, is also the head of the GIC’s “international advisory board” does not reduce the resemblance. Although such family connections are not uncommon in Asia, or indeed in Europe and America, there is undoubtedly some resemblance between City Harvest Church and the GIC/Temasek/CPF structures. The sticking point is then the last word: “misappropriated”. Is there any resemblance in the way funds are being misappropriated? As, in particular the GIC, but also Temasek, are opaque entities with limited insight for the public, it is impossible to know for certain if there is any misappropriation of funds or not. Nevertheless, we can look at the circumstantial evidence in order to consider whether misappropriation is likely or not. Before we do this, however, a definition of “misappropriate” is required. Google’s definition is as follows: “dishonestly or unfairly take (something, especially money, belonging to another) for one's own use” “Dishonestly” may imply an illegal action, while “unfairly” is more linked to morale and what can be considered right or wrong. We cannot know for certain whether Ngerng when he wrote his blog post meant that something illegal was going on or whether he meant that the compensation managers and directors of the GIC and Temasek are awarded are too high and unfair. As Ngerng is a sociologist and not a lawyer, and as his writing is mostly on social issues, it seems fair to assume that he was more concerned about the fairness of the cash flows rather than their legality. This would also give Ngerng the benefit of the doubt, which seems common sense in a case like this. So what can we glean from looking at the circumstantial evidence when it comes to whether money may or may not have been unfairly allocated to the top brass at the GIC and Temasek? In June 2014 Deutsche Bank released a survey that presented what were the most frequent red flags investors looked for when considering where to put their money. Singaporeans have a lot of their wealth in the GIC and Temasek and it thus makes sense to look at what other investors consider cause for concern. The top five red flags that Deutsche Bank found were: lack of transparency, inadequate compliance procedures, poor segregation of duties, inexperience and inappropriate valuation policies. The GIC and Temasek teams are surely experienced so that is not a red flag. But the lack of transparency of the GIC and Temasek is well-known and certainly represents a red flag. Poor segregation of duties is also a red flag. With the prime minister doubling as chairman of the GIC and other ministers also on the board, the lines become blurry: where does the responsibility of the government stop and the responsibility of the GIC start? Lack of transparency means no judgment can be passed on compliance procedures and valuation policies. Thus: out of five potential red flags, one is green, two are red and two are of unknown color. Two red flags do not, of course, mean that anyone is allocating funds unfairly to themselves. So what additional circumstantial evidence do we have? We do know that the prime minister and his ministerial colleagues pay themselves high salaries. This is done in the open. But most Singaporeans I have spoken with believe that the salaries are too high and undeserved. Hence, if one takes misappropriation to mean “unfair”, many Singaporeans already seem to be of the opinion that the PAP government misappropriates funds. As the compensation paid out to the management and board of the GIC and Temasek are not known to the public, we cannot know for certain if the compensation is fair and reasonable or whether the level is so high it could be labelled “unfair misappropriation”. One can argue that the Singaporean government has one of the cleanest, least corrupt, reputations in the world. This would indicate at least no illegal misappropriation in the GIC or Temasek. Furthermore, one can argue that given they already pay themselves so high salaries as ministers, there would be no need to do the same in the GIC and Temasek. This argument, however, would only apply to people who double both as ministers and board members of GIC/Temasek. Finally, one can take the opposite view: never mind the high salaries the ministers already take home, human greed is boundless and, given the opportunity, who would not help themselves from the honey pot? The final piece of circumstantial evidence and the one I believe is the most compelling, is the fact that the GIC’s financial performance has been poor (I could not find numbers for Temasek and hence here only focus on the GIC). According to GIC’s report for 2013/14 its returns have on average been 0.7% less than the market benchmark for the last 20 years. Lack of transparency means it is difficult to know to what extent one can trust these numbers. But it seems safe to assume that the report at least does not understate the fund’s performance. Reasons for the underperformance given in the report are lower risk taken by the GIC than the reference portfolio and poor asset allocation. However, as investment professionals know, costs are also a major reason why funds underperform their benchmarks. As a matter of fact, a lot of academic research finds that investment managers on average underperform relevant benchmarks by an amount that is close to the fees they charge. Over such a long period as 20 years, it seems plausible that at least a sizeable fraction of the underperformance of 0.7% is explained by the GIC’s costs. Some operational costs and management fees are, of course, unavoidable. So a question would be: what are reasonable costs? Many funds, especially large ones which it is natural to compare the GIC with, manage to keep costs at 0.1% or even 0.05%. If the GIC has costs of 0.2%, 0.4% or even 0.7% per year, that would, in my view, be excessive for a fund as large as the GIC. If we assume, probably conservatively, that the average size of the GIC over the last 20 years has been 100 billion SGD, a management fee that is only 0.2% higher than it ought to be will, over the period, amount to 4 billion SGD in unnecessary costs. A lot of money. Around a 1000 times more than the amount officials of the City Harvest Church have been accused of misusing. Some, undoubtedly the GIC and PM Lee, will likely claim that whatever fees have been charged by the management of GIC are in line with market rates and hence are fair. Others may be of the opinion that the same level of fees is excessive and unfair. This boils down to a question of what one believes is fair compensation for investment managers that underperform. How can we summarize the issue of misappropriation of funds? If one takes misappropriation to mean “unfair allocation of funds to one’s own purpose”, and takes into account the GIC’s poor performance, the red flags and what the PAP government pays themselves in the open there is, in my view, good reason to believe that there is misappropriation of funds from the GIC. In any case, what level of fees one considers to be acceptable, and what would be excessive, is a matter of opinion. If one takes misappropriation to mean “dishonest” or “illegal”, in my view the likely answer would be “no”. The simple reason being: If you can take funds legally, but unfairly, why would you bother doing it illegally? So, is the statement of Roy Ngerng true or untrue? The only part of the statement that can be evaluated as such is the word “resemblance”, and that is undoubtedly true. Whether something is “uncanny” or “misappropriation” (in the sense of unfair), boils down to matter of opinion and cannot be falsified. PM Lee has claimed that Roy Ngerng’s statement is “false and baseless”. The analysis above and my common sense convince me that they are not. With the disputed statement not being untrue, there is no need to go on looking for extenuating circumstances that could exonerate Ngerng. For the sake of the argument, let’s nevertheless review what defenses Ngerng could use even if it turned out that his statement was untrue. The source of these is Wikipedia’s article on defamation and they are all very common sense:
So where does this bring us? The claim by PM Lee that Roy Ngerng’s statement is “false and baseless” is in itself actually false. In the court of common sense, there is hence no defamation case that can be brought against Ngerng. One counter-argument at this point can be that Mr. Ngerng has issued an apology where he admits that he in his blog post actually meant “criminal misappropriation”. He furthermore acknowledges that such allegations are false. However, when a 30-something year old blogger is threatened by the prime minister belonging to a party that has a long history of oppressing dissidents, it is not hard to imagine that the young blogger will consider all options to avoid suffering the same fate as other government critics. What duress, real or imagined, he might have felt, we do not know. For this reason, in the court of common sense, Mr. Ngerng’s apology is given no weight. Common sense makes it clear that the case Lee vs. Ngerng is not a case of Ngerng defaming Mr. Lee. Instead, and this is where human rights come in, it is an attack by the prime minister on Ngerng’s freedom of speech. The main purpose of the defamation suit seems to be to quell an opposing voice and to scare others from using their fundamental human right to express their views on the PAP government. A prime minister trying to stop his citizens from exercising their fundamental rights is, in my view, a serious offence. Much worse, in fact, than any alleged misappropriation of funds. In the case Lee vs Ngerng in the court of common sense and human rights, the ruling is thus the following: Ngerng is not guilty of defamation. But Prime Minister Lee is guilty of abusing Roy Ngerng’s fundamental human rights. Mickey Spiegel of the New York based organization Human Rights Watch put it this way: “In Singapore, free speech is apparently only free depending on who you are and who you are talking about. As Roy Ngerng is learning, even implying criticism of the government is risky in a country where government leaders are quick to bring a lawsuit in response to public comments that are pretty ordinary in rights-respecting democracies.” The world should not sit in silence and let this happen. Singapore is in many regards, and deservedly, a model country followed by other countries in the region. If we, foreigners and Singaporeans alike, allow the Singaporean government to trample on its citizens human rights, we send a very bad signal to governments in other countries that may see this as a carte blanche to do the same. We are also doing a disservice to our children who may come to believe that human rights are a foreign concept not applicable to them. I undertake to do what I can to end this injustice. I will do my best to get my government to speak up against this abuse of human rights. I promise to do my best to ensure this will never happen again. I hope you will too. F Reedom F Reedom is a pseudonym. The author wanted to write this article in full name. However, his in-laws requested it was published anonymously as they were afraid of repercussions from the PAP government if the article was published with full name. The author hopes to one day be able to freely express his views in Singapore without fear for himself or his family. The author has worked in financial consultancy and wealth management. He has a post graduate degree in finance and economics from a world leading university. He has intimate knowledge of asset management in general and management of sovereign wealth funds in particular. End Of Article  Click here to view the whole thread at www.sammyboy.com. 
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