Is it Fiduciary Suicide to Give Our Reserves to Profitable Firms such as Citibank?

It was reported that a sum of $35 million provided as wage subsidies to 32 commercial firms had been returned to the government. Apparently, these companies do not need money from our reserves. Another 29 companies also reported that they do not wish to receive further wage subsidies. No amount has been stated or how much they would receive had they not declined.

This is a huge sum of money by any means contributed by our hardworking forefathers, mothers, uncles and aunts by their sweat and toil. Some of our foreparents even preceded our labeled pioneer generation.

The refund of $35 million by these companies is no small beer. It was also reported that Citibank was among the returnees of the money.

Giving out large tranches of money erroneously during times such as this elicit some soul searching on what went wrong. Why are there no background checks carried out before large swaths of money are given away?

This would have been under the radar had the 32 firms choose not to return these $35 million! And Singaporeans will not be any wiser.

One of the firms cited was Citibank as a prominent returnee, which is listed on the New York Stock Exchange. Helping Citibank is akin to assist them paying out MORE dividends to its shareholders! Never mind that it’s Singapore Branch has a high percentage of Singapore employees.

There is no prize for guessing who the majority of the shareholders are! They are definitely not Singapore citizens or Singaporean corporate entities for that matter.

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This breach of fiduciary duties is an embarrassment to all Singaporeans with hand wringing by the lowest 20 percentile of our poor citizens.

This lackadaisical attitude in which our hard earned savings were given out deserves more than a slap on the wrist compared to the case on the award of contract under waiver of competition by Aljunied-Hougang Town Council.

It would now appear that both the authorising and approving officers of the wage subsidies did not bother to carry out any background checks before sending out moneys to these 32 returnee companies. If they had done so, this would not happen.

Will similar checks be carried out on those who have yet to raise their hands on returning the reserve? Or adopt a wait and see attitude until they sent in their corporate tax returns?

To make matters worse, the government has now said that they will be using the returned portion and declined reserves for OTHER USES (emphasis mine) and also telling firms that they can use the reserves for PHILANTHROPIC (emphasis mine) purpose as well.

Oh hell! Did you say ‘Philanthropic?’ Err! Have they ever thought about the new poor from Chinatown to Jurong to Ponggol, Tampines and to the north of the city?

Is this allowed in sound financial practice by deviating from the original intent of saving jobs or the newfangled term of ‘JSS?’

If not, the returned $35 million by the companies should be sent directly back to the reserve account. This is the essence of sound finance and accounting practice.

For Singapore which wants to rival London for the number one financial hub position, it has to be clear headed when dealing with large tranches of money and its original intent.

Needless to say, the government needs a thorough review and overhaul of its procedures and processes in its financial management, especially our reserves.
A sound reporting system should also show the status of the allocated reserves including savings, if any after the pandemic recedes.

ASS Loyal Reader Gilbert Tan

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