Council funds are safe

LOOKING back at the episode involving losses by the PAP-run town councils, Mr Khaw says that there are several lessons that can be learnt.

One good thing that has come out of this crisis is that it has provided 'teaching moments' that will educate Singaporeans on range of subjects:

'I think along the way Singaporeans will get educated about investments, about returns, about risks, about the relationship with your local MP, about town councils' management which impacts your daily life, and therefore you legitimately have an interest to make sure it is well run, well managed.'

As for whether the episode could have been handled differently, Mr Khaw says, that, in hindsight, it is easy to criticise the town councils for how they managed the situation.

Would he have done it differently?

'I would have preferred much more communication; just openly share with people what you know, what you already know or what you don't know yet. And that is always helpful.'

But he defends the town councils against suggestions that they have not been transparent enough.

'It's absolutely transparent because this is not a secret society activity where there is secrecy and so on.'

He does not see the need to provide even more detailed and frequent updates because it may trigger an information overload.

'You have to also be aware that there's an info overload because once you start talking about funds of $200-odd million, there are a lot of transactions there and you cannot be going line by line, today this, tomorrow the other.'

And this attention to too much detail is what could cause people to miss the forest for the trees.

'I think this is what happened in the last few weeks, they keep on focusing on this Lehman product, forgetting about what about investment elsewhere,' he says.

The simple message he has for Singaporeans is this: 'Your funds are safe. Yes, there will be some losses in some individual transactions but, on an overall basis, the principal sum is there and and we've made profits in the previous years.'

This article was first published in The Straits Times on December 19, 2008.