By Goh Chin Lian

THE conduct and investment practices of Temasek Holdings and the Government of Singapore Investment Corporation (GIC) came under scrutiny yesterday - and they were found wanting.

The need to be more transparent in their investments for greater public scrutiny and for a review of the way they manage Singapore's reserves were issues raised by three MPs.

First to rise was Mr Michael Palmer (Pasir Ris-Punggol GRC), who criticised Temasek for keeping mum initially on the details of the sale of its entire stake in Bank of America.

News of the sale broke on May 15. Its statement explaining the sale was issued last Thursday - six days later.

Despite the statement, Mr Palmer felt there were questions still left unanswered, such as those relating to the timing of the sale and the actual sale price.

Mr Zaqy Mohamad (Hong Kah GRC) believes Singaporeans deserve more accountability on how their money is being invested. He also suggested giving people more information on the bonuses and performance of staff at Temasek and GIC.

'We ask the same of our professional investment fund managers and commercial banks. Why not those who manage our reserves?' he said during the House debate on the President's Address.

Mr Inderjit Singh (Ang Mo Kio GRC) felt the two investment companies had departed from their original investment goals and asked for a top-level review of the management of Singapore's reserves.

The MPs' comments came in the wake of reported losses by both.

GIC's portfolio shrank, in US dollar terms, by about 25 per cent from the time global markets peaked in October 2007 to the end of last year.

Temasek's portfolio contracted 31 per cent, from S$185 billion to S$127 billion, between March 31 and Nov 30 last year.

The sale of its 3 per cent BoA stake could have resulted in a loss of at least US$2.3 billion (S$3.3 billion), according to analyst estimates.

According to the Finance Ministry website, GIC is an investment management company responsible for the global management of the Government's assets and the delivery of good, long-term returns on the Government's foreign reserves.

Temasek, it says, is an investment holding company that owns and manages a diversified portfolio with the objective of delivering long-term returns to its shareholder, the Singapore Government.

Mr Singh noted that GIC used to focus on very long-term investments, taking a conservative approach that gave good returns, while Temasek set out to invest in Singapore-based and Government-linked companies, and help them be multinationals.

But over the years, Temasek moved more into what GIC used to do by investing overseas. GIC has also recently gone into more risky investments, he said.

He asked: 'Should we allow so much of our reserves to be placed with GIC and Temasek or should reserves be placed in much safer investments managed by people who understand that these are meant to be long-term investments?'

This article was first published in The Straits Times.