Asia Sentinel, 6 Mar 2009
The ironies of Singapore's massive investment in troubled Swiss banking giant UBS are piling up. Even Lee Kuan Yew himself has now said that the Government Investment Corporation invested "too early" in UBS, with the result that is now showing a loss of billions of dollars of citizens' money on the deal.
GIC put 11 billion Swiss Francs (approx US$10 billion) into UBS in late 2007 and followed that up by subscribing to a rights issue in 2008. UBS was the biggest of all Singapore's ill-starred investments in foreign banks that made just as markets were starting to show major faults.
But Singapore may need to be worrying about rather more than just the losses sustained by UBS through its follies and forays into all manner of spivvy instruments. The fact is that UBS was more than just the recipient of GIC cash. The relationship with this high-powered Swiss instrument of tax-avoidance and money-laundering goes deeper. UBS is the most important foreign player in Singapore's mostly successful promotion of itself as the wealth management center of Asia.
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