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GIC Druglord-Linked Fund "Liquidate


Letters in Response to The Nation article, October 20, ?Singapo''e?s 
Blood Money? by Bernstein and Kean 
Both response letters published in The Nation, November 24, 1997

Washington, D.C.

The Editor
The Nation

In "Singapore's Blood Money" (Oct. 20), Dennis Bernstein and Leslie Kean
alleged that the Singaporean government is engaging in joint business
ventures with drug lords in Myanmar.  Bernstein and Kean are recycling old
allegations made by an Australian television station, Special Broadcasting
Service (SBS), in October 1996.  In November 1996 the Government had
rebutted these allegations.  It pointed out that the Government of
Singapore Investment Corporation was a passive investor in the Myanmar
Fund, and was not involved in the investment decisions of the fund.  Other
investors included Air Liquids International and beneficial interests held
by nominee companies such as Coutts & Co. (an old British bank) and Swiss
Bank Corporation.

The statement also explained that GIC kept securities with Morgan Guaranty
Trust Co. because this was the common practice of most investment
corporations.  There is nothing sinister or secret about this investment,
which had been publicly disclosed.

As for opposition leader Dr. Chee Soon Juan's criticism, the Government
had invited him to get his party to move a motion in Parliament calling
for a Commission of Inquiry.  There would be a full debate, and the
Government would support the motion.  Dr. Chee could then bring evidence
to the Commission to prove that the Government had acted immorally and
colluded with drug traffickers by investing in the Myanmar Fund.  Dr. Chee
declined to do so.

In August 1997, a majority of other shareholders voted in favor of winding
up the Myanmar Fund.  As a passive investor, GIC supported the decision. 

Jean Tan
First Secretary
Singapore Embassy

Mill Valley, Calif.

The Singapore government's response again confirms the fact that the 
government, through  the GIC and the Myanmar Fund, was doing business 
with legendary drug trafficker Lo Hsing Han of Burma. Indeed, the rush 
in August to shut down the Myanmar Fund--only one aspect of a 
complicated web of investments with Lo and Burma's  
narco-dictatorship--is a clear indication that something is very wrong. 
(As we noted in our article, Lo and his company Asia World are under 
investigation by narcotics officials in several countries.)

Beyond this, Jean Tan's specific criticisms do not address the 
substance of our article. Nowhere did we say that the GIC?s use of 
Morgan Guaranty Trust Co. as a custodian was "sinister or secret."  The 
newsworthy point is that a major U.S. financial institution had  
business ties to a known heroin dealer.

Furthermore, Tan's assertion that the GIC was merely a "passive 
investor" is belied by the fund?s own documents, one of which says that 
the GIC is a "core shareholder" and as such has a representative on the 
investment committee of the fund. "The committee will determine whether 
investment proposals are viable and whether they should be approved for 
investment by the Fund" says the 1994 document.   (As manager of the 
GIC since 1991, Eddie Taw Cheng Kong was the GIC representative on the 
fund investment committee until very recently.  Taw was sentenced in 
May to nine years in jail and a $2.4 million fine for accepting bribes 
from companies whose shares were purchased by the GIC.)

Tan's statement on Dr. Chee Soon Juan's  refusal to set up a commission 
is misleading.  Dr. Chee was not a member of Parliament and thus would 
have been excluded from the commission. His colleagues in Parliament 
were afraid of lawsuits and other repercussions. Dr. Chee had already 
been the target of a government defamation law suit  and was forced to 
sell his house and borrow heavily to avoid bankruptcy.  Amnesty 
International says that Singapore's leaders are systematically  
?resorting to defamation suits as a politically-motivated tactic to 
silence critical views and curb opposition activity."

	Chee still had the courage to speak out, but his questions (in a 
letter to the Prime Minister and The Straits Times) remain unanswered 
by the ruling elite: Is Lo Hsing Han allowed to move freely in and out 
of Singapore, for example? Has the government investigated the 
background of Lo's son Steven Law, who has been denied a U.S. visa on 
suspicion of drug  trafficking? Will the government state clearly that 
Burma?s junta is not helping or turning a blind eye to drugtrafficking?

Although the Myanmar Fund is now undergoing  liquidation,  these 
investments represented only a small part of Singapore's total 
investment in Burma. The US government has reported that more than half 
of Singapore's $1 billion-plus investment in Burma is tied to Lo Hsing 
Han and his family.

Dennis Bernstein and Leslie Kean

Two Further Notes:  The Kerry Investment Management reports that the
Myanmar Fund "was formally placed into Liquidation on 29th August 1997.

In response to the question:  Is there any other Fund that has taken its
place to continue Singapore's investments in Burma?  The Singapore Embassy
in the US responds, "No other Fund has been set up to replace the Myanmar