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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
LETTER FROM THE SINGAPORE EMBASSY
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
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.
BERNSTEIN AND KEAN REPLY
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