Quote:Property and Trust In his article “The Trouble with CPF investment in Special SGS” tremeritus/2014/06/18/trouble-with-cpf-investments-in-special-govt-securities/), the writer explained the legal definition of bailment which transforms CPF monies from a property of CPF into a property of the government by the act of the purchase of Special SGS. Once the monies became the property of the government, it can do as it wishes, without the legal obligation to be transparent. As it later transpired, the monies are mingled with budget surpluses, land sales and proceeds of SGS issuance in a common pool from which funds are allocated GIC and Temasek. However, here is an important opinion. “According to Trust Law, any trust monies (CPF funds) if pooled together with the trustee’s funds, is entitled to the same returns on the investment that the trustee was able to achieve with the commingled funds.” Note that CPF monies are trust monies as they are members’ funds held in trust by CPF. “A mere ‘non-marketable and non-tradeable’ IOU such as the SSGS does not automatically convert the trust monies into ordinary funds or “debt proceeds”. The “trust” remains indelibly impressed on the monies, regardless of the legal forms and procedures adopted, and the beneficiaries can ‘follow the money’ to claim all profits if a trustee commingled funds with his own funds. Just look at the City Harvest case – the prosecution, quite rightly, refuses to accept the “bond” in that case as a genuine bona fide bond.” Thanks to this insight, other than observing the movement of funds from CPF to the SG Government Treasury as a change of property ownership, an alternative argument would be if CPF funds has been transformed from trust monies to unencumbered debt proceeds by the act of investing in Special SGS.
Posted on: Wed, 16 Jul 2014 13:44:11 +0000