Why? Why did you turn down a seat? What are you guys thinking?
Why did the GIC (Government of Singapore Investment Corp) turned down an offer of a seat on the board of UBS AG? I know politically its' to show that GIC has no intentions to take over the Swiss bank, but when you invest $10 billion into a bank (with public money I might add), surely a seat in UBS is the least we Singaporeans can execpt.
Downplaying fears of a takeover is one thing, but what if UBS made another mistake and go into the red again? Without a seat on the board, how can GIC stop (or even know of) the trouble? GIC had also recently bought $6.88 billion worth of Citigroup stock; so as the logic of GIC goes, GIC is not going to have a seat on the board of either Citigroup or UBS despite spending over $16 billion worth of public money!
Does that make sense to anyone? I don't care how unusual GIC's investments are, but if you are going to spend $16 billion of Singapore's money, why can't you get a seat on the board? Someone explain this to me please?
1 comment:
I have this theory (you can discard). What if it appears to be buying shares of UBS but in fact, it is actually a loan. Dividends depend on profits (if any). No profit - no dividend. UBS share prices are not going any way up soon.
When UBS makes more or less profit, you still need have to repay the loan WITH INTEREST. When it perceives that GIC is investing in UBS, it enhances the market confidence in UBS.
Ask any savvy businessman if he will do the same, he will ask you to go and fly a kite.
Well, it just me talking rubbish.
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