When GIC (Government of Singapore Investment Corp) invested $10 billion in Swiss bank UBS, they say that it is a good long-term investment for Singapore. I must say GIC must be looking at the very, very long-term because so far, it’s been bad news all the way.
Here’s the latest bad news for UBS. The US FBI is now traveling to Switzerland to probe the company for a multi-million-dollar tax evasion case. This move is due to the confession of former UBS banker Bradley Birkenfeld last week that he conspired to help wealthy American clients dodge millions of dollars in taxes.
Birkenfeld pleaded that while he was a director of UBS' private banking division, he met frequently with wealthy Americans wanting to conceal their assets abroad and he as well as other managers, also advised clients to conceal their assets by buying jewels, art and luxury goods using the money in their Swiss accounts and then deposit them in Swiss safety boxes.
The US probe is another headache for GIC who had invested in UBS after they had lost 37 billion dollars during the US sub-prime crisis. I wonder just how ‘long-term’ it will be before Singapore start getting some good returns on this ‘good long-term’ investment.