Yesterday, I mentioned that Singapore’s Temasek has made a $5 billion investment in Merrill Lynch. I also said that there wasn’t any need for me to tell anyone how badly the investment in Merrill Lynch is doing now.
In just anyone is wondering; most of it is gone.
Today I will tell you know why. When the world economy was tanking and stock markets plunging (due to the credit crisis), Merrill Lynch somehow managed to find money to make 696 new millionaires in the world. Reports coming from the U.S say that Merrill quietly paid out at least one million dollars bonus each to about 696 top executive in the company even when the investment house was bleeding with losses last year. That’s not all; in total Merrill paid about $3.6 billion dollars in bonuses in December. This is just before they announced their fourth quarterly losses and their takeover by Bank of America.
The Americans has already started probes on the timing of these bonus payments. I think Temasek must do the same. That $3.6 billion bonus has to be taken from Temasek’s $5 billion investment because no one else was willing to lend them money back then.
Although we at least now know how ‘well’ Singapore’s money was used, I strongly suggest Prime Minister Lee Hsien Loong take a fine-tooth comb and probe those bonus payments. Who knows; if not for those bonuses, his wife might still be in a job.