'Each town council has the duty to explain to its residents how it invests its funds, what is its philosophy, what are the risks it takes,' said Mr Mah at a green event, Everyone Go Green Day, in Tampines on Saturday. -- ST PHOTO: Mugilan Rajasegeran
TOWN councils must be accountable to their residents for what they do with the money they collect from them, said National Development Minister Mah Bow Tan.
But the Government should not meddle with how these funds are managed, just as it does not interfere with the town councils' other operations.
'Each town council has the duty to explain to its residents how it invests its funds, what is its philosophy, what are the risks it takes,' said Mr Mah at a green event, Everyone Go Green Day, in Tampines on Saturday.
'And demonstrate that it has made those decisions in a manner which is fair, reasonable and which residents would agree with.'
He was asked to respond to news that emerged last week that eight of the 14 town councils run by the People's Action Party have invested about $16 million in troubled structured products.
These include Minibonds linked to bankrupt US investment bank Lehman Brothers and the now worthless Merrill Lynch Jubilee Series 3 LinkEarner Notes.
The town council in Mr Mah's Tampines GRC ward had $250,000 invested in Lehman Brothers.
The investments came from the town councils' sinking funds, which are amassed from residents for long-term cyclical maintenance, including lift upgrading.
The Government stipulates that 20 to 25 per cent of money collected from monthly service and conservancy charges must go to a sinking fund.
But 'how that sinking fund is to be invested ultimately depends on the various town councils,' said Mr Mah, in his first comments on the matter.
Read the full story in tomorrow's edition of The Sunday Times.
