Wednesday, October 11, 2006

Singapore - A safe haven for the rich and crooked?

Back in July'06, I posted an article "Singapore none too fussy about the source of wealth in its financial sector" by Michael Backman. Its worth reading again (or for those who haven't read it before) in light of the staggering figures cited in the Reuters report below........

YOU are an Indonesian businessman. You've bribed a state bank official to give you a $US200 million ($A265 million) loan without sufficient collateral, or a risk assessment, for a business venture you know won't get off the ground.

The authorities have found out and you're facing arrest. You need somewhere to go where authorities can't touch you. So where do you go? The answer is Singapore . Why? Because it is a half-hour flight from Jakarta , or 45 minutes by ferry from the Indonesian island of Batam , and, most importantly, it does not have an extradition treaty with here to continue

Take note the figures in this Reuters report are in US$............
A third of Singapore's rich are Indonesians - Merrill

By Reuters
Tuesday October 10

SINGAPORE (Reuters) - A third of Singapore's high net worth individuals are of Indonesian origin, according to a report by Merrill Lynch and Capgemini.

At the end of 2005, Singapore had an estimated 55,000 high net worth individuals, holding assets worth $260 billion, the report said.

A third of these individuals were Indonesians with permanent resident status in Singapore -- 18,000 in all -- with assets worth $87 billion.

"Singapore has a very open immigration policy to attract talented foreigners and that has also attracted a lot of high net worth individuals from Indonesia," Tho Gea Hong, market director for Merrill Lynch Global Private client, told a news conference.

High net worth individuals are defined as people who have net financial assets of at least $1 million.

Tho said the number of high net worth individuals in Singapore has risen 13.4 percent from 2004. A total of 1.3 percent of these individuals are ultra-high net worth individuals, with assets exceeding $30 million.

Kong Eng Huat, Market Managing Director, South Asia, for Merrill Lynch Global Private Client, said Asia-Pacific excluding Japan would need 10,000 bankers to serve a million high net worth individuals, compared with an estimated 5,000 bankers now.

He said Merrill expects its Singapore headcount to increase by 20 to 25 percent over the next few years because of strong growth in the wealth management business in Asia.

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