Another instance of Sinkapore being the preferred tax haven for Europeans

[PrinceCharming]

Financial Times, 24 May 2013

Stepic offers to resign as head of Raiffeisen Bank

By James Shotter in Zürich

The chief executive of Raiffeisen Bank International has offered to resign amid mounting scrutiny of his involvement in property deals in Asia.

At a hastily convened press conference in Vienna, Herbert Stepic, one of Austria’s most prominent bankers, said that he had taken the step in order to protect the reputation of Austria’s third-largest lender by assets.

“As a result of recent press reports . . . it has become clear to me that a discussion is under way that is threatening to damage the standing of my company,” he said.

“I have informed Walter Rothensteiner, chairman of RBI’s supervisory board, that I am tendering my resignation as chief executive of RBI. In doing so, I want to do what I can to prevent what I consider my life’s work from suffering lasting damage from an emotional and populist debate.”

Raiffeisen said that the “responsible committees at RBI will promptly consider this proposal”. Mr Stepic will continue as chief executive until a decision is reached.

Mr Stepic has been under growing pressure since it emerged that he had used two letterbox companies, based in Hong Kong and the British Virgin Islands, to buy three flats in Singapore.

Austria is in the process of hunting down untaxed offshore assets held by its citizens and, to this end, recently signed withholding tax agreements with Switzerland and Liechtenstein.

Mr Stepic reiterated on Friday that the two companies, Yatsenko International Limited and Takego Holdings Limited, were not “offshore constructions, especially as all the investments were carried out with income that had been taxed in Austria”.

“These were actually real property investments that were completed via project companies,” he said. “I have no problem with laying open the details of the case to the relevant authorities.”

The Austrian Central Bank said on Thursday that it would scrutinise the deals and Raiffeisen is itself in the process of conducting an internal investigation. The FMA banking watchdog has also asked Mr Stepic to provide information.

Mr Stepic joined Raiffeisen in 1973 and has been a pivotal figure in the bank’s development, masterminding its expansion into central and eastern Europe, which started in the late 1980s, and accelerated after the collapse of communism. The bank is now present in 17 markets and one of the region’s largest lenders.

The veteran banker has also steered Raiffeisen through the financial crisis in better shape than most of its peers. It has posted just one quarterly loss since it was listed in 2005.

This is not the first time that his property dealings have attracted attention, however. The FMA also reviewed Mr Stepic’s involvement in a deal in Serbia before recently dropping its probe after concluding that he was no longer involved in the project.

 

[Leongsam]

There's nothing wrong with being a tax haven. Every country is entitled to find its niche in the world order.

 

[Asterix]

There's nothing wrong with being a tax haven. Every country is entitled to find its niche in the world order.

Of course there is nothing wrong per se with being a tax haven. As I mentioned before in some other post, the fact that many Malaysians and Indos deposit their money in Sinkie banks is one of the ways to ensure that we are not invaded. Their money is used to fund our enterprises via the banking system. Malaysian and Indo Chinese tycoons will use their influence back home to ensure that their deposits are safe. However, when this liquidity is used to purchase real estate in the tax haven itself and drive prices out of reach for locals, then it has political implications not to mention its adverse effects on the wealth gap and social harmony. Further, placing too much reliance on one sector is imprudent. We all know what happened to economies like Iceland, Ireland, Cyprus, etc whose financial sectors were disportionately large and built upon foot loose foreign liquidity which can be pulled out on short notice.

 

[scroobal]

That is not the issue. We have created a high end property market for investment and speculation. Most Singaporeans cannot play in this markets, only the elite and the rich foreigners but the knock on effect is that our your couple are priced out the unit gets smaller as the land is the same. Why would an Austrian buy 3 units in Singapore except for speculation.

Can we afford to build high end units to keep the GDP growing while the space is a premium.

At the end of the day, people like Tharman will have to take responsibility. He must be wondering why he is working his arse out while the PM's brother manages probably the biggest property outfit in the country. And he does for the family.

There's nothing wrong with being a tax haven. Every country is entitled to find its niche in the world order.

 

[PrinceCharming]

Most Singaporeans cannot play in this markets

As you said, the keyword here is play. Why should Sinkieland be a playground for ultra-rich foreigners who have no stake in the future of the city-state and more importantly in the well-being of the locals?

while the PM's brother manages probably the biggest property outfit in the country. And he does for the family.

Last I heard, Pinky's brother is also consultant to a privately held international company specializing in providing consultancy to people who wish to evade/avoid taxes in their own countries and those who wish to stash their ill-gotten wealth away (eg. corrupt Chinese officials)

 

[borom]

Insight - A Singapore wealth manager under fire amid crackdown......
SINGAPORE (Reuters) - The email landed at a tough time for David Chong....chairman of Portcullis TrustNet, one of Asia's biggest wealth advisory companies..........
By threatening to publish offshore companies and trusts held by his clients, it hit a raw nerve at a company whose customers rely on its discretion. But it also came as the wealth management industry faces a wave of global scrutiny from regulators trying to weed out tax dodgers.

The email from a group of investigative journalists said it wanted to expose how the rich compound the world's economic problems by using offshore tax loopholes to minimise tax payments...........
clients.....include a member of the Philippines politically powerful Marcos family, a former minister in the Thai cabinet and a hedge fund manager now jailed for insider trading............
Singapore has grown in the last decade into Asia's biggest wealth management centre as assets under management leapt four-fold to more than $1 trillion...........
"There is a shrill hysteria against the rich and powerful because of the hard economic times," said ..... Chong.......
Still, many governments are facing rising public anger over tax evasion at a time of economic austerity in many countries. The Tax Justice Network, a UK-based advocacy group that supports transparency in international finance, estimates on its website that $250 billion is lost in tax revenues each year owing to funds held offshore by individuals...........
Trust companies in Singapore and elsewhere operate in a "grey area" of compliance, said Jason Sharman, a professor at Griffith University in Australia, who focuses on offshore financial centres, money laundering and tax havens.......
"They may not be breaking Singapore laws but they may be making it a lot easier for foreign clients who break laws in those clients' jurisdictions," he said. "There's often a large amount of turning a blind eye."........
He doesn't believe there is any evidence of illegal activity in the lost data but noted that what was legal a few years ago may not be now.

"There has been this bad press but hopefully in due course we can show that we have done no wrong," he said. "The goal posts keep moving and we move with the goal posts."
http://uk.reuters.com/article/2013/06/03/uk-portcullis-wealth-insight-idUKBRE9510E920130603

Not only are many of these crooks buying properties in the red dot with their ill gotten gains, their children are here stealing places from local kids in schools/universities , and on graduation stealing PMET's jobs from our own people.
We must differentiate these crooks from genuine foreign investors who open factories and companies in Singapore and create jobs for locals. A good example is Ikea where I observe that almost all the jobs are done by locals. We welcome such foreign investors here.