Singapore fund chief does not want to sway UBS

‘GIC pursues, as a financial investor, exclusively commercial objectives. We have no plan to control the UBS business,’ GIC’s Managing Director Lim Siong Guan told Swiss newspaper Neue Zuercher Zeitung in an interview.

Shareholders in UBS, Europe’s biggest casualty of the US subprime mortgage crisis with $14.5 billion of writedowns, will be asked at an extraordinary meeting on February 27 to approve a 13 billion Swiss franc ($11.79 billion) capital injection by Singapore and an unnamed Middle East investor.

The GIC is injecting 11 billion francs by subscribing to mandatory convertible notes paying a coupon of 9 percent.

UBS Chairman Marcel Ospel is expected to be given a rough ride by shareholders for presiding over one of the biggest debacles in the history of the bank, which has been plunged into losses by the subprime meltdown.

The GIC head’s comments appeared calculated to soothe ruffled Swiss pride after UBS turned to the Singaporean sovereign wealth fund in order to help shore up its battered balance sheet.

Lim Siong Guan said the GIC was run according to strictly profit-oriented criteria and, even though some local Singaporean politicians sat on its board, the management was made up of investment professionals.

‘All decisions are taken by this management team and the Board of Directors does not get mixed up in it,’ he told the newspaper. He also said he believed in UBS’s long-term growth potential in the fast-growing financial services business.

UBS is the world’s largest wealth manager and has a fast-growing presence in Asia.

‘From our point of view the only relevant question is: can this capital injection strengthen the bank so that its business grows further? If so, that is clearly in the interest of all shareholders,’ he added.