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Government of Singapore Investment Corp. (GIC), manager of more than $100 billion of the city’s reserves, sold almost all of its 2 percent stake in Olympus Corp., the camera maker that said it hid losses with inflated fees.

GIC now only has an “insignificant holding” in Olympus under a portfolio managed by an external fund manager after the sale, the fund said in an emailed statement Saturday, without elaborating on the financial effect of the divestment or plans for its remaining shares.

“Ever since the story broke and the unraveling of the extent of the fraud and coverup of the company, there has always been increasing risk of the viability of the company,” said Song Seng Wun, a Singapore-based economist at CIMB Research Pte. “Rather than take the risk, GIC’s management may have decided to bite the bullet.”

GIC, which said earlier this year risks and market volatility may increase, faced 6.7 billion Swiss francs ($7.4 billion) in paper losses two months ago as the biggest investor in UBS AG after the Swiss bank announced a $2.3 billion unauthorized trading loss that led to the resignation of its chief executive officer. The state-owned investor, ranked the world’s sixth-largest by Sovereign Wealth Fund Institute, also had unrealized losses on its investment in Citigroup Inc.

“GIC disposed of almost all of its investments on first suspicion of possible wrongdoing in Olympus,” the fund said in the statement, without elaborating on details of the share sale. “The majority of the investment was made in the midst of the global financial crisis.”

The comment came less than two months after its Sept. 20 meeting with the management of UBS in Singapore, where it “expressed disappointment and concern about the lapses” at the biggest Swiss bank, according to a GIC statement that same day.

The Singapore fund owned 2.1 percent of Olympus shares as of March, according to data compiled by Bloomberg.

The value of Olympus shares has plunged 84 percent since June 21, when the camera maker’s stock reached this year’s high of ¥2,798.

Tokyo Stock Exchange Group Inc. placed Olympus on the bourse’s watch list for review for possible delisting last week after it reversed earlier denials of wrongdoing.

Olympus has lost more than ¥500 billion ($6.5 billion) in market value since mid-October, when it ousted President Michael Woodford and he made public fraud accusations. The world’s biggest maker of endoscopes said last week it concealed losses by paying $687 million to advisers on 2008 acquisitions.

On Nov. 8, Olympus President Shuichi Takayama reversed earlier denials of wrongdoing and said the company is looking into the role played by special-purpose funds in hiding the losses, which date to the 1990s.

At least eight Cayman Islands entities have been linked to Olympus takeovers that are suspected of playing a role in the accounting scandal. Five of those no longer exist, according to a search of the Caymans registry, which does not give details on the individuals behind the companies.

“This is a reminder that when people commit fraud there’s not much you can do,” Song said. “This is a case of putting trust in a company’s management which was misplaced.”

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