June 18, 2003
Why is the chairman of Singapore's
leading telecommunications company buying shares in a rival telco, asks Eric
Ellis.
You are a well-paid stalwart of your country's business establishment, a trusted
pair of hands stewarding the country's leading telecommunications company, the
one that as many as half of your country's share-owning population have
entrusted some of their life savings to, the same Singaporean company that owns
Australia's second-largest carrier.
But your company's shares have fallen by 60% in the past year or so. So how do you invest your own money? You buy $300,000 worth of shares in your leading competitor, which is more than you own in the company you chair.
That's what SingTel Optus chairman Ang Kong Hua has done; his share-buying spree making him the 19th largest investor in SingTel's fierce competitor in the city-state, Mobile One (M1).
Conflict of interest? Not in multi-tasking Singapore, where finance minister Lee Hsien Loong, the son of Senior Minister Lee Kuan Yew, also controls the central bank and is married to the woman, Ho Ching, who runs the country's leading investment company, Temasek Holdings, which is owned by the finance ministry that's run by Lee Hsien Loong, the brother of Lee Hsien Yang, the boss of SingTel, which is majority-owned by Temasek, which, well, you get the idea...….
Singapore maintains it adheres to the world's best practices of corporate governance and we know that because Ang's predecessor as SingTel Optus chairman, another Singapore Inc stalwart Koh Boon Hwee, said so when he was chairman of the government's corporate governance board. That board decided that Singaporeans could sit on as many corporate boards as they could manage, a decision which suited Koh because he sat on 47.
Those contradictions were duly pointed out by foreign journalists in Singapore, not exactly the government's favourite people. But facts are facts and Koh has since resigned a few of his board positions and Ang has since sold his M1 shares.
Ang is unrepentant. "SingTel Optus competes with other listed telcos in the US and Asia-Pacific," he said in an email to Bloomberg News. "If the shares of these companies represent good value, I would similarly feel no conflict if I decide to acquire shares in them."
Long-suffering Telstra shareholders will doubtless be pleased to hear that