05 Dec 2001

Stock shock as SingTel goes to hell

Eric Ellis

HE is the $US30 billion man. But that's not how much Singapore Telecommunications boss Lee Hsien Yang is worth - it's how much shareholder value the company has lost over the past five years.
And that period is about how long Mr Lee has been running SingTel, which is now Australia's No.2 telephone carrier, after its $14 billion takeover of Optus in September.
The revelation of SingTel's stunning loss of value comes from a study of corporate wealth generation by New York-based consulting group Stern Stewart.
The study examined more than 5000 of the world's biggest corporations using a capital asset pricing model - a valuation test applied by many of the world's leading investors.
The findings are hardly encouraging for the many Optus investors who took SingTel shares as part of the controversial takeover.
The Singaporeans took more than six months to bed down the deal, amid accusations of spying and compromising of Australian defence assets.
Stern Stewart pegs SingTel in the bottom 20 of the companies surveyed - which would seem to contradict SingTel's frequent claim it has consistently generated wealth for its investors.
Of the regional companies assessed, SingTel is ranked second only to Pacific Century CyberWorks - the Telstra joint venture partner owned by Hong Kong tyro Richard Li. It chewed up $US31.1 billion.
Mr Lee is a son of Singapore's venerated political strongman, Lee Kuan Yew. The 43-year-old was appointed to the top job in 1995 despite having no experience in international telcos.
The Stern Stewart findings would come as no surprise to SingTel shareholders. They've seen their investment tumble more than 50 per cent over the past year, despite the Optus deal and a series of regional acquisitions.
Now listed in Australia and Singapore, SingTel stock trades at about the same levels as its 1995 public offering.
Among the biggest generators of wealth in the survey were US giants General Electric, Microsoft, Wal-mart and Citigroup. GE has generated $US227 billion in wealth for shareholders since 1996.