May 25, 2001

Time for a bit of Sing and Tell

IF glowing references in a father's widely-read autobiography are any guide to parental favouritism, then Australia's newest telecoms titan is hardly the apple of his daddy's eye

In the second volume of his memoirs, From Third World to First World, Singapore strongman Lee Kuan Yew evokes his eldest son, Lee Hsien Loong, Singapore's Deputy Prime Minister, some 11 times over 18 pages. This follows eight mentions over nine pages in the first volume, The Singapore Story.

Now contrast this with the comparatively short shrift meted out to Lee's 43-year-old youngest son, Lee Hsien Yang – chief executive of Singapore Telecommunications and The Man Who Would Be King of Australia's second-biggest carrier, Optus. Little Brother Lee  makes brief appearances in his father's memoirs, just once in volume one, and twice in the second.

While father Lee revels in Hsien Loong's achievements, he can appear almost defensive about Hsien Yang's. Five of the nine pages of the chapter devoted to the Lee family go into considerable detail about Hsien Loong's stellar academic record, his rapid rise through Singapore's army, party and government ranks and his sure-handed steward-ship of the economy in difficult times.

"Loong was always interested in what was going on in the country and in government," his father writes warmly. There are interesting anecdotes about his learning Malay, of how he raised an albino son, and of his battle with cancer. It seems that for the father, however, the SingTel boss is an anecdote-free zone. Almost as an aside, he notes that Hsien Yang, a Cambridge First, had "the potential to be head of the civil service, [but] preferred the challenge of the private sector".

"When he was promoted to (SingTel) CEO, my critics again alleged nepotism. It would have been a disaster for him, and for the system of meritocracy that I had set up, if he had been appointed because of me. The officers he served with and his peers knew better," Singapore's elder statesman maintains. "So did the fund managers. SingTel shares did not weaken."

There are many Singaporeans struggling with Lee Hsien Yang's stewardship of SingTel who might take issue with that last remark. And only a few months ago so did many fund managers. Even before a slump of 22 per cent in April this year following Lee's $17 billion bid for Optus, the performance of SingTel shares during his six-year watch as CEO has been stagnant at best, while those in the global telecom sector have soared.

But this being the world of tightly wound Singapore, very few investors or analysts are willing to stand up and be counted on that issue. Still, that hasn't stopped the buzz in the kopitiams, Singapore's old-style coffee shops where locals gather to gossip and grumble – often about money and their lot in life. And they grumble about the stock horror of SingTel, which in 1994 had tapped some of their life savings to support its partial privatisation.

SingTel's punters have ruefully observed how their well-bred Brigadier-General boss was outflanked by Hong Kong's Richard Li and Malaysia's Dr Mahathir Mohamed in acquisition assaults on Hong Kong and KL. They grumble that if SingTel was truly the equal of the foreign telcos it compares itself with, a chief executive with Lee's recent record of outs and flat profits would be struggling to keep his job. Look at the US's AT& T, they say, it's had three CEOs during Lee's term of tenure.

While SingTel monopolises Singapore's version of the world's three hottest investment sectors of recent years, telecoms, media and technology – sectors where elsewhere merely arriving at the office seems to prompt a price rally – its profits actually fell in 1999-2000 to levels lower than those of Lee's first year in the top job, 1995-96.

And every time SingTel pleads to be assessed by the standards of the global telco family, and not as a member of the Lee family, the softly-spoken Lee Hsien Yang has to endure the ignominy of journalists and analysts – pointedly foreign not local – asking him uncomfortable questions about his future, just as they might do of his peers; people such as Telstra CEO, Ziggy Switowski, British Telecom's Sir Peter Bonfield and Bernie Ebbers of WorldCom.

And he doesn't seem to like it. At a rare press and analyst briefing last May – the first after the embarrassing deals-that-didn't-happen in Hong Kong and Malaysia – Lee looked like he wanted to be somewhere else, anywhere else, other than fronting SingTel at that particular moment. He fidgeted, stumbled over words, jigged his leg nervously and mouthed unconvincing jargon about how SingTel might be owned by the Singapore Government, but that didn't mean it controlled the company.

When it comes to power flows, a 78 per cent government shareholding is hard to argue with. And SingTel's image that it is – or at least can be – an arm of government, wasn't helped by the 1999 revelation that its internet division had been secretly scanning 200,000 of its subscribers' computers at the request of the Home Ministry. SingTel maintained the activity wasn't an invasion of its customers' privacy.

If the Government or its agencies say something is true, then Singaporeans are generally expected to believe that it is. Publicly defended by his chairman Koh Boon Hwee, Lee maintained that he answered to his board – which includes the chief of Singapore's Army, the president of Singapore's State-owned investment company, the former head of Singapore's telco regulator, and a director of the State-owned radio and TV broadcaster.

Before Optus, there was dark talk of new jobs for Lee Hsien Yang. A mid-ranking ambassadorship was mooted, and then dismissed because, as one telecom analyst who knows him put it, "he doesn't like travelling, he really is a hometown boy". Speculation had it that he might move over to the Singapore Press Holdings board, the pro-government virtual print monopoly. Or go back to the military. Or, like his higher-achieving elder brother and dynamic father perhaps, move into politics.

SingTel's response to the negativity was a charm offensive to humanise the awkward, private Lee: to make him more exciting. He started doing interviews with safe media (which apparently doesn't include this one), appearing on the cover of the Bruneian-owned Asia Inc magazine wear a rollicking laugh and sipping a coffee. (Café society being the latest trend to sweep Singapore.) Investors in search of vision and inspiration learned that Lee isn't risk-averse because he once jumped out of a plane during military training.

And that he likes nothing better than pottering in the garden, and cooking dinner for his corporate lawyer wife and their three young children. Asked what was the most demanding thing he'd done in his life, replied: "I ran a marathon, if that counts. I was proud of myself. It's a long way to go. I was racing against myself. The rest didn't matter. You can always be unhappy about how many finished in front or behind. It's an achievement of yourself." Did the same apply to business? "If you are happy with what you are doing and you think you have done a good job, it doesn't matter."

Asking insiders about Lee yields precious little. The most revealing nuggets are that it's understood he doesn't watch television, and has played the "angel" in a number of local internet start-ups. Bankers say he's very correct and quite precise. "A good listener," notes one, "but [he] doesn't command the room like his brother or father."

Lee's army background, with a military emphasis on order and maintaining the status quo, has been perceived as a negative for a Singapore Inc that is being urged to be more dynamic in its dealings abroad. That's probably unfair to Lee, who battles the structures of SingTel's government ownership (which counted it out of the Hong Kong and Malaysian deals) and may yet prove its nemesis in its dealings with Optus and the latter's sensitive Australian Defence Department satellite contracts.

Now SingTel's spin doctors have begun cultivating a hipper "new economy" image for their chief executive. Lee is said to have urged his lieutenants to call him Hsien Yang, BG, BG Lee, Mr Lee ... "anything except Mr President". And Friday is now "dress-down day" at SingTel. As the company's vice-president of corporate marketing Corinna Choong says, "We hope that by giving our colleagues the leeway to be more relaxed in their dressing, encouraging address on a first-name basis and providing more opportunities for interaction, we can create an office environment where people feel more comfortable and motivated. Certainly, it will help build camaraderie and team spirit."

Lee will need more than team spirit to pull off the Optus deal and cement SingTel as a dominant regional telco. Optus has apparently energised Lee, even if it has not yet done the same for SingTel's share price. After a run of deal-making outs, company insiders say he has enjoyed this particular kill – or near-kill, given that the Federal Government has yet to completely sign off on it – and is angling for more deals.

If Lee does get Optus, it will certainly test his management skills. The near-monopoly-SingTel enjoys some of the world's highest profit margins on its bread-and-butter voice business, while Optus battles it out with the world's most internationally competitive telcos.

And the very private Lee will have to continue to open up, and sell himself, SingTel and Singapore to the sceptical Australian investor. Until now, SingTel has been dealt a fairly easy hand when it comes to critical analysis and intensive scrutiny. But with SingTel listed on the Australian stock market as part of the Optus deal, the company will be subject to a much more robust corporate culture than it is used to in Asia. As one analyst remarked, "that ambassadorship might look quite good after a while".