Singapore's Lee Family and Nepotism

A blogger feels the wrath of the ruling family

Singapore’s ruling Lee family, apparently angered by a comment made on a Singapore-based blog Temasek Review Emeritus, has come down hard, with Prime Minister Lee Hsien Loong, his wife, Ho Ching, his brother Lee Hsien Yang, all demanding apologies for intimating that they have filled top government positions with family members.

Lee Kuan Yew became prime minister of Singapore in 1959 and ran the place until 1990, when he stepped down to become a senior minister and then was appointed minister mentor by his son, with many of his critics alleging he has continued to run the island republic from behind the scenes. After an interregnum from 1990 to 2004 when Goh Chok Tong held the premiership, Lee Hsien Loong took over as prime minister and has led the People’s Action Party government since.

Among other Lee family members who have held high positions in government are the elder Lee’s daughter, Lee Wee Ling, who is director of the National Neurological Institute. His other son, Lee Hsien Yang, was chief executive officer of Singapore Telecommunications from May 1995 until April 2007. He was appointed the chairman of the Civil Aviation Authority of Singapore in 2009.

Ho Ching, Hsien Loong’s wife, has run Temasek Holdings, the sovereign wealth fund controlled by the Singapore Ministry of Finance, since 2002 after serving as president and chief executive officer of the government-owned Singapore Technologies. Although she has been criticized for some disastrous investments, including one in former Thai Prime Minister Thaksin Shinawatra’s Shin Corp that Fortune Magazine called a "spectacular misjudgment" as well as several others in flagging western investment banks, she has never been asked to step down.

TR Emeritus, as the blog is known, hastily took down the article, which is no longer available. Apparently written by a contributor or in response to another article, it has been described as pointing out that the elder Lee’s appointing Hsien Loong prime minister and Hsien Loong appointing his wife to head Temasek Holdings “was nothing short of ‘cronyism’ and nepotism.”

The blog has posted a full apology, saying, among other things, that “we recognize that the article meant or was understood to mean that Prime Minister Lee Hsien Loong had secured, or was instrumental in securing, the appointment of his wife, Mdm Ho Ching, as the Chief Executive Officer of Temasek Holdings (Private) Limited for nepotistic motives. We admit and acknowledge that this allegation is false and completely without foundation. We unreservedly apologize to Prime Minister Lee Hsien Loong for the distress and embarrassment caused to him by this allegation.”

Richard Wan, representing TR Emeritus, was unreachable. He posted a statement on the website saying he would no longer respond to questions from the press. He also asked TRE readers to “refrain from making such comments about Mdm Ho Ching with regard to her appointment in Temasek Holdings (Private) Limited. Any such allegations put up by anyone on TRE will be deleted.”

That may not have been enough. On Feb. 17, the government-controlled New Paper reported the parliament had pushed through an amendment to the Evidence Act that gives the courts the discretion to admit deleted online posts as evidence. The amendment, according to the paper, gives the courts “the discretion to consider relevant evidence by widening the admissibility of several categories. Among them are changes to the computer output evidence - which means computer printouts and sound and video recordings can be treated just like other evidence in Singapore courts.Read more.

Malaysia's Latest Proton Saga

Thursday, 16 February 2012

Questions of insider trading in national car shares remain unanswered a month after sale to a Mahathir crony

For nearly three decades, Malaysia’s national car project, Proton, has suffered through endless troubles, nearing its demise several times only to be propped up again and again by the government.

The government has regularly sought foreign buyers to come in and save the project, Perusahaan Otomobil Nasional Bhd. The carmaker has cost the country’s consumers billions in lost opportunity costs from the steep tariffs levied against other carmakers in addition to the losses the company made on its own, estimated at US$2-3 billion, plus the cost of building its factories. The preferential tariffs haven’t stopped consumers from turning to other makes anyway.

In January, DRB-Hicom Bhd, controlled by billionaire Syed Mokhtar al-Bukhary, a longtime Mahathir friend and United Malays National Organization crony, agreed to take the ailing carmaker off the hands of Khazanah Nasional Bhd., the state-owned investment fund which owned 42.7 percent of the shares after taking the company over during an earlier period of distress. The subsequent events have raised many questions of insider trading, none of which have ever been addressed either by Proton, Hicom or Bursa Malaysia, the country’s stock exchange.

In the two months prior to the announcement of the sale, Proton’s shares went on a wild ride, beginning on Nov. 14, when the shares traded thinly, at only about 300,000 per day at a price of around RM2.70 (US88 cents)

According to official announcements by Bursa Malaysia, the Kuala Lumpur main board, the shares took off on Nov. 15, rising to RM3.21 on volume of 4.3 million traded. Over the next 12 days, daily volumes averaged 4.4 million shares. By Dec. 5, volumes increased to 20 million shares per day – 60 times the November average - with the price rocketing up by nearly 25 percent over the period to RM4.50 per share.

Proton’s Wild Ride
It wasn’t until Dec. 5, three weeks after the shares began to gyrate that Bursa Malaysia issued an Unusual Market Activity enquiry. On the next day, Proton announced: “"The Board of Directors of Proton wish to clarify that after making due enquiry with the Board of Directors and major shareholders, the company is not aware of any reason for the unusual market activity in the shares of the company recently, and further, that there is no material corporate development not previously disclosed."

Certainly not! On Jan. 17, DRB-Hicom announced it would buy Khazanah’s stake in the carmaker for RM1.291 billion, the equivalent of RM5.50 per share. That meant that those smart enough – or informed enough -- to buy the Proton shares in November at RM2.70 had effectively doubled their money in two months.

Insider trading?
“The above chain of events makes a bad overall impression. It looks very much that certain parties were privy to inside information,” wrote M A Wind, who blogs for Asia Sentinel. “Why was Bursa Malaysia so late with its Unusual Market Activity query? The share price of Proton had increased already over three consecutive weeks by a whopping 70 percent while daily turnover had risen 20-fold when it finally took action.”

The announcement on December 6, 2011 by Proton that neither it nor Khazanah Nasional were aware of any unusual activity looks puzzling to say the least. The market was rife with rumor, but neither Proton nor Khazanah Nasional said they were aware of any activity.

More suspiciously, the share price more or less stratified at RM 5.50 several days before the final announcement on January 16, 2011 – the DRB-Hicom offer price, which seems to suggest that unknown parties might have known what it would be.

Also, both Proton and DRB-Hicom appeared remarkably passive in issuing announcements, both only responding to queries from Bursa Malaysia (most notably on Dec. 6, 8 and 13, 2011 and Jan. 9, 2012), not initiating the announcements themselves although the stock exchange’s website says: "We place significant emphasis on timeliness, adequacy and accuracy of disclosure to enable investors to make informed investment decisions."

”Let’s be clear,” said a Kuala Lumpur-based investment banker. “All of Malaysia is one big insider-trading casino. There aren’t any other kind of trades.”

The banker declined to speculate on who made the killing. However, he said the clues point to top political figures. The car company was government-owned, the new ownership is close to top United Malays National Organization figures. Read more.

Penang:A Gem Or A White Man's Bluff?

Hantu Laut

Yes! I was there few months ago.

Penang is different from the rest of the Peninsula, it has its own characters and charms, a laid back and quaint place, more a resort type destination rather than an industrial city with a burgeoning economy.Very Chinese, a piece of chinoiserie of some kind, keeping much of its old traditions.

Its hawker's foods are lusciously tasty and cheap.It retained more of its colonial past while the rest of the Peninsula tried very hard to erase it and had succeeded in doing so.

More like my home state Sabah, unpretentious, rustic, friendly, hospitable and no hang-ups.

It was once called the "Pearl of the Orient" before other more enchanting destinations like Bali, Phuket and many others in the region, discovered and developed more rapidly that had put it back in the backwater.

The streets are much cleaner than before but the waterfront facing the Esplanade is still littered with rubbish of all kinds.....discarded plastic bottles,plastic bags and animal carcasses are eyesores disfiguring the waterfront.

Former Prime Minister Mahathir Mohammad while still the PM then, disgusted with its dirtiness, called it the "Rubbish of the Orient". The man who once ran this tiny island with negligence is still in the Federal cabinet. I need not mention his name.

The current state government is doing an excellent job trying to revive Penang's past glory to lure back the tourists and had embarked on excellent tourism promotion (paid for or otherwise).Read this New York Times article on Penang.

White men loves this kind of place.

My stay at the Hard Rock Hotel was pleasant and there were more domestic tourists than foreign tourists when I was there.

My wife says, probably, off-peak season.

Maybe, I'll make another visit a year from now to see whether Penang has weathered well under Pakatan's care.

A grandmother, a baby and Sabah’s poverty:A Sabah Story

FEB 15 — Waiting at the check-in lounge for my flight home to Kota Kinabalu, I saw a woman in her senior years looking rather forlorn. She looked to be at least in her 60s; far too old to be the mother of the newborn in her arms. Besides the baby, she was also clutching what looked like one of those carriers that would hold baby bottles and nappies.

When it was time for the plane to depart, she rose, awkwardly trying to juggle the baby and the bag.

I looked around for someone accompanying her, some relative or friend, but she seemed to be alone.

“Makcik seorang ka? (Are you alone, auntie?)” I asked.

She nodded. I asked to carry her bag and she thanked me, her eyes full of relief and the tenseness about her easing a little.

We chatted for awhile and she told me the baby was her daughter’s. The baby’s parents were both working in the Peninsula because it was the only place to find work. But neither earned enough for them to be able to afford childcare so it was left to her to look after the infant.

A steward, noticing that I’d helped the old woman with her bag, smiled and thanked me. At least I wasn’t the only one who noticed. Sadly the rest of my fellow passengers were a little too preoccupied to lend a hand to the old woman. I am sure the steward would likely have taken her bag for her on the plane; he took it from me when she reached her seat, placing it in the overhead compartment for her.

She had another relative waiting for her when she arrived at the airport, fortunately. Otherwise, she, the baby and the bag would be on a rickety bus home and I’m not sure if someone would have been kind enough to take her bag.

I look at the old woman and think of my middle- and upper-middle class friends in the Klang Valley with helpers. They fuss about their “stupid”, “untrustworthy” help and few things are as discussed by these “tai-tais” than how hard it is to find good help.

But maids are a luxury; they don’t see that. The working class can’t afford maids and rely on relatives to look after the children while they work. But what if there is no doting grandparent or widowed aunt? Affordable childcare facilities aren’t easy to find and are out of reach for families that take home less than RM2,500 a month.Read more.