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Archive for the ‘Corporate governance’ Category

FASgate: Governance issues

In Corporate governance, Footie on 05/06/2017 at 1:45 pm

As FAS is making sweeping changes (In the main to ensure that the power to make decisions do not rest on a single individual such as the president or the general secretary. Example:  the FAS executive committee will now approve payments and expenditure.)

and

as I understand the police are about to forward their findings on FASgate or Donorgate to the AGC, I tot I’d remind readers about the governance issues involved.

The cybernuts cheering on Bill Ng ignored the governance issues surrounding the donation to AFF (which Bill initially said he didn’t know anything about) and when confronted with documentation that he knew, mumbled something and sat down.

The nuts also called the police investigations “fixing” the elections.

All this noise obscures some very important corporate governance issues.

But first a reminder of what happened.

Bill Ng started the ball rolling when he alleged that he didn’t know what his $500,000 donation (made over 11 months in 2014 and 2015) to FAS  went to. There was also another “donation” for the running of Lions XII* that he claimed to be blur about.


Bill Ng’s favourite song?

Sounds like Billy started a joke that had him wife, ex-PAP MP, Zainuddin, and Winston Lee crying. It had to be a joke because how could Bill not know where the money went? He admitted this when he admitted signing the letter Winston Lee produced to rebut him. He no read isit?

Billy the Kid threw a stone at Winston Lee saying he didn’t know where his donation went to,

—————–

Later it emerged that there was documentation (signed by him) that he knew the donation was to the Asean Footie Federation for some management system for Asean clubs yet to be developed (when the donation was made in 2015) and still not developed as of now. An AFF official (Pinoy, if u must know) confirmed that ex-PAP MP, and then FAS president, Zainuddin Nordin, was the man behind the project. He remains silent.


[O]ne of the regional football associations told TODAY that it had never been asked to make donations to support the AFF’s Football Management System.

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Bill, his wife, the ex-PAP MP and Winston Lee were arrested by the police but are out on police bail. They have also been interviewed by the police.

Here are the FAS governance issues:

— Did the senior officials of FAS alleged to have asked for donations (Then PAP MP and FAS president Zainudin Nordin and senior FAS official Winston Lee) have the authority to ask Bill Ng or his clubs (other indeed any other person or club) without the knowledge of other senior FAS officials for a huge donation to a third-party? Such a request by senior officials could be seen as intimidatory.

(Under the proposed changes all donations to the FAS above S$50,000 will be reviewed and approved by the executive committee.)

Today reported that independent candidate “James Lim was shocked to hear that the FAS had asked for donations for an external organisation.”

“I am of course taken aback that FAS would be soliciting donations for an external and even foreign organisation.

“The FAS has no business soliciting funds for AFF when they are always telling the public that it lacks the funds to implement the Strategic Plan.

“Even more shocking is that the donations were not from Bill personally but from the football clubs. Basically, money has been taken out from Singapore football, and from local football clubs.

(Under the proposed changes, FAS cannot solicit donations for foreign organisations.)

“It does not make any sense. Clubs like Hougang are receiving grants and their activities are subsidised with public funds. How can club funds be then channelled out to AFF?

— Should the said officials have told other officials that they accepted the donation from Billy the Kid for AFF?

— Should the said officials have told other officials when the FAS made its donation to the AFF?

————————————————–

“It is also shocking to hear that the FAS Council members were oblivious to such a huge amount of money being moved around.

“Winston has to come clean and reveal what was going on between Bill and FAS.”

FAS elections independent candidate James Lim told Today.

———————————–

— Was someone trying to bribe FAS officials?

— Were the appropriate accounting entries made in respect of the receipt of the funds from TBFC (five in all over 11 months) and the subsequent one-time payment to AFF? (Rumour has it they were entered as donations to FAS. The proper procedure is really complicated and should have involved opening and maintaining a separate bank account.)

— Was the donation to AFF in pursuit of a personal advantage in AFF or FIFA? Here note that Nordin publicly said last year that he wanted to become one of Asia’s delegates to FIFA. Earlier this yr, he declined to contest for a post.

 TBFC governance issues

Under its constitution, can Tiong Bahru FC make the donation to the AFF?

Another governance issue not connected to the above is whether Bill Ng made full disclosure and got approval for rent to be paid to a biz controlled by his wife. If he did, the rental arrangements are halal, if not they are haram. Rumour has it that club officials told the police that while there was disclosure (and approval of) that the rent was paid to a business where Bill’s wife has an interest, there was no disclosure about how the rent paid compared to other neighbouring rents. Lawyers will have a profitable time arguing if such a disclosure was needed for disclosure to be valid.

——————————–

*The Football Association of Singapore’s (FAS) is making sweeping changes to its processes and procedures, a month after a new council was voted in. This comes in the wake of controversy in the run up to the FAS election over a S$500,000 donation by Tiong Bahru Football Club to the ASEAN Football Federation, made at the request of then-FAS president Zainudin Nordin.

A committee led by deputy president Bernard Tan on Thursday (Jun 1) announced a raft of proposed changes to the way the FAS is governed*.

http://www.channelnewsasia.com/news/sport/new-fas-council-unveils-plans-to-fix-governance-issues-8904402

**I’ll let Today tell the story

The other “donation”

TODAY also queried the FAS over Ng’s claims that he was asked to donate to the LionsXII as they had told him the budget to run the now-defunct team had “overrun”.

Ng had said that as a result, a S$200,000 sponsorship that he had secured for Hougang’s S.League season was channelled into supporting the LionsXII’s expenses for playing in the Malaysia Super League (MSL).

The FAS spokesman said: “Prior to the commencement of the LionsXII’s inaugural season, FAS sought revenues through various means including but not limited to sponsorships, donations, grants, and corporate partnerships and tie-ups…we approached corporations, partners and individuals to seek their support towards the LionsXII. Bill was among the individuals whom we had approached for referrals.

“He subsequently introduced a company which donated an amount of S$200,000 to the LionsXII’s campaign for the 2012 season.”

The spokesman also refuted Ng’s claims that they had gone over the LionsXII budget.

“The cheque was issued to FAS in November 2011 – some six weeks before the LionsXII kicked off their inaugural season,” said the spokesman. “Hence, we are baffled by claims that the budget for the LionsXII had ‘overrun’. This certainly was not the case.”

Referring to Ng’s claim that the S$200,000 for Hougang was channelled instead to the LionsXII, the spokesman said that while the FAS had asked for donations to support the LionsXII, it had always placed the S.League as a higher priority.

“While we sought to raise revenues to support the LionsXII’s inaugural season, we had also communicated to our sponsors and donors that the S.League will always be our focal point as it is the heartbeat of Singapore football,” the spokesman explained.

“This is why we ensured that we secured an increase in funding and subsidy for our clubs before we entered the partnership agreement with the Football Association of Malaysia (FAM) in 2011.”

 

 

 

 

 

 

 

 

 

HSBC makes history

In Banks, Corporate governance on 18/03/2017 at 7:26 am
An outsider is appointed chairman for the first time ever.

We shareholders hope he will bring the fresh ideas needed to solve the bank’s problems. The share price has done no where in the tenure of CEO that’s going to leave next year. Though to be fair, dividend yield of around 6% is not to be sneered at.

From NYT Dealbook

HSBC Looks to an Outsider

HSBC may be based in London, but it generates much of its profit in Asia.
And so, in a nod to that, it has named Mark Tucker, the chief executive of the Asian life insurer AIA Group, as its next chairman.
Mr. Tucker will replace Douglas Flint, who has been chairman since 2010, in October.
Although Mr. Tucker has spent much of his career in the insurance industry, he was group finance director for a year at HBOS, a British bank that nearly collapsed during the financial crisis and is now part of Lloyds Banking Group.
He has also been a director at Goldman Sachs since 2012, a position he will leave when he joins HSBC.
Mr. Tucker’s first task will be to find a replacement for Stuart Gulliver, who has said he will quit as chief executive next year.
But there are other challenges: The bank has missed a string of financial targets and is in the midst of a restructuring.

AHTC accounts: WP outsources decision to recover monies

In Corporate governance, Uncategorized on 23/02/2017 at 7:45 am

AHTC chairman Pritam Singh said in a statement on Friday (Feb 17) that the Workers’ Party-run town council has been studying KPMG’s Past Payments Report since it was issued on Oct 31, 2016 and “while AHTC’s key officials have a different perspective from the audit team on key aspects of the report, AHTC believes that it is in the interests of AHTC and its residents to appoint an independent panel to review the findings and take such action as deemed appropriate to safeguard AHTC’s interests”.

CNA

So what will happen if the independent panel appointed to review the findings of a KPMG report agrees with the findings and recommendations of KPMG? KPMG said the town council had “serious flaws” in governnace and had made improper payments amounting to millions of dollars to third parties. It recommended that the amounts be recovered.


What else the report said

The KPMG report said the town council’s “failed control environment exposed public funds to the potential for misappropriation and civil or criminal breach of trust, and that the Town Council may potentially look to the Town Councillors for the recovery of losses arising from any breaches of their fiduciary duties”.

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The WP TC members would at the very least be shown to be a bunch of cocks who don’t do accounting.

So one assumes that the WP has a plan.

So are the WP TC members that confident they can get the independent committee to see things from the WP’s perspective?

Three professionals were appointed to the panel following consultation with HDB.They are panel chairman Philip Jeyaretnam SC, and members Mr N Sreenivasan SC and Mr Ong Pang Thye (managing partner of KPMG LLP).  The Court of Appeal also approved of the panel.

Interesting a man from KPMG is part of the team reviewing KPMG’s report.

Bit of ownself check ownself ain’t it?

So what weed are the WP TC members smoking? Do they really think the panel will say the findings and recommendations of the report are rubbish?

Maybe they have new information that they think will make the panel say that the report is no longer relevant in the light of the new info? Possible but not probable.

As I see it, the decision to get a “independent” panel to decide on the actions the AHTC has to take as regards the report  shows that the WP TC members have hoisted the white flag. They have no more room for manoeuvre, having run out of road. The TC members have to make the decision to start the recovery process, or explain why they are refusing to attempt recovery.

If the former, there will be unhappy suppliers and service providers who may have tales to tell. If the latter, the stench will get worse at the very least. It is likely that a “concerned” resident (Chen Show Moa?)living in the area would ask the courts to compel the WP TC to recover the monies.

At worse, a grass-root activist will sue the TC members in their personal capacity. The 15k a month each wanking MP gets will be insufficient recompense in such a event.

So better to get others to make the decision to recover monies. Can tell all those suppliers, “Not our decision leh.”

 

 

 

 

1MDB: What did Goldman know and when?/ Plausible deniability

In Corporate governance, Investment banking, Malaysia on 26/12/2016 at 4:57 pm

Goldie is Trump’s go to bank for senior personnel for his administration. Maybe because it knows how to do shady deals using other people’s money while being able to claim plausible deniability: “We know nothing. Nothing.”

FROM NYT Dealbook

A 1MDB Cloud
Goldman Sachs may find its profile improving under the Trump administration, but the firm is also coming under heavy scrutiny related to an investigation into a sprawling international money laundering and embezzlement scheme.
Prosecutors have said that billions of dollars that Goldman raised for the government investment fund 1Malaysia Development Berhad, or 1MDB, were channeled into personal bank accounts and ultimately used to buy paintings, luxury real estate and investment stakes in movies like “The Wolf of Wall Street.”
The question investigators are asking now is, how much did Goldman know?
Goldman said it believed the money was being used to buy legitimate assets for the investment fund.
Jack Blum, a lawyer who led corruption investigations for several Senate committees, said that Goldman should have done a thorough investigation of what 1MDB was doing with the money.
“It is a very serious problem when a company is making a hell of a lot of money out of something and everybody in the place says, ‘I don’t know about it,’” Mr. Blum said.

Calvera (the bandit chief “farming” Mexican peasants in The Magnificent 7 :

If God didn’t want them sheared, he would not have made them sheep.

S’poreans should learn this trick from the Americans

In Corporate governance on 22/11/2016 at 5:18 pm

Wonder if former BSI banker Yeo Jiawei had sought lawyers advice over his actions?

In response to DPP Tan’s suggestion that Yeo met both men because he knew the CAD was investigating him for illicit transactions, Yeo said he disagreed.

“None of my transactions are illicit,”

(Part of former BSI banker Yeo Jiawei cross-examination byDeputy Public Prosecutor Tan Kiat Pheng, as reported by BT.)

Somehow I doubt it as if he he would have raised  the “advice of counsel” defense and that he was acting in good faith because his lawyer had cleared his actions.

In the infamous case involving Sun Ho, her hubbie Kong Hee and his church team never got legal advive on the legality of the transactions to fund Sun Ho’s Hollywood lifestyle. They relied on an “Uncle” who was the church’s auditor. He like the German sergeant in Hogan’s Heroes saidv”I know nothing. Nothing.”

In the US, where no-one does anything without getting the advice of counsel according to the NYT Dealbook:

The “advice of counsel” defense is raised with increased regularity in white-collar crime cases, often coupled with its close cousin – acting in good faith.

WHITE COLLAR WATCH

Martin Shkreli May Point the Finger at His Lawyers

 

 

S’pore stock mkt is value for money?

In Corporate governance, Financial competency on 07/11/2016 at 12:01 pm

Article talks of activist investors KPKBing

http://www.bloomberg.com/news/articles/2016-11-03/activist-investors-take-aim-at-singapore-buy-pray-hope-model

Funny the article doesn’t mention that lots of cos have a controlling shareholder that has more than 51% of the shares. Some of the riny ones even have a controlling shareholder with 75%. So there’s naturally a big discount to account for liquidity and governance issues.

 

KPMG report on AHTC: Notice the deafening silence?

In Corporate governance on 05/11/2016 at 9:24 am

But first some other observations:

Obvious that Low is in now the front man in fighting the PAP administration. Auntie and her babi are silent having made a hash of things last time round, he can’t hide behind them.

Not that he is any better. In fact he sounds like he’s auditioning to join the PAP’s Comedy Club for failed comedians where Tharman,PM, Hng Kiang are the founding members.

Low said the latest  KPMG report on Aljunied-Hougang Town Council (AHTC) did not reveal more than what had already been set out in the Auditor-General’s report on 2015.

Err so can he point out where AGO report got ever say that

“While our work was not focussed on identifying potential criminal acts arising from theissues we observed, we are advised that, had the shortcomings … been committed deliberately, they could amount to criminal conduct, the
implications of which the Town Council should consider.”

And if similar how come instances are different from that of AGO report? He got read KPMG report mah?

Now as to the silence.

First there’s Auntie. How come she no say again, “Charge or sue us”? She said that last time.

And where’s Andrew Loh and the usual suspects who die die said WP is whiter than white?

Oh I forget Andrew Loh is PAPpy after realising that he has to pay “peanuts” for his by-pass because PAP so compassionate to poor gut like him even if he was anti-PAP.

But where are the others?

Got nothing to say isit? Because convinced that there are really irregularities?

Gregory (Scotland Yard detective): “Is there any other point to which you would wish to draw my attention?”

Holmes: “To the curious incident of the dog in the night-time.”

Gregory: “The dog did nothing in the night-time.”

Holmes: “That was the curious incident.”

Silver Blaze by  Sir Arthur Conan Doyle

 

And SGX wants to list dual-class shares?

In Corporate governance on 30/08/2016 at 1:50 pm

When we don’t have protection of US style laws and culture? Singapore does not have, or want, a culture of class-action lawsuits as in the United States. That’s a key feature that helps to keep founder shareholders in check.

http://blogs.reuters.com/breakingviews/2016/08/24/singapore-eyes-last-trick-in-the-book-to-win-ipos/

Even in the US with a culture of class-action lawsuits, there can be problems with dual-class shares.

A dual-class stock system does not necessarily allow the founder to build a company. It can be abused as the founder’s ownership level declines and he giveshimself private benefits. And a public corporation should not be run forever NYT Dealbook reports:

The Deal Professor’s Lessons from the Viacom Dispute

After Viacom’s ownership saga, Steven Davidoff Solomon offers some lessons that can still be put into use:

1. Remember what your end-game is and what is reasonable given your situation. Philippe P. Dauman, the outgoing chief executive, seems to have failed to have recognized that he faced an uphill fight — despite having practiced law himself. He also seemed to be unaware of the public-relations aspect of his fight over Viacom.

2. Be aware of your own loyalties — corporate officers are better off leaving their loyalty with the company, where it legally belongs.

3. Bad governance breeds bad conduct. In the case of Viacom, everyone shares the blame, but Sumner M. Redstone particularly so. He ran Viacom as his personal fief.

4. Litigation has its uses, but using it as a corporate weapon can lay waste to a company.

5. A dual-class stock system does not necessarily allow the founder to build a company. It can be abused as the founder’s ownership level declines and he gives himself private benefits. And a public corporation should not be run forever as a family business. [Emphasis mine]

Let us now hope that those involved in the dispute devote just as much energy to fixing the company’s governance problems and ensuring Mr. Redstone is appropriately cared for.

Sigh the FTs in SGX are screwing us again OL, OK I know the CEO and chairman are true blue S’poreans. But there are FTS all around them.

1MDB: Bring on the clowns

In Accounting, Corporate governance, Malaysia on 29/07/2016 at 1:18 pm

1MDB had previously said that nothing was missing and pointed out that  the accounts were audited by the international firm Deloitte. After the DoJ’s action in freezing assets, 1MDB announced that their accounts audited by Deloitte for 2013 and 2014 cannot be relied upon.

Then Deloitte resigned.

Guardian account of the 1MDB sagahttps://www.theguardian.com/world/2016/jul/28/1mdb-inside-story-worlds-biggest-financial-scandal-malaysia

Why HSBC owed UK one cont’d

In Corporate governance, Hong Kong on 22/07/2016 at 2:30 pm

As I reported earlier many shareholders were disappointed that HSBC decide to remain HQed in the UK, and not retuen to HK.

Then it emerged that in 2012 Mr Osborne, the then UK Chancellorm interceded in the US Justice Department’s investigation into HSBC over money laundered through its American branches by Mexican drug lords. The DoJ was considering bringing charges on top of the fines it imposed on the bank, Britain’s biggest, but Mr Osborne argued that this would destabilise a “systemically important financial institution” and lead to “contagion”.

Now NYT Dealbook tells us more about how this intervention affected the DoJ’s decision to go easy on the maeco-bank

A BANK TOO BIG TO JAIL If you’ve ever wondered why the 2008 financial crisis generated almost no criminal prosecutions of large banks and their top executives, you should read the congressional report, “Too Big to Jail,” Gretchen Morgenson writes in Fair Game.

The report examines the Justice Department’s settlement with HSBC in 2012 after accusations that it laundered nearly $900 million for drug traffickers and processed transactions on behalf of countries subject to United States sanctions. It shows how regulators and prosecutors turned a potential criminal prosecution of HSBC into a watered-down settlement that insulated its executives and failed to take into account the full scope of the bank’s violations.

The bank and its American Subsidiary, HSBC Bank USA, agreed to pay almost $2 billion under the settlement, striking a deferred prosecution arrangement that remains in place. Under such deals, the government agrees to delay or forgo prosecution of a company if it promises to change its behavior.

The report concluded that the Justice Department’s leadership overruled an internal recommendation to prosecute HSBC, citing concerns “that prosecuting the bank ‘could result in a global financial disaster.'”

Peter Carr, a spokesman for the Justice Department, said it was “committed to aggressively investigating allegations of wrongdoing at financial institutions, and, along with our law enforcement partners, holding individuals and corporations responsible for their conduct.”

The facts outlined by prosecutors were damning enough to raise questions about why the bank had not been subject to harsher treatment and fueled the view that large financial institutions are not only too big to fail, but also too significant to be prosecuted criminally.

“The fact that so many of these cases are settled rather than going to court means we don’t get an airing of facts and challenges of facts,” said Edward J. Kane, a professor of finance at Boston College and an authority on regulatory failures. The report should be viewed as “evidence of an abuse of the regulatory system,” he added. “And unless proven otherwise, this is just the tip of the iceberg.”

“Dodge City marshall” investigating 1MDB monies

In Corporate governance, Malaysia on 21/07/2016 at 1:38 pm

The US Department of Justice has moved to seize more than U$1bnfrom Malaysia’s state fund 1MDB.

The DoJ alleges the funds were “misappropriated” and though it did not name Prime Minister Najib Razak directly, he is identifiable in the suit as someone whose account allegedly received huge sums. He has in the past denied wrongdoing.

The US Attorney General Loretta Lynch says that the “Malaysian people were defrauded on a monumental scale”.

among the things bought by the money were:

  • L’Ermitage hotel property and business
  • Park Lane Hotel assets in New York
  • Four California properties
  • Four New York properties
  • One London property
  • A private jet
  • EMI assets, including royalties
  • Van Gogh painting
  • Two Monet paintings

http://www.bbc.com/news/business-36852755

 

Wnat price shareholder value?

In Corporate governance, Financial competency on 04/07/2016 at 1:36 pm

FT reported that Microsoft had to pay US46bn more than it planned to because of a competing bid.

The high price that Microsoft ended up paying could now lead to deeper cost-cutting at LinkedIn after the deal is completed. Microsoft chief executive Satya Nadella warned Jeff Weiner, his counterpart at LinkedIn, during the bidding that “a discussion of cost synergies in the transaction would be necessary” as Microsoft pushed its offer higher.

Well hopefully those who lose their jobs have share options to cushion the loss of their jobs.

HoHoHo, StanChart Cracks Down on ‘Above the Law’ Bankers

In Banks, Corporate governance, Emerging markets, Temasek on 15/06/2016 at 1:50 pm

The bank is cracking down after “recent transgressions” concerning employees’ outside business interests, close financial dealings with co-workers and excessive expenses, Bloomberg reports, citing a series of memos issued over the past two months.

NYT Dealbook

SMRT: 75% pay cut more appropriate?

In Corporate governance on 10/06/2016 at 10:44 am

Christopher Bailey, the CEO of Burberry, the fashion house listed in London, has received a 75% pay cut after failing to meet the company’s profit target last year.

Desmond Kuek’s decrease of 23% from the previous financial year of $2.31m is “peanuts” given the problems (ither than profit) that SMRT is facing.

And the newish CEO of Credit Suisse has asked his board for a 40% cut in his bonus, taking in US$4.5 million for the six months he worked last year.

 

Iceberg crushes Noble House into dust

In Accounting, Commodities, Corporate governance on 07/06/2016 at 1:17 pm

I’ve been thinking of buying Noble House but am still concerned that the accounting issues surrounding the long-term supply contracts could resurface, They’ve not gone away. Maybe the rights issue prospectus can help.

As a reader commented on FT

The only winner in this mess is Iceberg. They nailed it 18 months ago. They were right. They still are right. Their analysis was excellent and everyone who lost money, and that was everyone should be kicking themselves for not heeding their advice.

Btw, the reader remains sceptical that the underwriters will do due diligence on the accouting issues. I suspect he’s right.

Under the just departed CEO, Noble made small investments in commodity producers to secure marketing and supply rights, in some cases for as long as 20 years.

Noble’s  team of quantitative analysts designed structured trades and business models involving long-term commodity contracts.

Critics have said the company booked profits upfront on some of the contracts, which were based on overly optimistic assumptions about commodity prices. Noble has defended its accounting policies, and board-appointed consultants PricewaterhouseCoopers found it had complied with international accounting rules. Err so did Enron, Global Crossing etc. Their accounts were approved by the big four accounting forms, one of which is Pricewaterhouse.

Noble House sends cryptical message?

In Accounting, Commodities, Corporate governance on 01/06/2016 at 12:12 pm

Noble’s board said that it looks forward to working with Alireza in future “should the opportunity arise”.

Hmm this could be boiler-plate PT to signal that the parting was really amicable. but maybe he left because he wants to do a LBO? Ot because he wants to buy from Noble the investments in commodity producers that he made as CEO and which caused all sorts of accounting problems for Noble?

Stock seems to have strong support at the 0,29 level. Hope its “outside” buying. I’m putting the stock on my “Punt?” list.

May want to read this

Here’s Why Noble Group Shares Are Plunging

SGX washes dirty underwear in public

In China, Corporate governance on 31/05/2016 at 3:24 pm

SGX recently released a report detailing for the first time the number of listed-companies which have had their stocks suspended from trading for 12 months or more. This report will now be a yearly affair.

Of the 20 companies, 17 are S-chips (companies which have their operations in China but are listed on SGX), two are Indonesian companies listed here, and only one is a local company.

Surprising that SGX washes its dirty underwear in public.

In the late 90s and noughties, SGX became the place for PRC companies to be listed because SGX requirements were less stringent than those of the Hong Kong stock exchange.

Problems with S-chips soon surfaced which included loan defaults and fraud (missing cash, long-overdue receivables, or significant over-payments to suppliers only to have these amounts written-off later.) In 2009, the Singaporean authorities even appealed to their Chinese counterparts to maintain ‘stringent supervision’ over their companies that list on the SGX. I’m sure they were told to F-off: “SGX collects the fees, SGX’s problem”, I’m sure the S’porean authorities were told.

Retail investors lost serious money, something that even the constructive, nation-building media reported.

Yet despite continuing problems with S-chips (missing cash, long-overdue receivables, orsignificant over-payments to suppliers only to have these amounts written-off later still occur), and London’s nasty experience of Chinese listings on AIM (eg London-based directors not hearing from the China-based CEO, or the corporate “chop” going AWOL after the China-based CEO was sacked), SGX’s plans for the future include attracting  more S-chips.

WTF!

M’sia: Najib’s stepson and 1MDB

In Corporate governance, Malaysia on 17/05/2016 at 10:09 am

Forst it was using 1MDB to make movies, Including “Wolf of Wall St”, it was alleged

Now, from NYT Dealbook

Malaysian Leader’s Stepson Is Said to Fund U.S. Property Deals With 1MDB Money At least $50 million said to have been diverted from a state investment fund in Malaysia was spent on luxury properties in New York and Los Angeles by the stepson of the Malaysian prime minister, according to documents reviewed by The Wall Street Journal and people familiar with the matter.

Why the Feds investigating 1MDB

In Corporate governance, Malaysia on 14/04/2016 at 1:40 pm

[A] pictute of banks working side-by-side with 1MDB as it accumulated worrying levels of debt and became the subject of growing controversy which, in the words of the Swiss financial regulator, looks like a case of “blatant and massive corruption”. U.S. authorities have asked the banks to provide details of their dealings with the fund. At the very least, the 1MDB money trail will leave parts of Wall Street red-faced.

http://blogs.reuters.com/breakingviews/2016/04/12/wall-street-fingerprints-are-all-over-1mdb-scandal/

Not the new Berkshire

In China, Corporate governance on 01/04/2016 at 11:19 am

Anbang’s owner CV in managing money: he maeeied into Deng Xiaoping’s family, marrting a granddaughter. But he’s no Buffett

From NYT Dealbook:

THE UNSETTLING ACQUISITIVENESS OF ANBANG Anbang’s spending spree is a sign that deal-making has gone awry, Steven Davidoff Solomon writes in the Deal Professor column.

Strategic bidders typically triumph over financial bidders in takeover battles because the strategic buyer is an operating company and can almost always pay more. The strategic buyer can expect to earn more through cost savings. The last time financial buyers regularly beat strategic buyers was before the financial crisis as the credit bubble drove a huge feeding frenzy in private equity.

Anbang appears to be trying to build itself into a conglomerate along the lines of Berkshire Hathaway and, like Berkshire, is using insurance reserves to buy assets in businesses such as banking and real estate. It spent over $2 billion on insurers in Belgium and South Korea in 2015.

The funding comes from selling high-yield investment products to Chinese citizens. If this type of company existed in the United States, there would be an outcry, Mr. Davidoff Solomon writes. An insurance company that appears out of nowhere to become a giant after 10 years before buying noncore assets abundantly? We’ve seen this story before and it typically doesn’t end well.

And who would manage Starwood? None of the investors in Anbang’s consortium have much hotel experience. Anbang could keep on the Starwood team, but Anbang has already had trouble managing its new subsidiaries. The management team at its Belgian acquisition left after a few months amid complaints about Anbang’s management style.

Anbang may already have pushed too far. China’s insurance regulator is set to reject its takeover plans because the deals would break rules banning insurers from investing more than 15 percent of their assets abroad, according to the financial magazine Caixin. The Financial Timesreported that people close to the deal played down the report, saying that Anbang believes the regulator would only become involved if the hotel chain purchases were funded with insurance premiums.

Nonetheless, if Anbang were to pursue the deals, there remains the question of whether Anbang could capably run Starwood. There is too much risk here and the deal raises issues about takeovers and the responsibility to look out for the company itself.

Miss targets, get bonus

In Corporate governance, Uncategorized on 12/03/2016 at 12:49 pm

No not PAP ministers, senior civil servants or managers at GLCs; it’s an American listco and once tech giant founded by Hewlett and Packard. No wonder angry Americans want a billionaire outsider to be president. He hates corporate bureaucracy. He runs his biz with the help of family members.

During HP’s last year as a single company, it missed every financial target set by the compensation committee. But the board gave CEO Meg Whitman and her most senior lieutenants got most of their bonus. Discretion loh.

More cracks in Noble Hse’s foundations

In China, Commodities, Corporate governance on 05/02/2016 at 3:23 pm

Look’s like the Yr of the Monkey (starting on Monday) is not going to be good for Noble. I had posted that Monkey, the trickster, could be gd news for the trader.

Two things just went wrong and the effects will be felt in the new year especially as it is trying to refinance almost US$2.2bn of debt bank with bankers concerned about more asset write-offs in the light of a US$300m write-off.

And these two events make it harder has to find a strategic investor to help srengthsn its balance sheet.

First, Nyrstar, the world’s largest producer of zinc, is ending its agreement to supply Noble Group one year early. This deals another a blow to the embattled commodities trader.

And S&P has downgraded fellow trader’s Glencore’s debt to one notch above junk. Noble followed Glencore into morphing from a trader to becoming a mining trader.

Double confirm” Noble Houses’s acoounting is ignoble

In China, Commodities, Corporate governance on 03/02/2016 at 6:20 am

The planned sale of Noble Agri to China National Cereals, Oils and Foodstuffs Corporation for US$750 million was backed by 90% of shareholders who voted at a special meeting in Singapore, last week.

But this means a U$500m writedown on the US$1.3bn valuation ascribed to the Noble Agri stake in Noble’s accounts: seemingly vindicating claims that its accounting is very aggresive. :

Well we’ll soon know what banks think about Noble’s accounting as it’s in talks about refinancing its credit lines. Banks have been pretty accomodative so far but this write-off is worrying them about other potential write-offs in asset values.

It’s online deractor says its claims of malpractice by Noble have been vindicated. Iceberg Research has claimed the company inflated asset values and booked profits on deals long before receiving any cash from the transactions. Mgt rubbished the claims, even getting an int’l accounting firm, PwC (I think) to say its latter practice was halal (kosher).

Noble’s luck will turn in the Monkey yr?

In Accounting, China, Commodities, Corporate governance on 15/01/2016 at 5:11 am

The Noble House, already under pressure in a weak commodities market when blogger Iceberg Research alleged in Feb last yr that the company was inflating its assets by billions of dollars by not fairly representing the value of its commodity contracts. The company has rejected the claims. And gor PWC to bless its methodology forgetting that int’l accounting firms have reputations juz better (slightly) than tabloid journalists and second-hand car salesmen.

But until now, the bad news never stopped despite the effirts of the CEO and the share-buying chairman and founder. Fitch Ratings affirmed Noble Group’s BBB-minus rating with a stable outlook yesterday (Jan 14), remaining the only agency to assign this nvestment-grade rating on Asia’s biggest commodities trader.

Fitch said the decision followed Noble’s improved balance sheet and sufficient liquidity position following its stake sale in Noble Agri, its pledge to cut working capital needs for its metals unit, and continued cash flow generation from its operations,

Both S&P and Moody’s had cut Noble’s rating to junk, sending its bonds and stocks tumbling. Its stock is trading at the lowest since October 2008.

Its credit default swaps contracts trade on an upfront basis (Pay before you bet, credit not allowed) and its CDS curve is inverted, an indication investors consider it a stressed credit. All this makes its bankers keep their fingers on the recall button. For Noble, no credit, no play.

But new yr, new luck? And the yr of the Monkey is coming on 8 Feb. Should be a gd yr for traders.

Maybe by the end of the yr of the monkey the chairman who has been buying shares will have the last laugh. As will the CEO. But then in the Chinese paneheon of deities, the Monkey King is the trickster. So who knows? Ask Buddha, the only deity who can defeat him.

Nmm. I’ll go to the Chinese temple on Tembling Road on Feb 8 and toss the fortune stocks on whether to buy Noble.

Opdate at 6.45am: Maybe it should try to refinance its borrowings early. Glencore juz did this to show its banks are onboard.

A stock to watch.

Ministers’ salary benchmark is flawed

In Corporate governance, Political governance, Public Administration on 07/12/2015 at 1:53 pm

So what value the link?

Below is the Letter from Lex of two Saturday’s ago. It’s another nail in coffin of the argument that our ministers and senior civil servants deserve their multi-million salaries which are benchmarked against the private sector. The pay structure at the top of the private sector is flawed, badly flawed.

Letter from Lex: Let’s spin the wheel!
Readers,
It may indeed be better to be lucky than good; don’t assume you can tell the two apart. There is a good-sized pile of academic research devoted to determining what part of corporate success (measured by return on capital, margins, or what you will) is down to the skill of the boss. Social scientists and statisticians stagger towards consensus along a twisting path. Most of the studies do, however, seem to converge on a couple of points: (a) management skill is a wickedly slippery thing to measure and explain, yet (b) skill seems to make a small but significant difference to performance on the margin, although (c) luck plays much bigger role most of the time. Raising these points often elicits one of two responses. The first: “You damn pinko academics/journalists hate capitalism and will say anything to undermine it.” Alternately: “Anyone who has actually worked in a big company knows that a CEO is a dart-throwing chimp whose characteristic skills are climbing the greasy pole and looking good in a suit.”

Both responses may contain elements of truth. In any case, this week gave the Lex column various reasons to reflect on luck, skill and the grey abyss in between:

Emphasis mine.

Three cheers for the PAP

In Corporate governance, Economy, GIC, S'pore Inc, Temasek on 07/12/2015 at 6:21 am

(Or “Why our GLCs work”)

Talking of the UK (where remember LKY and Goh Keng Swee and Toh Chin Chye- the trinity- studied. I’d describe Lim Kim San, from Raffles College, now NUS, as their archangel who did the work they ordered):

There were significant efficiency improvements in nationalising the postal system and the telegraph network, but the nationalisations of the 20th century were much less successful. This was in part due to the rise of trade unions and the move towards a fully democratic political system. While nationalised companies were left to be minded by technocratic-minded officials in the 19th century, politicians with their eyes on elections started fiddling with them in the 20th. Whenever politicians needed tax cuts to win elections they tended to hack back investment in state-owned firms. They also had a free hand to bloat their payrolls in order to help governments achieve full employment in the economy overall, protected by a system of tariffs and monopolies designed to shield them from competition. And trade unions started to demand excessive pay rises and oppose efficiency improvements, knowing that the state, as owner, would always pay the bill to avoid a fuss at election time.

http://www.economist.com/blogs/economist-explains/2015/12/economist-explains-1

Democracy? What democracy? Unions fighting for workers? What are they? Three cheers for elitism.

But this also rings true: parastatals like national airlines tend to be a handy way for government officials to dish out jobs to cronies. Neither the beneficiaries nor the benefactors of this illicit set-up want to ground the gravy plane.

(From anotther Economist blooger)

StanChart: What ST doesn’t tell S’poreans

In Banks, Corporate governance, Temasek on 06/11/2015 at 4:26 am

And neither did BT or MediaCorp.

The constructive, nation-building media should have reported or analysed or quoted analysts that

— Temasek could have prevented the problems from growing out of control by kicking previous mgt’s ass* when yellow lights were flashing Ang moh tua kee isit? HoHoHo);

— the shake-up restructuring plans are underwhelming investors (shares have fallen over 11% this week; and

— the changes will not be that rewarding.

It’s not me, or TRE cybernuts or Uncle Redbean (they too didn’t), it’s the UK’s Guardian that writes:

The big long-term shareholders – Temasek, from Singapore, and our own Aberdeen Asset Management – are obliged to sound supportive, swallow the lack of a final dividend and back the rights issue. But they should also look in the mirror. The market smelled trouble at Standard Chartered for at least two years, but the pressure from the wings rarely rose above the level of mumbles. Temasek and Aberdeen were too willing to believe the boasts from the highly remunerated boardroom about Standard Chartered’s specialness.

The consequences of delay are now horribly clear: a decade of chasing growth will be followed by half a decade of clean-up and cost-cutting. This story could have been different.

http://www.theguardian.com/business/nils-pratley-on-finance/2015/nov/03/standard-chartered-fails-to-realise-resilience-boasts

Yup it could have been different. Temasek has an over 20% stake in StanChart which should give it a strong voice, if it uses it.

And the MSM doesn’t tell us that some analysts are not impressed by the plans to launch a capital raising, cut 15,000 jobs, slash almost 30% of its $10bn cost base and restructure almost a third of its US$315bn risk-weighted assets.

In fact credit rating has juz been downgraded by Fitch Ratings in the latest sign that the new strategy is not being well received.

And finally the MSM doesn’t tell us that the clean-up will not bring great rewards

Yet these rewards are humdrum and distant. StanChart expects return on equity to remain below 10 percent until 2020. That’s no better than troubled investment banks like Deutsche Bank. A further economic slowdown in its main markets, or increased regulatory demands, could throw it off course. Even after a 10 percent drop on the morning of Nov. 3, StanChart shares trade on about 80 percent of tangible book value, after adjusting for the rights issue. With a long slog ahead, it’s hard to see much upside.

http://blogs.reuters.com/breakingviews/2015/11/03/stanchart-faces-years-of-pain-for-humdrum-gain/

Here’s another interesting insight

Never believe a big bank that boasts that its culture is so different: its lending principles conservative, its business immune to the traditional banking vices of over-confidence, over-expansion and bad behaviour.

For a decade, Standard Chartered told us that its rising income and profits flowed from a unique winning formula. Here was chairman John Peace in the annual report a few years ago describing the supposed magic: “2012 was another year of good performance for Standard Chartered, thanks to a consistent strategy, a stable management team, supportive clients, customers and shareholders, and, above all, our great people.”

(Guardian)

——————————–

*It was already unhappy over corporate governance over the number of executive directors on the biard and had expressed its unhappiness publicly by voting against the  reappointment of the executive directors yrs ago when the bank was a jewel in the Temasek portfolio and management were considered geniuses.

Samsung makes peace with ang moh investors

In Corporate governance on 30/10/2015 at 11:50 am

Samsung plans to buy back 11.3 trillion won ($9.9 billion) worth of stock and pay out up to half of its free cash flow in dividends to placate foreign investors who own 55% of it. That will shrink its cash pile and may help the ruling Lee family reorganise their empire. Samsung will cancel the shares it purchases – equivalent to 5 percent of its total market value based on the closing price on Oct. 28. The company has kept previous buybacks as treasury shares, which it can reissue in the future.

A few months ago, NYT Dealbook reported

SAMSUNG C&T SHAREHOLDERS REJECT ELLIOTT’S ACTIVISM A rare test for shareholder activism in Asia failed on Friday with the Lee family of Samsung securing its future leadership in a face-off with a big New York hedge fund. Shareholders in a Samsung Group subsidiary voted for a merger with another Samsung company, clearing the way for a father-to-son transfer of power in Samsung’s largest family-owned conglomerate, Choe Sang-Hun and Neil Gough report in DealBook. The approval delivers a crushing defeat to Elliott Associates, the activist hedge fund, which opposed the merger.

Elliott owns 7.12 percent of Samsung C&T and had campaigned against its all-stock merger with Cheil Industries, another Samsung company. It had argued that Cheil’s $8 billion takeover of Samsung C&T cheated the minority shareholders by grossly undervaluing Samsung C&T shares. It said it was an unlawful attempt to help Lee Jae-yong, the song of Samsung’s chairman, Lee Kun-hee, inherit the conglomerate. Samsung has pushed back, depicting Elliot as a foreign “vulture” capitalist trying to disrupt an orderly generational change at the crown jewel of the South Korean economy in order to make a quick profit and exit.

The merger carries implications that reach well beyond the Lee family. Samsung, with its 70 subsidiaries ranging from shipbuilding to home appliances, generates a quarter of South Korea’s gross domestic product and its influence in the nation is pervasive. Other family-controlled conglomerates, known as chaebol, will have been watching the result carefully as they are also preparing their chairmen’s children for succession.

Although the South Korean public is increasingly skeptical of such dynastic transfers of power, people remain wary of foreign investors and activisim like Elliott’s is rarely seen in Asia. Publicly traded companies often remain under the control of close-knit family groups of state-backed shareholders, while legal protections for minority investors can be patchy, so many activist hedge funds choose to stay away.

However, all was not lost for Elliot. Cheil and Samsung C&T have promised to bolster corporate governance by increasing dividends and creating a shareholder rights committee after the merger.

1MDB: FBI examining Goldman Sachs

In Corporate governance, Malaysia on 16/10/2015 at 4:28 pm

NYT Dealbook:

Role of Goldman Sachs in 1MDB Transactions Under Scrutiny Investigators at the Federal Bureau of Investigation and the Justice Department have begun examining Goldman Sachs’s role in a series of transactions at 1Malaysia Development Berhad, The Wall Street Journal reports, citing people familiar with the matter.

 

Noble House: Funny this

In China, Commodities, Corporate governance, Emerging markets on 08/10/2015 at 1:38 pm

Noble House is HQed in HK, and listed in S’pore. But its new head of internal audit is based in Stamford, Connecticut in the US: huh? Given all the problems it is facing especially concerns about its accounting practices, I find it strange that the chief internal auditor is not based in its HQ, but a long way away.

The guy has good credentials as an internal audit manager but given that he’s based a lo9ng way from HQ, how is he going to manage his team? If he is employed more for his analytical skills rather than as as a hands-on mgr, why not appoint him as an adviser to the audit committee and the CEO.

Background

Noble has appointed a new head of internal audit. In an email Noble Group CEO Yusuf Alireza said Mr Frank Russo will take charge with effect from Monday (Oct 5).

Mr Russo will be based in Stamford, Connecticut in the US and he will report directly to Mr Alireza and the audit committee.

Mr Russo was previously at GE Capital, where he served as managing director and head of audit for the Energy, Aviation and Insurance businesses. Prior to GE, he spent over eight years at Deloitte and Touche as a senior advisor for Governance, Regulatory and Risk Strategy.

VW: What when wrong

In Corporate governance on 01/10/2015 at 2:05 pm

From NYT’s Dealbook

VOLKSWAGEN’S AMBITION-FUELED SCANDAL Four years ago, Martin Winterkorn announced Volkswagen’s intentions to triple sales in the United States in just a decade. Its plan to do that involved a bet on diesel-powered cars, promising high mileage and low emissions without sacrificing performance. That unbridled ambition has become central to what is becoming one of the great corporate scandals of the age, Danny Hakim, Aaron M. Kessler and Jack Ewing report in The New York Times.

The current crisis has its roots in decisions made almost a decade ago. In 2007, Volkswagen ditched the pollution-control technology developed by Mercedes-Benz and Bosch in favor of internal technology. At the time, Mr. Winterkorn’s determination to surpass Toyota put enormous strain on managers to deliver growth in America. The carmaker needed to build the larger cars favored by the American market, while complying with stricter standards on mileage.

Even as Volkswagen cheated behind the scenes, it publicly espoused its virtues. Advertisements focused on how entertaining, quiet, efficient and clean diesel cars were. It spent $77 billion this year promoting its diesel cars – almost 45 percent of its total for television ad spending, Jad Mouawad and Sydney Ember report in The New York Times.

When confronted with evidence that its system was not performing as promised, Volkswagen aggressively pushed back. It said regulators were not testing properly.

The same year Mr. Winterkorn announced the ambitious plans for the United States, officials from California’s environmental regulator heard about a problem from their European Union counterparts. They were finding discrepancies between the emissions of diesels in the lab and on the road, across the industry. In 2013, the International Council on Clean Transportation, a nonprofit group, proposed testing on-road diesel emissions from cars in the United States. Californian regulators teamed up with them.

The transportation council had not expected to catch anyone cheating. It had hoped to promote a success story for diesel, then put pressure on carmakers in Europe to improve their own emissions.

They tested two Volkswagens and a BMW, and the Volkswagens did not perform well. Yet when they were put on a “car treadmill,” they performed flawlessly.

The California regulators alerted the Environmental Protection Agency and opened an investigation. Volkswagen struck back aggressively, and they went back and forth for months. In April, Volkswagen offered to conduct a voluntary recall in certain models. That did not fix the problem so theregulators changed tack, examining the software, and discovering a parallel set of instructions for emissions controls.

Government officials increased pressure on the company, threatening to withhold approval for its 206 Volkswagen and Audi diesel models. This forced Volkswagen to admit it had installed software to cheat on emissions tests. The revelations were serious, but even some executives at Volkswagen Group of America were kept in the dark about the E.P.A. violation until just before it was announced.

Png the troubleshooter

In Accounting, Corporate governance on 25/09/2015 at 4:43 am

But first: when I read the following extract http://m.todayonline.com/ge2015/wp-activists-help-party-grow-grassroots-network

“This is very much (Mr Low’s) style, he wants to give residents as much face time as possible, and they are also willing to wait to speak to him,” said Ms Ivy Tan, who has been helping out at the Bedok Reservoir-Punggol division since 2012. As such, their MPS often stretch past 11pm.

Mr Chen Show Mao (Paya Lebar) and Mr Muhamad Faisal Manap (Kaki Bukit), meanwhile, set up several stations at their MPS, which are manned by party activists who help to interview residents, transcribe their cases and draft relevant letters..

I couldn’t help but wonder about PritamS style of looking after his constituents. I read the article several times and couldn’t the answer.

Ah well.

Have you noticed that in the last few months, Png Eng Huat is the man beside Auntie, when it came to AHPETC matters? Before that it was always Auntie (chairperson) and Pritam (Both Png anf Pritam are vice-chairpersons). But ever since after the AGO’s report was published, it has been Png beside Auntie. Seems he has been tasked to sort out the mess created by the lack of oversight.

———————————————————————————————-

What did the Auditor-General’s report say?
The report found five key lapses in the AHPETC’s accounts:
1. Lack of governance over transactions with related parties;
2. Poor monitoring of S&CC arrears;
3. Poor record and accounting system;
4. Non-compliance with rules on sinking fund;
5. Insufficient internal controls

https://sg.news.yahoo.com/what-you-need-to-know-about-the-ahpetc-saga-070752226.html

—————————————————————————————-

The PAP had bayed and howled for the the WP to “come clean” (produce the documents), or if the WP was really concerned about its finances, it bring a forensic accountant to reconstruct the accounts. Pritam retorted that they needn’t answer to Parliament, but to residents.

There was  no production of the documents (AWOL? MIA?), and no forensic audit (Too expensive? Concerned about the probable findings?). Instead Png worked with the AHPETC’s auditors and another newly appointed accountant to sort out the mess. The end result was that Auntie could write in the report to the 2014/ 2015 report:

AHPETC has continued to improve its financial processes and management.

AHPETC has cleared most of the disclaimers from the previous annual audits. The remaining observations relate mainly to opening balance issues for which there are still information gaps and legacy issues. There are still areas to work on. AHPETC will continue to improve its financial management.

Still even by the WP’s admission, there’s plenty of work to be done. And the use of the word “mainly” gives the lie to the claim that it’s all the fault of the PAP and PA. Makes one wonder if the WP is afraid of what a forensic audit will uncover?

Never mind the PAP may still force one. https://atans1.wordpress.com/2015/09/21/wps-punngol-east-problem-paps-excuse-king/

WP’s Punngol East problem/ PAP’s excuse king

In Accounting, Corporate governance on 21/09/2015 at 5:08 am

Forensic audit of AHPETC accounts

As someone who wants S’pore to move from a de facto one-party state to something more pluralistic, I was glad that Aljunied remained WP territory. But I was sad that the WP had escaped a forensic audit of the AHPETC accounts. This would have happened if PAP had won.

But I forgot the Punggol East victory.

Independent auditors may be called in to verify the accounts of Punggol East Single Member Constituency (SMC) only if facts and figures are in dispute, said its newly-elected Member of Parliament (MP) Charles Chong.

How not to dispute? For one, Auntie and Low want a fight over Charlie Chong’s alleged statement of a $1m surplus. A lot of he said, she said, TOC said: so I’ll let it be.

More importantly, while the latest set of accounts are pretty decent, as Auntie has said

AHPETC has continued to improve its financial processes and management.

AHPETC has cleared most of the disclaimers from the previous annual audits. The remaining observations relate mainly to opening balance issues for which there are still information gaps and legacy issues. There are still areas to work on. AHPETC will continue to improve its financial management.,

there will be a need for the SMC to ensure that it is getting its fair share of the APPETC’s assets (and liabilities). Given that all the accounts of the AHPETC are qualified, it is reasonable and legitimate to ask for a forensic audit of the AHPETC accounts in order to calculate the SMC’s fair share of the assets and liabilities.

Three cheers for the swing voters in PE.

Illustration of Singapore 2015 general elections by A Good Citizen

Of course, Auntie and Low could agree to be so generous to the residents of PE (thereby short-changing Aljunied and Hougang) that Charlie would keep quiet.

Zorro Lim: excuse king?

When I read this some time back, I couldn’t help laughing at Zorro’s excuse and wondering why Auntie etc hadn’t used such a similar excuse: “We screwed up, but had good intentions.”

Arrogant meh?

Grassroots leaders involved in financial irregularities were only trying to help, said the deputy chairman of the People’s Association (PA), Lim Swee Say, in Parliament on Monday.

“We can fault (grassroots volunteers) for their non-compliance of financial procedures, but please do not doubt them in their passion and commitment in always doing their best for the community,” Mr Lim said*.

(CNA)

The problem is that while Zorro can get away with “I can say with confidence there is no irregularity at the system level”, the WP can’t, given the Auditor-General’s report and its own auditor’s qualifications. https://atans1.wordpress.com/2015/08/16/pap-wp-dont-do-accouting/

———

*More: He said the root cause of these lapses were the “good intentions” of the grassroots leaders.

He went on to tell grandfather stories, by raising various examples of how grassroots leaders were “actually doing their best to serve the interests of the residents and meet the urgent needs of the community.”

… related how grassroots leaders had gone “all around Singapore” to look for face masks when the haze hit the island in 2013.

This was after a community hospital had appealed to the GROs for air purifiers for patients who were being housed in the hospital’s non-airconditioned wards.

When they found a “small store which had limited stock”, the grassroots leaders decided to purchase the masks without first calling for three tenders, which is what is required by the rules.

“… is this a case of non-compliance of financial procedures and rules? The answer is yes,” Mr Lim said. “Is this a case of grassroots leaders and volunteers compromising the interests of the community? The answer is certainly no.”

Backgrounder: PA, where the AGO had conducted test-checks on about 115 grassroots organisations (GROs) under the PA umbrella.Out of the GROs test-checked by the AGO, 30 per cent were found to have financial or accounting irregularities.

Think Indonesia is still the next big thing?

In Commodities, Corporate governance, Emerging markets, Indonesia on 14/06/2015 at 6:08 am

Rothschild Exits Investment in Indonesian Coal The British financier Nathaniel Rothschild’s five-year foray into Indonesia’s coal sector has come to an end after his investment vehicle, NRH Holdings, agreed to sell its 17.2 percent stake in Asia Resource Minerals, the London-listed company formerly known as Bumi, for 23.2 million pounds, or $35.3 million.

NYT Dealbook

It would be “the first and last time” he would get involved in Indonesia. He described the Asian country as “ungovernable”.

As the FT reported, he ended his quest to regain control of the miner, which he founded along with Indonesia’s Bakrie family in 2010, when the company was known as Bumi. He is estimated to have lost about £80m through the investment.

Instead he has agreed to sell his shares to an investor group backed by another Indonesian family, the Widjajas. Their £135m bid is now being backed by Asia Resource’s board. The company was once worth £3bn.

Widjajas 1 Jewish boy 0

Bakries 0 Jewish boy 0

Even M’sian successful tycoons have serious problems navigating Indonesian corporate jungles: think AirAsia.

 

Where were FIFA’s auditors?

In Accounting, Corporate governance, Footie on 12/06/2015 at 2:32 pm

As FIFA Scandal Grows, Focus Turns to Its Auditors. Despite longstanding suspicion of corruption, FIFA has received a clean bill of financial health for 16 consecutive years from KPMG, one of the world’s top auditing, accounting and consulting firms.

“It’s legitimate to raise questions about the effectiveness of the audits, given that the risks were already widely rumored.”
Barry Jay Epstein, a financial-reporting expert, on KPMG giving FIFA a spotless record of financial health.

NYT Dealbook

HSBC: Desperately seeking home-grown John Cryan

In Banks, China, Corporate governance, Emerging markets, Hong Kong on 11/06/2015 at 10:19 am

As a long suffering Hongkong Bank shareholder (But to be fair, I was there when John Bond called a bonus issue and the share price post bonus issue almost reached the pre bonus share price and I was there when the bank called for a massive deeply discounted during the crisis rights issue), who is the inhouse John Cryan*?

John Cryan the incoming UBS boss is rational, cold, deep thinker and no show-off(NYT Dealbook).

Hongkong Bank needs a rational, cold, deep thinker who is not accident-prone.

Gulliver sucks, like Anshu Jain and has to go. Capital markets investment bankers are not usually rational, cold and deep thinkers

As Lex rightly points out, Hongkong Bank is trying to cut fat and grow muscle. Us sporty fatties know that this is real hard work and often fails. Taz why we are still fatties. Gulliver failed to trim fat and is lousy at PR (When Blatter said he couldn’t be expected to know everything at FIFA, I tot of Gulliver’s remarks on managing HSBC.). And now he wants to cut fat and grow muscle?

Failed in cutting costs and now wants to do something EVEN hardER? Pigs are likely to fly first.

He’d likely cut muscle and grow fat. Maybe expansion into the industrial heartland that is the Pearl Delta estuary isn’t the greatest idea? “Poll shows 25% of foreign businesses plan China job cuts,” is the top FT headline on my PC screen.

—-

*And if there’s no-one homegrown do what the Germans did, go find someone and put the chap in charge of the board’s audit committee. Great hands-on experience and sreep learning curve.

I always believe that in most cases there is always someone inhouse in a company with a strong corporate culture who can do the CEO’s job: the problem is finding the guy and the board having the balls to appoint the “unknown”.

Noble: Why I’m not tempted

In Accounting, China, Commodities, Corporate governance on 14/05/2015 at 1:31 pm

Many of Noble’s operations and investments are exposed to the slowdown in China.

And the Chinese economy is still slowing. And the engine of growth is no longer exports or infrastructure spending  or construction. It’s the service sector.

Maybe when I hear that Noble is starting to shipping Pinoy gals to China as wives for barren branches, will I buy the stock.

SGX FTs still want Cina cos to list here?/ Juz look at AIM

In Casinos, Corporate governance, Financial competency on 08/05/2015 at 1:09 pm

AIM in London is having problems with Chinese listings.

First Naibu https://atans1.wordpress.com/2015/03/09/sgxs-fts-still-think-singkies-still-stupid/

Now Sordic (see below).

“The LSE should never have allowed these Chinese companies to list,” the FT reports

Sorbic International PLC Thursday said its former Chief Executive Wang Yan Ting is refusing to hand over the corporate seals and business licenses of its Chinese operating subsidiary, and he is also refusing to handover about GBP7.7 million in cash that Sorbic claims belongs to it, meaning its financial position remains uncertain.
Sorbic last month said it had removed Wang as group CEO and as CEO of its Chinese subsidary, Linyi Van Science and Technique, because it was still frustrated by its inability to move money out of China, a move that Wang was blocking. It wanted the money to repay outstanding loan stock of about GBP3.75 million and to cover its own costs. It also terminated Wang’s role as its legal representative in China, replacing him with a Chinese lawyer, and said it would focus on releasing the funds held within China.

On Thursday, Sorbic said Wang has declined to hand-over the company’s corporate seals, known as chops, and business licences, which he removed from the premises before he was dismissed. The local police were contacted, but deemed Wang’s non-cooperation as a commercial matter and were therefore unwilling to assist, the sorbate food preservative producer said.

That means that the subsidiary’s bank accounts and day-to-day operations still remain under Wang’s control.

“Furthermore, Mr. Wang has confirmed that he has transferred funds belonging to the company which remain under his control and, to date, he has refused to return them,” Sorbic added, saying that management accounts as of end-March showed total cash balances of about CNY72 million, or GBP7.7 million.

“The board has been informed that the company’s factory in Linyi continues to be fully operational and Mr. Wang remains in regular contact with the company,” Sorbic said.

Sorbic is wholly reliant on the transfer of funds from China to meet its operating costs and to repay the GBP3.75 million in outstanding loan notes, which are in default.

Sorbic’s shares were suspended last week at the request of the company pending clarification of its financial position. It said Thursday its shares will remain suspended and it will provide further updates in due course.

http://www.lse.co.uk/AllNews.asp?code=lmn33cn2&headline=Sorbic_International_Says_Former_CEO_Refusing_To_Cede_Control_In_China

 

 

Holding highly paid to account

In Corporate governance, Political governance, Public Administration on 05/04/2015 at 4:53 am

Hmm, maybe PM should think of adapting these ideas for himself, his ministers, senior bureaucrats and CEOs of TLC and other commercial GLCs.

HOLDING EXECUTIVES ACCOUNTABLE Should top executives be required to contribute a chunk of their pay to a pool that would pay penalties if misdeeds were later uncovered at the company? That is a nonbinding proposal that Citigroup shareholders will vote on next month, notes Gretchen Morgenson in the Fair Game column.

A somewhat similar idea can be found in a law journal article by Greg Zipes, a trial lawyer for the Office of the United States Trustee. Mr. Zipes proposes that top executives sign a contract pledging to pay back 25 percent of their gross compensation in the event of major corporate misdeeds. Such proposals, Ms. Morgenson says, are intended to combat the “perverse incentive” that encourages executives to take on huge risks in order to earn rich pay and bonuses, safe in the knowledge that the consequences won’t be costly.

Maybe there should be pools for the ministers, senior bureaucrats and CEOs where they contribute part of their gross remuneration.

If their peers cock up, the money in the pool gets forfeited to the Consolidated Account.

Maybe ministerial peer pressure can keep Lui on his toes. And the ex-SAF generals running SMRT and NOL. CEOs of DBS, SIA, Keppel, CapitaLand etc will make sure that incompetent peers are “moved” on.

World class banks, “peanuts” salaries

In China, Corporate governance, Temasek on 03/04/2015 at 5:00 am

China banks’ CEOs are monkeys? Temasek has significant stakes in three of them.

 

 

Exhibits from FT

 

Lex chinese banks

SGX’s FTs still think Singkies still stupid?

In China, Corporate governance on 09/03/2015 at 1:09 pm

Around the time of the Spring Festival celebrations began, the Foreign Trashes managing SGX (president and head rechie are FTs, CEO is leaving) boasted that SGX was planning to attract Chinese cos here. Remember that in Asean, the Thai exchange raises more money than this global financial centre.

Well looks like the FTs still running SGX are hoping that S ‘poreans have forgotten that they lost money in S-chips.

Here’s a reminder that the Cina have not cleaned up their act. During the Spring Feitval hols, London-based directors of Naibu Global revealed they had suspended shares in the Aim-quoted Chinese sportswear maker because executives in China had refused to update them on the co’s finances. Err maybe now that the Spring Festival is over, they’ll contact the London directors. Somehow I doubt it.

Err pay peanuts, get best CEO

In Corporate governance, Financial competency on 22/02/2015 at 5:06 am

As you can see from below (via a FT article), the best performing public pension fund paid its CEO US$O,45m (18.66% return). The worst paid its CEO 16.3X more at US$7.4m. Yet the fund returned only 10.9%.

The fund that paid peanuts got a good CEO. The fund that paid serious money got a monkey.

So was our very own Mr Peanuts right to say, ” If you pay peanuts, you will get monkeys for your ministers”?

But the problem with high pay relative to performance is cynicism about the people getting it. Our millionaire ministers should ponder the closing words of an FT article about an annual oil “bash” in London last week:
Even as the champagne flowed during the week … “Our clients invited us to this party and they’ve clearly spent a lot of money on it,” said a marine services company executive at one bash. “But why are they not paying us our $80,000?”

I would add: After a while, one stops believing.

Here’s an interesting quote from a rich Oz “After you have about $5m to $10m, your lifestyle doesn’t really change that much,”says Clive Palmer. He’s juz dropped off the top 50 richest Ozzies.

New yr: A feel good vibe is necessary

In Corporate governance, Political governance on 18/02/2015 at 4:43 am

The lunar year is ending badly for the WP.

When someone who is no friend of the PAP administration but who was once part of its security appartus (head of ISD) writes

One of the most glaring lapses is the persistent conflict of interest revealed in the AGO’s report between the Town Council and its managing agents the FM Solutions & Services (FMSS) and the FM Solutions & Integrated Services (FMSI).  How on earth could the husband and wife team of secretary and general manager of the Town Council be the majority owners and proprietor of the managing agents at the same time is the serious conflict of interest problem no amount of explanation that the WP Secretary-General Low Thia Khiang and Chairman Sylvia Lim can give convincingly to pacify the electorate. http://singaporerecalcitrant.blogspot.sg/2015/02/the-astounding-lapses-of-ahpetc.html,

the WP should know that it has problem and it should discount its cheer-teams at TRE and TOC*

My advice to Low is to go to the Quan Im temple in Middle Rd and chiam see tomorrow. I’m sure it’ll tell him to sort out the three lawyers on his team (They constitute 33% of the WP’s parly team). It’ll tell him particularly to ensure that PritamS’s vocal cords are cut and not allowed to heal.

Anyway more, one of these days, about

— how the lawyers let him down;

— were they coerced into silence: what Low wants he gets?

Whatever, either way doesn’t say much about all the four of them.

Anyway, M Ravi should be glad to see the year out, and so should the NSP. The NSP will start the new yr with a team that has Islamic and retro themes. As part of the return to the past theme, expect to see Goh Meng Seng return to the NSP.

Finally it looks like was a gd yr of the PAP. PM’s health problem is behind him

And the PAP must be feeling good for whacking the WP as part of SG50, and a prelude to the new lunar year. And as the whacking being around CNY, it is a good  warm-up to the CNY show.

Wonder if the Lunar show will have a video like this the Chinese are seeing

Of course, if you’re … a Chinese citizen with a dream, the Communist Party would like you to know that “The Communist Party is with you”.

Whether you want to open a diner, or you yearn for a blue sky, a world free of war or a beautiful wife, the message of a promotional video which spread online this week is “Chasing our dreams… and shaping the future together”.

Images of lush countryside interspersed with smiling clowns, farmers and bartenders… I couldn’t help feeling it looked a bit like the kind of TV advert that banks make to reassure you that they are looking after your money, your future and your family.

http://www.bbc.com/news/world-asia-china-31450657

And missing from the feel good narrative was anyone who gets on the wrong side of the Party by raising problems or demanding rights.

Of course, “our” vision would have the WP, SDP, the Chiams, M Ravi, Maruah missing.

Anyway, have a stress-free good time. And make $ next yr.

—-

*Wonder if TRE and TOC going to get ang pow, abalone dinner from ex Aljunied MA or from WP for being so supportive of WP. Their parroting of the WP line sounds like ST’s parroting of the PAP administration. We know ST staff are well rewarded for selling their souls, but I suspect TOC and TRE staff are selling their souls for free.

GE: Not before end August 2015

In Corporate governance, Political governance, Public Administration on 16/02/2015 at 4:44 am

At the very earliest. My earlier take that it would be in June next yr.

https://atans1.wordpress.com/2014/12/17/betterest-indicator-on-whether-there-will-be-early-ge/

This is my latest guess based on the fact that AHPETC will not get any S&C funds until it can furnish clean accounts by end August 2015. This is what Khaw said:

“Make restitution to the residents for the losses to their town council. Submit a clean set of accounts for FY 2013 to Parliament by Jun 30, 2015. Submit your accounts for FY 2014 on time by Aug 31, 2015. Account to Parliament, account to your residents and those in this House.

“These are not high hurdles. These are the basic requirements for any organisation, for anyone seeking to run for office in any organisation. Every town council has been able to do this, including those run by opposition MPs in the past. This is what supporting the Motion means.”

Actually, they are very high hurdles given that AGO reports

  • Inadequate oversight of related party transactions involving ownership interests of key officers, hence risking the integrity of such payments;
  • Not having a system to monitor arrears of conservancy and service charges accurately and hence there is no assurance that arrears are properly managed;
  • Poor internal controls, hence risking the loss of valuables, unnecessary expenditure as well as wrong payments for goods and services; and
  • No proper system to ensure that documents were safeguarded and proper accounts and records were kept as required by the Town Councils Act.

After the CNY hols, if no-one else has blogged on the matter, I’ll try to explain the problems the WP faces in getting clean audit reports given the AGO’s comments. To tease readers: there needs to be a forensic audit (Guess what PAP rats MPs are calling for?), or a really nasty write-down coupled with a promise to “recover” monies from Low’s friends.

It’s that or allow residents to suffer. Because no govt grant (S&C rebate based on HDB units in the area) until then: “Until the weaknesses are addressed, there can be no assurance that AHPETC’s accounts are accurate and reliable, or that public funds are properly spent, accounted for and managed.”*(AGO)

The issue is will Aljunied voters repent voting WP? Or will they be so annoyed that die-die will support WP. Before answering, do remember that the PAP only needs a 5 percentage points swing to win back the GRC.

Meanwhile Auntie and her Singh will have to haul the garbage bins. Let’s hope they are better cleaners than lawyers. Seriously as a trained lawyer, I’m appalled that they and Chen Show Mao allowed this

  • inadequate oversight of related party transactions involving ownership interests of key officers, hence risking the integrity of such payments

LAPSES IN GOVERNANCE OF RELATED PARTY TRANSACTIONS

The town council did not fully disclose the related party transactions in its financial statements, nor did it adequately manage the conflicts of interests of related parties arising from ownership interests of its key officers, in contracts amounting to about S$25.9 million in total, the AGO said.

For example, the AHPETC Secretary was the owner of FM Solutions and Integrated Services (FMSI) – one of two companies engaged to carry out managing agent services, as well as essential maintenance and lift rescue (EMSU) jobs. The Secretary, General Manager and Deputy General Manager of AHPETC were directors and shareholders of the other company, FM Solutions and Services (FMSS), the AGO said.

“The key officers of AHPETC who had ownership interests in FMSS and at the same time performed a role (for AHPETC) in approving payments to FMSS were in clear conflicts of interests,” the AGO said. For example, the town council’s General Manager both issued payment claims as director of FMSS while approving the payment as AHPETC staff.

https://atans1.wordpress.com/2015/02/10/conflicts-of-interest-what-conflicts/

As I said, if this had happened at the club where I was Hon Treasurer, not only would have the Committee been booted out but I’m sure members would have lodged a police report, and complained to the registrar of societies. Btw, a PAP MP was the chairman.

Can readers help me by telling if among the WP’s many words, they apologised for the failure to manage the many conflicts-of -interest better. I can’t find any “We goofed. Sorry.”

For the record: My other election guess in the past (2013) https://atans1.wordpress.com/2013/12/13/why-a-2015-ge-is-now-more-probable/

*Another example of the anti-PAP cyber-nuts’ thinking. When AGO was appointed, the by the PAP administration, they said AGO would clear WP. Now they calling AGO part of “fix” WP team.

Conflicts of interest? What conflicts?

In Corporate governance, Political governance on 10/02/2015 at 4:57 am

Two months ago, I pointed to evidence that indicated that AHPETC did not have an IT monitoring system https://atans1.wordpress.com/2014/12/16/does-ahpetc-have-a-21st-century-it-system/

Turns out I was spot-on because the Auditor-General pointed out, inter alia, that AHPTEC did not “a system to monitor arrears of conservancy and service charges accurately and hence there is no assurance that arrears are properly managed”.and “No proper system to ensure … proper accounts and records were kept as required by the Town Councils Act.” Trumpets pls.

And what does WP say?

We understand that there will be a motion filed in Parliament to debate the matter on Thursday 12 February 2015.  That being the case, the Town Council will give its response in Parliament.

SYLVIA LIM
CHAIRMAN
ALJUNIED-HOUGANG-PUNGGOL EAST TOWN COUNCIL

09 February 2015

Seriously, of all of AGO’s observations*, one to focus on is

  • Inadequate oversight of related party transactions involving ownership interests of key officers, hence risking the integrity of such payments

LAPSES IN GOVERNANCE OF RELATED PARTY TRANSACTIONS

The town council did not fully disclose the related party transactions in its financial statements, nor did it adequately manage the conflicts of interests of related parties arising from ownership interests of its key officers, in contracts amounting to about S$25.9 million in total, the AGO said.

For example, the AHPETC Secretary was the owner of FM Solutions and Integrated Services (FMSI) – one of two companies engaged to carry out managing agent services, as well as essential maintenance and lift rescue (EMSU) jobs. The Secretary, General Manager and Deputy General Manager of AHPETC were directors and shareholders of the other company, FM Solutions and Services (FMSS), the AGO said.

“The key officers of AHPETC who had ownership interests in FMSS and at the same time performed a role (for AHPETC) in approving payments to FMSS were in clear conflicts of interests,” the AGO said. For example, the town council’s General Manager both issued payment claims as director of FMSS while approving the payment as AHPETC staff.

If this had happened at the club where I was Hon Treasurer, not only would have the Committee been booted out but I’m sure members would have lodged a police report, and complained to the registrar of societies.

Doubtless, WP will give an explanation that will be acceptable to the anti-PAP die-hards, but I hope the WP realises that the rabble does not matter (They’ll vote for any monkey even Roy, M Ravi or New Citizen H3, so long as the monkey is anti-PAP). WP has to give a satisfactory explanation to the swing voters: the 24 –35% of the voters whose minds can be changed.

All to play for, WP. How can a co-driver have moral authority if it lacks integrity?

And if the WP fails to give a decent explanation? Then 2011 GE will be another false dawn: like 1991 GE.

Btw, I’m sure one Goh Meng Seng will soon have something to say. And Eric Tan (remember him?) will be smiling. And rightly so. Though I do wish he’d stop allowing himself to be tagged with anti-WP stuff coming from an ally of the PAP. It makes him look petty, something he is not.

*The Auditor-General highlighted five “major lapses” in governance and compliance:

  • Failure to transfer monies into the sinking fund bank accounts as required by the Town Councils Financial Rules;
  • Inadequate oversight of related party transactions involving ownership interests of key officers, hence risking the integrity of such payments;
  • Not having a system to monitor arrears of conservancy and service charges accurately and hence there is no assurance that arrears are properly managed;
  • Poor internal controls, hence risking the loss of valuables, unnecessary expenditure as well as wrong payments for goods and services; and
  • No proper system to ensure that documents were safeguarded and proper accounts and records were kept as required by the Town Councils Act.

“Until the weaknesses are addressed, there can be no assurance that AHPETC’s accounts are accurate and reliable, or that public funds are properly spent, accounted for and managed.”

StanChart: Gay Portuguese in running to be CEO

In Banks, Corporate governance, Temasek on 03/02/2015 at 1:34 pm

The CEOs of Llyods and HSBC UK are reported to be hot favourites according to Bloomberg http://www.bloomberg.com/news/articles/2015-01-28/lloyds-hsbc-executives-seen-as-favored-for-stanchart-ceo-role. Both are Portuguese. And the latter is gayhttp://www.theguardian.com/business/2015/jan/18/hsbcs-antonio-simoes-says-being-gay-was-key-to-career-success .

Wespac’s CEO is also in the frame.

Another report says that our very own Gupta (FT turned new citizen) is also a possible candidate.

Given that StanChart is big in M’sia, Hk, India and Indonesia, and wants to be big in China, I somehow don’t think appointing a gay is on the cards

FT’s Lombard thinks that “ex-StanChart guy Alex Thursby” will get the nod.

Alex Thursby, who went on to run ANZ’s Asian businesses and is now the CEO of National Bank of Abu Dhabi. In his current role, he is trying to drive a bank that will become multinational by following trade within the emerging world – what he calls the West-East corridor. But when asked if this looks a lot like a StanChart model, he says: “I think this has similarities with the Standard Chartered of old. The Stanchart model has changed over the years since I was there, and whether it’s changed for better or worse is for others to make a judgment on.”

Thursby’s words are carefully chosen but he’s clearly referring to StanChart’s ventures into financial markets businesses that it used to leave to the pure-play investment banks. And it is notable that the financial markets business is the one that is causing the problems in the bank today; the warning today says that division is the “main challenge” facing the bank and that everything else is in line with expectations. The head of that business, Lenny Feder, is to take a 12 month sabbatical for personal reasons, the bank says, and will not return to that role afterwards.

The financial markets business in StanChart parlance includes some things that others might consider mainstream, like foreign exchange, but it also houses equities and commodities, among other things. Peter Sands, speaking about the reduced performance, said today that the business was being hit by falling volumes in rates, squeezed margins, regulatory changes, and the fact that less business is done in a low-rate environment.

None of which would have had much impact on the Standard Chartered model of old. Which raises a further question: perhaps this most storied and reliable of institutions should get back to doing what it’s good at. It might be boring. But it works.

http://www.forbes.com/sites/chriswright/2014/06/26/is-the-standard-chartered-model-broken/

It jus shuttered its cash equity biz, if you must know.

Change a’coming at StanChart

In Corporate governance, Hong Kong, Temasek, Uncategorized on 26/01/2015 at 3:07 pm

The Sunday Telegraph reported that Temasek and Aberdeen (between them they hold 30% of StanChart) had told chairman Sir John Peace that he must find a replacement for Mr Sands within months or stand down himself.

FT reports the bank is looking to replace Peter Sands this year and has hired a headhunter to look for a successor ASAP. It says that Temasek and Aberdeen hold him responsible for not responding fast enough to a reversal of StanChart’s fortunes.

Why we have so few world class GLCs

In Corporate governance, S'pore Inc, Temasek on 03/01/2015 at 5:39 am

We only have three, Keppel, SembCorp and SIA.

Here’s a possible reason from the letters page of the PAP’s bible, the Economist:

State-owned failings

* SIR – No long analysis is needed to understand why state-owned firms underperform (“State capitalism in the dock”, November 22nd). Two main mechanisms exist for accountability in modern society: market pressure and political control. State-owned firms fall between the two. They lack the degree of competition that private firms typically face but also do not have the direct political control that applies in conventional government.

Lack of accountability means lack of performance. Effectiveness is best secured by either keeping ventures with classic government agencies, instead of with state-owned firms, or by placing ventures in fully privatised companies with full market exposure, whichever best suits the activities in question. A bit of each is not enough, but instead creates a grey zone with grey results, which is what we see for state-owned firms.

Bent Flyvbjerg
Said Business School
University of Oxford

 

The Japanese story PM didn’t tell us

In Corporate governance, Political governance on 02/01/2015 at 5:17 am

For some reason, AhLoong is such an easy person for me to get annoyed with.

Juz as I was thinking that I was going too far in making fun* of a basically decent chap trying to live up to dad’s expectations while trying to make life more comfortable for us (OK so that he can continue drawing his salary), he has to put up a story about Japan inter-generational strife (http://blogging4myself.blogspot.sg/2014/12/pm-shares-article-from-japan-times.html) to shore up one or several of dad’s Hard Truths.

Well given the performance of his tpt ministers (2.8% rise in public tpt fares instead of 3.4%** despite oil prices falling 49%, and pipes bursting and other problems at Changi Airport), VivianB (rats), and Yaacob (cont’d cluelessness), he doesn’t  follow the Japanese practice of solving managerial problems.

Let me explain.

The president of Japanese airbag manufacturer Takata is to step down, amid widespread criticism of how the company handled recent safety crises.

Stefan Stocker presided over the firm during a period in which Takata airbags were linked to the deaths of five people.

Additionally, concerns that some of Takata’s designs may be defective have led to widespread recalls: more than 24 million vehicles globally since 2008.

Under certain conditions, Takata airbags can be set off with too much explosive force and potentially fire out metallic shrapnel.

The company has been heavily criticised by regulators in the United States for its slow response to the problems, which first came to light six years ago.

Stefan Stocker’s role will be taken over by the current chairman, Shigehisa Takada.the 48-year-old grandson of Takata’s founder. Shigehisa Takada.will take a 50% t pay cut for four months in response to the safety crisis.

Related article: https://atans1.wordpress.com/2011/03/14/learn-from-japanese-set-example-leh-elites/

——-

Since when has AhLoong taken a pay cut in response to ministerial failure?

*https://atans1.wordpress.com/2014/12/29/ahloong-should-ask-this-tourist-for-advice/

https://atans1.wordpress.com/2014/12/23/ahloong-needs-his-very-own-superheloo-costume/

**The last review done by PTC in Jan this year resulted in a fare increase of 6.6%, to be adjusted in two steps. A 3.2 per cent hike was implemented in Apr, and the remaining 3.4 per cent carried forward to the current review.

The fare formula is based on four components:

Core CPI inflation: This currently stands at 1.7 per cent, and excludes home and car prices.
Average wage increase, at 4.3 per cent
Energy index: This registered -12.6 per cent, due to a drop in energy costs in 2013
Productivity index at 0.5 per cent, where operators share productivity gains with commuters

Based on this formula, this year’s fare adjustment quantum is -0.6%. But because of the “roll-over” of 3.4% from Jan’s review, it resulted in 2.8%.

Mr Lui said, “Here we are using 2013, for this fare formula. We know that energy costs have come down, as compared to 2012, which is why for the most recent year, the index was actually -0.6.”

“You may recall that it was 6.6 per cent, of which the most recent fare increase gave an upward revision of 3.2 per cent. So there was a 3.4 per cent that was carried over, and now taken together with the -0.6 per cent, which was derived using all the numbers in 2013, the maximum that is allowed for this particular fare increase will be 2.8 per cent.”

Assumption behind “reasonable” pay for ministers badly flawed/ What’s reasonable pay for this civic service?

In Corporate governance, Political governance on 30/12/2014 at 4:17 am

One study says top corporate salaries are a scam game, another that “executive managers’ pay is still determined by simplistic measures of performance that bear little relation to long-term drivers of companies’ value, according to an analysis of pay at FTSE 100 companies over the past decade”.

If so so how can our ministers’ salaries that are pegged to private sector pay be “reasonable”? Private sector salaries are “rigged”, not the result of rationality or even supply and demand..

How the salaries of top corporate executives are calculated is a scam according to the Economist, citing an academic study. (The Economist advocates things like GST, low income and corporate taxes, minimal welfare and charging owners who use their cars. All very PAP. I’ve called it the PAP’s bible.)

So the u/m is relevant in the light of PM’s comments about “reasonable”* salaries for ministers. (What do you think?)

You will be shocked, shocked to learn that your worst suspicions are confirmed. Yes, firms that hire pay consultants pay their executives 7.5% more than those who don’t. Yes, companies that hung on to their multi-service consultants paid their executives 10% less than those that switched to specialist consultants. Executives who work at firms where the board hired the consultants earned 13% less than when the consultants were hired by the management themselves. When executives get a big pay rise, their companies are less likely to replace their consultants in the following year.

The authors conclude that

our study finds strong empirical evidence for the hiring of compensation consultants as a justification device for higher executive pay.

So, be very suspicious of arguments that higher executive pay is the result of the “war for talent”, the unique importance of the CEO in a globalised world, or whatever. If such arguments were true, it should make no difference whether consultants are hired or not. This smacks more of the famous lickspittle courtier of Louis XIV, the Sun King, who, when asked the time, replied “It is whatever time your majesty pleases”. “Whatever pay your majesty pleases” is the modern equivalent.

Emphasis mine.

The FT reports: Research from CFA UK and Lancaster Business School, which examined executive remuneration over the 10 years from 2003-2013 at 30 FTSE 100 companies, found there was scant correlation between the key performance indicators that companies highlighted to shareholders and the measures used to incentivise and reward senior staff.

Btw, Waz reasonable pay for this free civic  service

The point of independent directors, commissioners, NMPs etc

In Corporate governance, Political governance on 12/12/2014 at 11:19 am

Here’s an extract from the Observer that puts the point of independent directors, members of commissions and NMPs into some perspective:

Shortly after commodity trading firm Glencore floated on the London Stock Exchange, its chief executive (and largest shareholder) Ivan Glasenberg addressed an industry dinner in London. During his speech he told a story about his company’s search for the independent directors needed to represent external shareholders once the company had gone public, which involved an adviser presenting him with a list of potential names for chairman.

“I read them and I said to him, ‘I don’t know any of these people’,” Glasenberg recalled. “To which the adviser replied, ‘That’s kind of the point’.”

With PM’s demanding a blank cheque in the coming GE, he’s obviously belongs to the Glasenberg school of tot. But Glasenberg led a team that made money for investors in Glencore, before and after it floated. Can PM say of the same of S’poreans who for voted the PAP? Excluding his ministerial team of course.

StanChart directors to push for chief’s succession plan

In Banks, China, Corporate governance, Emerging markets, Hong Kong, Temasek on 01/11/2014 at 11:06 am

Above is FT’s headline for today.

Ho, Aberdeen, Blackrock and L&G baring their fangs? TRE ranters and other anti-PAP paper activists, pls note that Temasek has been pushing for a succession plan for some time.

Standard Chartered data

But they can rejoice ’cause  sharesclosed at £9.39 on Friday – down from £18 less than two years ago.

They will be celebrating.

Related:

https://atans1.wordpress.com/2014/10/29/lousy-set-of-results-from-stanchart/

https://atans1.wordpress.com/2014/10/31/stanchart-gives-ho-more-problems/

 

StanChart gives Ho more problems

In Banks, China, Corporate governance, Hong Kong, Temasek on 31/10/2014 at 10:12 am

Is StanChart a rogue bank?

Standard Chartered Plc (STAN) fell for a fourth consecutive day in London after U.S. prosecutors reopened investigations to determine whether the bank, which entered into a deferred prosecution agreement in 2012, withheld evidence of Iran sanctions violations.

The U.S. Justice Department, Manhattan District Attorney Cyrus Vance Jr. and Benjamin Lawsky, superintendent of New York’s Department of Financial Services, are all reopening their original inquiries into the London-based lender to determine whether it intentionally withheld information from regulators before the 2012 settlements, according to two people briefed on the matter, who asked not to be identified because the probes are confidential.

http://www.bloomberg.com/news/2014-10-30/standard-chartered-bank-of-tokyo-said-getting-new-review.html

Temasek wants clear succession plan at StanChart

https://atans1.wordpress.com/2014/10/29/lousy-set-of-results-from-stanchart/

Lousy set of results from StanChart

In Banks, China, Corporate governance, Emerging markets, Hong Kong, Temasek on 29/10/2014 at 2:23 pm

Standard Chartered has announced a 16% fall in operating profit because of a restructuring of its South Korean business and an increase in bad loans.

The Asia-focused lender said pre-tax profits fell to $1.5bn (£930m) in the July-to-September quarter compared to the same period a year ago.

Standard Chartered also warned full-year earnings would fall because of weak trading activity.

http://www.bbc.com/news/business-29797961

FT reports that some of the major shareholders have been pressing for the CEO to be sacked if things don’t improve soon. It also reports that Temasek  is “pressing for a clear plan of succession”.

Standard Chartered data

 

 

The truth about consultants/ Can PwC be trusted?

In Corporate governance on 26/08/2014 at 4:18 am

“When bank executives pressure a consultant to whitewash a supposedly ‘objective’ report to regulators – and the consultant goes along with it – that can strike at the very heart of our system of prudential oversight.”
Benjamin M. Lawsky, New York State’s financial regulator, on a settlement deal with PricewaterhouseCoopers.

PwC was asked in June by Bank of Tokyo-Mitsubishi UFJ, part of Mitsubishi UFJ Financial Group Inc 2007 to review the bank’s dollar- clearing activity from April 1, 2006, to see whether any should have been blocked or reported under rules by the Treasury Department’s Office of Financial Asset Control.

PwC edited the report at the bank’s request “in ways that omitted or downplayed issues of material regulatory concern,” including cutting out English translations for instructions to strip references to “doing business with ‘enemy countries’ of the US,” according to the settlement. The Historical Transaction Review report was finished in June 2008 and filed to US regulators and became the “cornerstone” for the 2013 deal with Bank of Tokyo-Mitsubishi, according to the accord with PwC. The two partners responsible for supervising the review have retired from PwC.

Con persons not professionals.

What Big Ass teach our govt and SME employers

In Corporate governance, Economy on 20/08/2014 at 4:25 am

The recent dip in labour productivity has the govt denying that restructuring is a failure. This and PM’s NDR speech reminded me that on 7 May, BT reported:  The government will help small and medium enterprises maximise their local and foreign workers’ contributions, amid the ongoing manpower crunch*.

They also reminded me about an article I had read about a US SME.

Big Ass is a US manufacturer of industrial and commercial fans. It makes its fans in the US (a high wage country), pays workers’ well (almost 30% above the national average wage, and nearly 50% above the Kentucky average) and is profitable and thriving. Surely it can teach the govt and our local manufacturers something about productivity in a high-wage environment?

The firm pays almost 30% above the national average wage, and nearly 50% above the Kentucky average. It also returns 30% of profits to its 500 employees in the form of bonuses or share programs. As a result, it can hire the best people, and keep them: in 2013 its retention rate was 88%, compared with a national average of 62%. It also gets a lot out of its workers: productivity is up by 175% since 2009 on one industry measure. Any profits that aren’t returned to workers are ploughed back into the firm. “If we have any money over at the end of the year, we’ve missed an opportunity to invest,” observes Mr Smith.

No rocket science or magic formula. It’s about paying gd wages and reinvesting in the biz, not being mean on wages, so that the SME owner can buy more properties or new super cars.

And its about growing “our own timber” (Ngiam Tong Dow, remember him?, not importing FTs:

Mr Smith’s biggest challenge today, he believes, is ensuring that Big Ass becomes what he calls “a 200-year company”. Part of that is down to people: he believes in hiring out of college, and moving those new hires through a range of different jobs. “We want young people to understand the whole company, because they’re going to be running it 40 years from now,” he says. Another part is hardwiring long-term thinking into the firm’s processes.

It’s also about spending on R&D

Big Ass invests nearly 9% of its revenues in R&D, more than twice the manufacturing-industry average in America. A lot is spent on hit-or-miss blue-sky research.

And it’s always about the long term future (think LKY in the 60s, 70s and 80s):

Privately held firms are not subject to the short-term whims of shareholders, but they face their own hurdles. Mr Smith’s son, Tristan, works for the company, but will his heirs want to cash out, offshore production or change the culture? To ensure that the firm’s values endure, Mr Smith is exploring ways to separate management and ownership, and embed the way the company does business into its formal structure. He has spent a lot of time looking at long-lived firms in Germany, Japan and elsewhere for inspiration. “For me, this is the most complicated and difficult problem to solve.”

http://www.economist.com/blogs/schumpeter/2014/04/making-it-america

If Big Ass was a local SME, it would have brought in FTs by the container-load so that the owners could buy that Ferrari and luxury pent-house.

—-

*This was Prime Minister Lee Hsien Loong’s assurance to firms at the Malay-Muslim Business Conference held on Wednesday.

He said the government cannot ease up on the limits it has imposed on foreign worker inflows to Singapore.

However, Mr Lee added that the number of foreign workers in the country is still growing, though not as fast as before. [Interpretation: FTs will grow by the 747 and A380 cattle class, not by the container-load.]

He noted that small businesses are very worried about manpower and that many of them want more foreign workers. Those unable to find workers have had to turn away business.

Mr Lee’s advice to firms was to offer higher wages and exciting jobs as the best way to attract good people.

He noted that this is only possible if companies raise productivity and climb up the value chain.

Mr Lee said firms can tap the various government schemes available to do that.

He also encouraged companies to venture overseas, with the government’s help.

 

Tot S’poreans are honest, honour honesty? Think again

In Corporate governance, Financial competency on 18/06/2014 at 4:29 am

I was shocked as a user of financial statements to read this in BT last week:

More than one-fourth of senior executives in Singapore feel it is justifiable to misstate financial performance in order to survive an economic downturn. The staggering statistic was one of many in EY’s 13th and latest Global Fraud Survey.

The exercise, which involved 2,719 interviews with senior decision-makers in the largest companies in 59 countries – conducted between November 2013 and February 2014 – looked at the perceived levels of fraud, bribery and corruption across the world in current times.

It found that financial statement fraud risk is still prevalent. Aside from Singapore’s response, EY’s survey found that – across the globe – 6 per cent of respondents said that misstating financial performance is justifiable in order to survive an economic downturn. This is an increase from 5 per cent two years ago.

EY noted that this is driven by responses from emerging markets where, in some jurisdictions, a significantly higher proportion of respondents stated that they could justify such actions. Compared with Singapore (28 per cent), 24 per cent in India and 10 per cent in South Africa felt misstating financial performance was justifiable.

(BT 12 June: Emphasis is mine)

We are miles away from the global benchmark (6%) and worse than India (where few yrs ago there was a major accounting scandal at a giant Indian IT co), a country where corruption is so common.

How to trust any co’s financial statements? Blame education system, PAP govt or S’pore society?

Wrong to blame our society?

Juz think about it. Roy Ngerng who claimed his research into the CPF system showed that the govt had stolen the monies, and who when sued by the PM for defamation, readily and cheerfully admits that the govt didn’t steal the monies but like a true blue S’poreans wants to avoid coughing up money (BS is cheap, money is another thing) is a heloo among the chattering classes.(think Maruah) and the born losers.

This is what his lawyer released yesterday: “The defendant …  had publicly apologised to the Plaintiff and acknowledged that the allegation about which the Plaintiff complained was false (in wording, and in a manner, required by the Plaintiff), who had given undertakings not to publish such an allegation, and who had agreed to remove material to which the Plaintiff had objected. 

My take has been that the the only original thing about his CPF articles is the accusation that the govt steals our CPF monies. https://atans1.wordpress.com/2014/06/11/roy-missed-his-calling-in-life/

As long ago as 2007, the intricacies of CPF were spelled out by an NMP in parly http://siewkumhong.blogspot.sg/2007/09/speech-on-ministerial-statement-on-cpf.html. Check out the references in speech. And Uncle Leong, Roy’s sifu has been active too.

So what has Roy added to the debate? Juz the accusation (now retracted) that govt stole the monies: an accusation he now readily admits is BS.

And he is a heloo to Maruah etc?

And nothing is wrong with the moral and ethical value of at least some highly paid, professional S’poreans?

Something is very wrong with us when a significant number of S’porean professionals are prepared to lie for their employers, paymasters, or when a self-declared liar is a hero to many S’poreans (number unknown).

BTW, I make no comment on whether PM is right morally, ethically, PRwise to sue because the issues are not as clear cut as the PAPpies, anti-PAP activists and ordinary, decent-minded S’poreans who dislike bullying think. It’s a complex problem that even game theory cannot help find an answer. I don’t know whether PM was right or wrong to sue.

Coming back to the issue of the willingness to lying, the PAP govt must take a lot of the blame for this. It has been in power, micro-managing and social engineering S’poreans since 1959, and has put collective responsibility and duty (calls it constructive nation-building) above all else, especially the conscience of the individual. Surely, some could have taken this to mean that it’s OK to lie for employer, paymaster?

HPL: More than “fair and reasonable”?

In Corporate governance, Financial competency, Property on 09/06/2014 at 4:38 am

The second revised buyout offer for Hotel Properties Limited (HPL) is considered to be “fair and reasonable” by the independent financial adviser to HPL. 68 Holdings, a consortium led by tycoon Ong Beng Seng and Wheelock Properties, had raised its bid a second time to $4.05 per share last month.

CIMB’s opinion on the offer is unchanged from its earlier report issued after the consortium first raised its offer price from $3.50 a share to $4. The updated report by CIMB was released in a supplementary letter to shareholders by HPL’s board of directors yesterday.

On the second revised offer of $4.05 a share, CIMB’s recommendations to HPL shareholders are also unchanged. (BT last Fri)

Given that the first offer was already “fair and reasonable”, shouldn’t this be an offer that is “more than fair and reasonable”?

Or the first one should have been “neither fair nor reasonable”? It was a low ball bid?

In 2002, the independent adviser to the board of Optus had come out with the opinion that far from paying too much, the offer is actually “unfair”.Independent adviser, Grant Samuel said the SingTel offer was “unfair”, but recommended the offer and says “while it is not fair, it is reasonable”. As a result, the directors of Optus recommended the deal to shareholders.

The M&A boutique said the deal was unfair based on valuation techniques, but said it was  reasonable because if there wasn’t an offer, Optus’ share price would be trading at lower levels: “In assessing the fairness of the offer, Grant Samuel indicates that its judgement of fairness is at the margin, and that while the Singtel offer is not fair, it’s only just not fair.”

Well, many S’poreans tot, at the time, that that the price paid was unfair and unreasonable to SingTel investors (self included0). Turns out we are right even today, it seem. If it wants to float Optus today, there would be a small gap of a bn or so A$ between its purchase p-rice and valuation of Optus today: small change leh.

Coming back to the HPL offer, CNA reported last week in relation to another takeover offer, “Minority shareholders are becoming increasingly disillusioned with boilerplate advice from independent financial advisers (IFAs) and are questioning their usefulness, the head of the Securities Investors Association of Singapore (SIAS) said on Friday (June 6).”*

To which the retort from bidders and IFAs would be, “They would say that wouldn’t they? They want unfair and unreasonable prices to be paid for their shares.”

*Cont’d

The remarks by SIAS President & CEO David Gerald came in a statement noting the dissatisfaction on the part of minority shareholders over a buyout offer for LCD Global, a hospitality and investment company, at S$0.17 a share.

“SIAS notes that while the IFA report has indicated that the offer is fair, based on a historical perspective, the offer does represent a discount to NAV at S$0.27,” …

 

Accounts: PA fixed, WP got fixed?

In Corporate governance, Political governance on 24/02/2014 at 5:24 am

The usual suspects and other anti-PAP netizens are outraged that Khaw’s ministry has highlighted various concerns regarding the auditor’s report on the financial statements of Aljunied-Hougang Town Council (AHTC) for Financial Year 2012, and Tharman has gotten the Auditor-General to investigate the matter, while no-one in govt is investigating why the PA’s “auditors have been giving an “adverse opinion” on the financial reports from the People’s Association (PA) for several years now.” http://www.tremeritus.com/2014/02/20/breaking-auditors-give-adverse-ratings-to-pas-financial-reports/

I won’t go into the rights and wrongs of the AHTC’s accounts because we will soon know the truth*, except tthat I found it puzzling that Auntie said bar one concern, they were related to handing-over issues. Some were, the others were not, even a cursory glance would have shown her, as it did me (both of us are trained lawyers). Anyway let’s wait for the report, though having witnessed at first hand how the AudG audits govt bodies, WP is in for a nasty report. It is hated and feared by the rest of the govt machinery. It works like the ISD: takes no prisoners. AudG is also very petty.

As to the PA’s accounts, I won’t go into details because the issue is one of consolidating accounts** and the PA had given up its row with its auditor and will be consolidating the accounts that the auditor wanted consolidated effective last yr’s accounts, due soon. It had resisted complying since the auditor raised the issue (“Auditor KPMG noted the omission of the financial statements of the community centres and community clubs”).in the accounts for FY 2001.

The usual suspects should be asking if the fixing of the PA’s accounts (WP Low had raised the issue in 2008 and was told to  Foff http://www.theonlinecitizen.com/2014/02/low-thia-khiangs-question-in-2008-on-pas-adverse-accounts-rating/: there was nothing wrong with the accounts**) and the row over the AHTC’s accounts are linked? Could it be that the decision to fix the way the PA’s accounts are prepared, was done in the expectation that the dysfunctional duo (Auntie and PritamS: remember they are lawyers, not accountants) would have failed to fix the AHTC’s accounts for the second yr in a row. And there could be an opportunity to show the entire WP as dysfunctional? Remember that a chain is as strong as its weakest link, and Pritam has shown us repeatedly that he keeps saying or doing the wrong things***. Or is this line of reasoning (fixing to fix) too cynical or too conspiratorial? Even believing that JBJ and friends really won at Cheng San, or that Ong Teng cheong lost the presidential elections is more believable?

Seriously, in thinking about the row on the audit reports, I hope readers remember the wise words of Low.  TOC reported that Low is also extremely “confident” that none of the Town Council’s funds were lost, and that there was no involvement of any form of illegal payment or transaction.”

WP Low got the issue absolutely right. It’s all about whether any funds were lost, and whether  there was “any form of illegal payment or transaction”, not whether he PA’s or AHTC’s accounts get clean audit reports, ’cause they do the “right” things. Audit reports are very impt, but they are maps not the reality.  The auditor gave Enron a clean audit report. Both are history. 

They should also take into account the following comments:

—  I think overall audit standards are tightening. What passed as ok earlier is not acceptable anymore (unless we have a serious case of casting with closed eyes). Seeing how liable for professional negligence auditors can be, no one is going to ruin their rice bowl any time soon unless they’re really old and ready to be disbarred. (Facebook poster)

As somebody who has been audited many times and qualified as an accountant, I am also breathless with admiration how so many capable and intelligent people can deliver so little value to society. Most big four accountants are capable individuals but put them together and they seem incapable of delivering anything of value to companies.  (A FT reader on a FT article on accountants)

I’ll leave with a wicked tot. Low has said he is “not an accountant”. Remember he said he was “not a private investigator (remember  https://atans1.wordpress.com/2012/05/21/lol-expelling-yaw-took-courage/?). So will he, one day, tell tell us he is not a manager when Auntie’s and Pritam’s dysfunctionality finally causes the WP serious damage, and they have to move on from the WP like Yaw?

*Though I sure if the AudG sides with the MND, the usual suspects and groupies will be accusing AuditorG of being biased. When that happens, I hope they will then stop using AudG’s reports against the govt. Can’t suka suka use favourable reports, not unfavourables. After all, they claim not to be like the PAP govt: who is happy to use TI’s figures when it praises S’pore and slimes it when its figures slime S’pore http://www.tremeritus.com/2014/02/19/dr-ng-condemns-tis-defence-spending-rating-for-sg/. If the government finds TI not to be credible {on defence procurement issues] as Dr Ng has alleged in Parliament, perhaps the government should stop using TI’s rankings and surveys altogether.

For a start perhaps, CPIB could stop using TI’s rankings on its website. Presently, it prominently displays TI’s CPI on its home page [Link]:

**As regards PA’s non-consolidation of grassroots organisations’ accounts, the auditor, PriceWaterhouseCoopers, has qualified the financial statements of People’s Association on the basis that the accounts of the grassroots organisations were not consolidated. PA’s view is that the accounts of grassroots organisations should not be consolidated for the following reasons.

Firstly, the funds in these accounts belong to the grassroots organisations. Secondly, the Government grants and the cost of staff support are already accounted for in PA’s financial statements. Thirdly, the grassroots organisations are operationally self-funding through revenues from activities, courses and donations. Fourthly, the grassroots organisations decide on how their money should be spent for the benefit of the residents. And, finally, proper procurement procedures, financial control and good corporate governance practices apply to the grassroots organisations.

***Think

— his “coalition with the PAP” comment;

— planning footie on PAP MPs’ team:

— silly slip that only a lawyer buruk would make https://atans1.wordpress.com/2012/03/16/c-wps-performance-during-the-budget-debate/

— Hawkergate: https://atans1.wordpress.com/2013/07/25/low-shows-the-usefulness-of-non-action/

DBS doing NS on HDB loans?

In Corporate governance on 13/11/2013 at 4:26 am

If it’s one thing S’poreans who are paying off the mortgages on their HDB flats can agree on, it is that the govt is stretching the truth when it says that HDB mortgage payments are affordable because mortgagors can use CPF money leh. They are not that daft not to realise that it affects their old-age funds. And anyway, it’s always nice to pay less.

So it’s interesting that DBS has a very gd scheme for HDB borrowers. So gd that only the daft wouldn’t apply for it. I’ll let BT explain:

Thousands of HDB homeowners are turning to DBS Bank for a mortgage product that guarantees savings.

Those who took up a POSB HDB loan when it was launched in April could be looking at savings of as much as $1,600 by next month, calculations from DBS showed.

The first POSB HDB loan pilot launch – where homebuyers enjoyed a floating-rate loan with interest capped below the HDB concessionary rate for 10 years – was fully sold.

The bank is now into its second offering, which charges the same rate but for eight years, said Ms Lui.

The current POSB HDB loan charges for the first eight years the three-month Sibor (Singapore interbank offered rate) plus 1.38 per cent, capped at the CPF Ordinary Account rate. The current CPF Ordinary Account rate is 2.50 per cent.

Thereafter, the loan charges three-month Sibor plus 1.48 per cent. The September three-month Sibor is 0.374 per cent.

The HDB concessionary loan now charges 2.60 per cent, which consists of 0.10 per cent plus the CPF Ordinary Account rate of 2.50 per cent. Based on the three-month Sibor of 0.38 per cent, borrowers who switch from the HDB concessionary loan will pay a lower interest rate of 1.75 per cent.

For a homebuyer refinancing from the HDB in April, based on a loan of $400,000 and 25-year tenor, the potential savings over six months amount to $1,684.

And should interest rates rise over the next eight years, DBS guarantees that it will be capped at the CPF Ordinary Account rate of 2.50 per cent or 0.10 per cent below the HDB concessionary rate.

http://www.cpf.gov.sg/imsavvy/infohub_article.asp?readid=563079109-19246-5011258124

Nice to see DBS returning to its roots as “Development Bank of S’pore”., and using the POSB brand which some Foreign Trash CEO tried to get rid off. Fortunately, he went before the POSB brand went. Gd work ,New Citizen Gupta.

But if DBS is doing gd, is this mortgage making money, on a risk-adjusted basis, for DBS? How come OCBC and UOB don’t have similar schemes? Maybe DBS is helping out in constructive nation-building? Err what about shareholder value for non-controlling shareholders and gd corporate governance?

Never mind, I don’t own DBS shares.

Retail punters suffer ’cause SGX, MAS dysfunctional?

In Corporate governance, Malaysia on 29/10/2013 at 4:53 am

I waz surprised at the swiftness that SGX allowed Asiasons Capital, Blumont Group and LionGold Corp to resume normal trading, as I had expected a prolonged period under “designated trading”, allowing me time to think about and investigate Asiasons. (My initial tots on Asiasons).

My immediate reaction waz, “Shld have had the balls to buy at 12ish cents*” with cash upfront. My next reaction was “How come SGX come to conclusion everything halal so fast?”. My third tot was, “Wonder if SGX and punters are going to repent?”.

A few days after stocks cheonged following the lifting of trading restrictions, SGX and MAS announced investigations. On 26 October 2013, BT reported JUST as shares of Asiasons Capital, Blumont Group and LionGold Corp shares appeared to be clambering out of their doldrums, news of the Monetary Authority of Singapore’s (MAS) investigation into their trading activities dragged them down again.

“MAS and the Singapore Exchange (SGX) are conducting an extensive review of the activities around these stocks,” MAS said in a statement yesterday. “This episode has also surfaced broader issues regarding the market structure and practices which MAS and SGX intend to review thoroughly.”

All three stocks slid to their lowest level in a week as skittish investors took profit. Asiasons shares fell 18 per cent to 19 cents, Blumont stock dropped 19 per cent to 16 cents and LionGold shed 15 per cent to 25 cents by the close of trading yesterday. The three counters were among the five biggest percentage decliners on the SGX.

Why couldn’t the plans to investigate and the lifting of trading restrictions be announced at the same time? If necessary, the latter could have been delayed a few days, while SGX and MAS deliberated? No wonder MAS MD got only a B rating compared to his M’sian and Pinoy counterparts (A) http://www.tremeritus.com/2013/10/27/head-of-mas-ravi-menon-only-gets-a-b-grade/. Shamefully that S’porean is graded lower than Pinoy or M’sian.

And do remember that FTs hold the top two posts at SGX.

Anyway, I’m not complaining. Gives me time to think about and investigate Asiasons. But lifting the trading restrictions (implying everything halal) and, a few days later, saying that there were going to be investigations,  ain’t fair to punters.

SGX has publicly said it wants retail investors in the market. Great way to treat them. But then there were S-Chips. I remember the boast by one Larence Wong of SGX (now departed), in the early noughties, that only chinese companies with accounts certified by int’l auditors were to be listed. They were, but looked what happened? The perils of ang moh tua kee.

Related post: http://finance.yahoo.com/news/singapores-penny-stock-mystery-increases-210030112.html

*Closed at 0.147 yesterday.

Freight Links loaned $45m to CHC months after issuing bonds

In Corporate governance, Humour on 29/09/2013 at 10:28 am

A sharp-eyed TRE reader wrote to TRE as follows

Straits Times article dated 27 Sep reported on a $45 million new loan taken out by City Harvest Church (CHC).  The loan was not taken from any financial institution but a logistics company listed on the Singapore Exchange called Freight Links Express Holdings (FLEH).

FLEH’s core business is in freight forwarding.  To offer a loan of this size suggests its core business may have changed.  Have shareholders been notified?  At 8 per cent per annum, the interest charged by FLEH is also quite high.  But I guess CHC is desperate and will grab anything that comes along because no financial institution will offer a religious organisation a $45 million loan to purchase properties based on expected future ‘earnings’ from worshippers.
What is interesting is that FLEH had managed to raise $100 million in a Fixed Rate Note issue bearing an interest rate of 4. 6 per cent  just 4 months ago. http://www.freightlinks.net/MediaRelease/Press54.pdf  These IOUs are normally used for general corporate purposes and financing investments related to its core business, certainly not for loans. 
Business wise, it certainly does make sense to be earning 8 per cent while paying only 4.6 per cent without taking any risk.
However, this will set a precedent for every other listed companies on the exchange to stray from their core business.  Should this be allowed by the Singapore Exchange?
 
Phillip Ang
Surprising that our journalists from our “constructive”, nation-building media did not raise this corporate governance issue. Waiting for govt media briefing or telephone call to tell them what to say?
While I’m sure the transaction is perfectly legal, there is the governance issue of whether a logistics provider should become a lender to a church, albeit for a sum which is “peanuts” in the context of its financials. And there is the issue of the bond issue: normally used for general corporate purposes and financing investments related to its core business, certainly not for loans.
Restores my faith in the quality of people who read and post on TRE. Glad to see that not all readers and posters are “PAP are bastards” ranters. Maybe, they moved on to TOC or TRS?

Why preacher boy’s congregation will follow him to hell & back

In Corporate governance, Internet on 13/09/2013 at 6:01 am

(Or “Don’t be jealous that Kong Hee’s got it all leh”)

Woody Allen* once said that believing in God would be easier if He would show Himself by making a large deposit in a Swiss bank account in the director’s name.

No wonder Kong Hee (RI boy, like that thieving monk, and that ex-bishop (Methodist) of S’pore) is able to convince many people that prosperity gospel works: he is living proof of the $ that it brings. He is married Sun Ho**, who he said has rich, filthy rich, parents***. And he has Wahju Hanafi, as God’s personal ATM on earth:

— An Indonesian businessman and member of the City Harvest Church (CHC) … cast the business of saving souls in terms of a return on investment.

Justifying his $1 million-a-year donation to CHC for its Crossover Project – the church’s way of evangelising through pop music – Wahju Hanafi said: “If I spend $1 million and we win 138,000 souls, that means every soul is worth less than $1,000. To me, that is a good buy.

“I’m a businessman, and for every investment that I (make), I have to see a return. To me, in this case, the return is the souls that we are winning. If (we) are not winning souls, then I will probably pull back my money.” (BT report)

THERE was talk of love gifts like a Sentosa condo, expensive weddings and sponsorships so pop singer Ho Yeow Sun could receive bonuses.

God’s been putting serious money into his bank account. “If him, why not us?”, believers tell themselves. They got a point.
Now to the serious stuff.

First, the way the evidence is heading seems to indicate, to me, remember I’m a trained lawyer, that it was one big balls-up by the CHC people. They were trying to avoid paying tax or trying to help donors avoid tax. Whether they crossed the line, and were guilty of the offences charged remains to be seen. Anyway they didn’t have the benefit of this advice: Avoiding tax is not a fiduciary duty for UK company directors, opines a top UK law firm recently. http://taxjustice.blogspot.sg/2013/09/a-legal-opinion-on-directors-duties-on.html

The general principles of the opinion apply here too. CHC is registered as a company.

Next, much has been said by the magnificient seven bloggers and other lesser mortals about the intolerance of the PAP govt of views that do not fit the “right” narrative.Sadly, netizens too can be be a pretty intolerant bunch, reminding me of the biblical passage: “He that is without sin among you, let him first cast a stone …”.

Here http://vivitelaeti.blogspot.sg/2013/08/kong-hees-spokesman-on-english-language.html the blogger makes fun of a CHC member’s and PR flack’s “bad” grammar because of her undoubted bad manners.

But grammar and bad manners aside, she has a very serious, valid point, on the use of the word “sorry”.As someone who is a lapsed Methodist (into meditation nowadays), and who disagrees with the prosperity gospel believers that worshiping God results in a bigger bank balance, I never viewed the clip in qn in the way netizens spreading it, or commenting on it, were trying to frame it.

I read it as him telling fellow believers that their God was “comforting” him for trials inflicted by their loving God. Waz wrong with that? It’s basic Christian doctrine. But it doesn’t fit the dominant internet narrative that religious people are stupid, irrational and intolerant.

Methinks also there is a lot of jealousy out there on the internet. It is not only hostile territory for the PAPpies (rightly so), but also for successful people. There seems to be a “tall poppy syndrome” on the internet. Google the term if you are a “green-eyed “char tou”, envious of others.

The vileness of the attacks on pastor boy and CHC are gd examples (Auntie’s different as she can’t sing or act). I’ll blog on other examples. Juz because the PAPpies do DRUMS to the beat of RAVII****, doesn’t mean we have to follow them. Be mean by all means (this blog believes in being mean, provided there are reasonable grounds to be mean) but don’t do the RAVII DRUMS.

Use this method (used successfully by a secret police force) to evaluate the reasonableness of data before being mean.

Other CHC related posts

https://atans1.wordpress.com/2012/07/16/chc-missing-a-trick/

https://atans1.wordpress.com/2012/06/29/chc-charity-denial-persecution/

https://atans1.wordpress.com/2012/07/13/chc-a-prophecy/

https://atans1.wordpress.com/2012/07/06/render-to-caesar-the-things-that-are-caesars/

*A stockbroker is “Someone who invests your money until it’s all gone.”

**Who in certain poses and when viewed from certain angles can be pretty gorgeous. But not in China Wine or when she leaves her hair black.

***But not rich enough to indulge her in her singing ambitions. Or they know she can’t sing or act?

****Recriminations, Accusations, Vilifications, Insinuations & Insults

Performance-related pay: Not applicable to CEOs and minsters

In Corporate governance, Political governance, Public Administration on 11/09/2013 at 5:32 am

The financial industry especially investment banking and broking gets a bad name because of the outlandish bonuses for the rainmakers or the swinging big dicks i.e. top traders and salesmen. But it’s abt income generated whether thru fees, commissions or trading profits. Example: 46%  of the department of Merrill Lynch’s Global Wealth & Investment Managment revenue comes from only 21% of its top-producing brokers, about 2,500 people. http://www.reuters.com/article/2012/05/09/us-merrill-brokers-elite-idUSBRE84817N20120509

Of course there is moral hazard: losses are borne out to shareholders and taxpayers. And sure there are issues of cost and risk allocations especially the cost of capital used but there is a link between productivity (measured here by revenue) and pay.

BUT

There is no correlation between FTSE 100 bosses’ pay and the performance of the companies they run, a BBC report reveals.

And

C.E.O. Pay Keeps Climbing Shareholders have sounded alarms over executive pay and achieved victories at companies like Citigroup and Hewlett-Packard. But despite the noise, the median pay of the nation’s 200 top-paid C.E.O.’s was $14.5 million last year, an increase of 5 percent from the year earlier, according to a study conducted for The New York Times by the compensation data firm Equilar.

“One might reasonably conclude that the senior management of a bank cannot possibly know what is going on at the level of the individual traders; banks are just too complex. Fair enough. But one cannot have it both ways. If bank executives cannot be held responsible for all the shenanigans that go on underneath them, nor can they be responsible for all the profits that result. A lot goes on at a bank that is entirely out of the CEO’s control. So when Barclays makes a bumper profit, why should the CEO get an outsized bonus? The profits may be down to luck, or to rising markets, or to trades that the CEO cannot possibly be aware of.”

So the fallacy of paying ministers, CEO-like salaries is based on the wrong premise. CEOs’ pay are not performance-related.

Then, there is another problem with performance-related pay for ministers. This time the issue of collegiality. Everyone is more or less paid the same to promote team-work and shared responsibility. Remember collective cabinet responsibility is a political convention.

Tharman, Teo, Ng, Khaw, Shan, Kee Chui and now VB* (notice that the Indians are punching above their weight** despite only constituting 7% of the population) have to carry the likes of Yaacob, Lui, Tan, Fu, and Hng Kiang. In the cabinet, the salary differentials are very narrow according to PM, so the gd performers don’t get that much more. But thank god for small mercies. We once had to pay for SM Goh, Raymond Lim, DPM Wong, George Yeo, VB (not cut out for “compassion” jobs but gd at “rational” tasks?) and Mah, in addition to the present bunch of non-performing cabinet ministers who were then in cabinet. And wider still what abt the Speaker, and jnr ministers and parly secs?

Finally there is the point raised by this TRE reader? Can ministers who are ex-generals earn that much in the private sector https://atans1.wordpress.com/2012/01/25/refute-this-question-pap/

*”Haze? What haze?” since he shouted “Rape!” at the Indons. I mean PM said haze was returning: he was wrong; as usual. I mean the haze season is ending. Related post: https://atans1.wordpress.com/2013/07/05/haze-pm-silence-is-not-a-solution/. And he doing something about the flooding at Orchard Rd and now an expressway: listening to the engineers who have advocated spending money on flood prevention projects. Yaacob stuck his head under sand under the water, like what he and his sis did when LKY uttered his Hard Truth about the Malays, muttering something about “worse case scenario”. His sis was there when LKY made the remarks. It was left to PM to sort dad out. https://atans1.wordpress.com/2012/02/10/state-of-the-pap-my-light-hearted-analysis-based-on-gossip-heard/

**Judged by relative results

Norway’s SWF: transparency & performance not exclusive

In Corporate governance, Financial competency, GIC, Temasek on 15/07/2013 at 5:09 am

From FT

Transparent, yet doing well.So large it owns an average 1.25% of every listed company in the world, or 2.5% of every European listed company.

Temasek, GIC and govt can learn from Norway? Pigs will fly first, I suspect.

Update two hrs after publication:

Unlike Temasek, it ain’t big on Chinese banks

Temasek owns big chunks in three out of four China’s major banks

– 2% of Bank of China

– 8% of China Construction Bank

8% of Industrial & Commercial Bank of China,

Temasek has accumulated more than [US]$17 billion of holdings in Beijing-based ICBC, China Construction Bank Corp. (939) and Bank of China Ltd. over the past two years, according to data compiled by Bloomberg. Global firms including Goldman Sachs and Bank of America Corp. have divested holdings as new capital rules known as Basel III make it more expensive to hold minority stakes in banks. (Bloomberg few days ago)

https://atans1.wordpress.com/2013/07/02/time-to-worry-about-temaseks-strategy-on-chinese-banks/

BTW

Temasek has stakes in three out of the four biggest Chinese banks. It therefore has stakes in the world’s largest, fifth and 9th largest banks. It doesn’t have a stake in Agriculutural Bank, the 10th largest.

Why SIAS should sit down and shut up

In Corporate governance, Financial competency on 28/06/2013 at 7:04 am

So long as shares go up, investors don’t care about corporate governance

The Trade: In Shareholder Say-on-Pay Votes, More Whispers Than Shouts The Dodd-Frank Act required shareholder approval of executive pay packages, but investors don’t seem to care about pay if their stocks are up, says Jesse Eisinger of ProPublica.

DEALBOOK

Splitting the CEO and Chairman roles: It’s complicated …

In Corporate governance, Financial competency on 21/04/2013 at 6:20 am

if the firm is having performance problems; it’s not so helpful if everything is running smoothly. Our study showed that CEO-chairman separation tends to reverse a company’s performance: Low-performing firms benefit from a separation event, while high-performing firms suffer.

It also matters how the firm chooses to separate its top jobs. For the company to see this reversal of fortune, it has to go through what we call a “demotion” separation, whereby the CEO remains the same, but a new, independent chairman is appointed to oversee him or her.

http://www.businessweek.com/articles/2012-11-01/splitting-the-ceo-and-chairman-roles-it-s-complicated

Why S-Chips no hew our laws

In China, Corporate governance on 26/03/2013 at 5:46 am

Chinese no hue US laws.

Ned L. Sherwood won a proxy contest with the ChinaCast Education Corporation, an education company based in China that is incorporated in the United States, but the ousted executives subsequently transferred all the company’s valuable Asian assets, leaving Mr. Sherwood and the US public shareholders with nothing but a lawsuit in China. The deal highlighted the risks of investing in Chinese companies.

AND

Now some distressed debt investors get to find out what exactly it is you buy when you buy American-issued debt in a company incorporated in the Cayman Islands and doing business in China. I suspect the answer will be “not much.” http://dealbook.nytimes.com/2013/03/22/chinese-solar-giants-bankruptcy-presents-a-test/?nl=business&emc=edit_dlbkpm_20130322

But investors still buying these bonds.  http://blogs.reuters.com/breakingviews/2013/03/22/exposed-bondholders-suffer-solar-burns-in-china/

Citi sees shareholders* no ak, ignores their wishes

In Banks, Corporate governance, Temasek on 07/03/2013 at 5:37 am

Citigroup Makes Preparations for Profit-Sharing Plans Executives of Citigroup “stand to collect $579 million under profit-sharing plans that include the one shareholders voted against last year. The lender booked a $246 million expense in 2012 tied to the plans, adding to $285 million for the previous year and $48 million in 2010, according to regulatory filings,” Bloomberg News reports.

Charles Peabody, an analyst with Portales Partners LLC in New York, said the payouts are difficult to justify given last year’s shareholder rejection. Peabody, who told clients in a 2011 note that he was “dismayed” by the lack of stringent financial thresholds in that year’s plan, said today that Citigroup hasn’t done enough to tie pay to performance.

“The compensation plan was a travesty,” said Peabody, who has an underperform rating on the shares. “Citi’s board and management team continue to make a mockery of shareholder, political and regulatory demands that compensation reflect performance.” …The profit-sharing payouts are on top of annual salaries and bonuses granted to senior executives …

… Citigroup’s use of pretax profit to grant awards “sets the bar too low,” said Hodgson, the compensation analyst. “They’re not looking at anything else apart from pretax income, which is just not a good enough measure of a bank’s performance.”

*GIC still has a slug of Citi

Asean round-up

In Casinos, Corporate governance, Indonesia on 23/02/2013 at 6:49 am

The Philippine unit of Macau casino company Melco Crown Entertainment Ltd  said on Tuesday it plans to sell up to 1 billion shares as it prepares to develop a $1 billion casino-resort project with local partner Belle Corp.

Melco, run by Australian billionaire James Packer and the son of Macau gambling tycoon Stanley Ho, bought a 93% in Manchester, a formerly illiquid stock with investments in pharmaceutical and real estate businesses. Melco paid Manchester shareholders 1.3 billion pesos for the backdoor listing.

Melco and Belle, controlled by the Philippines’ richest man, Henry Sy, formalized their partnership in October.

Belle plans to build an integrated entertainment resort complex called Belle Grande Manila Bay, which features a 30,000-square-metre casino in a sprawling gaming complex being developed near Manila Bay. Melco will operate the casino.

There are three other groups with casino licences in the Philippines.

Financier Nathaniel Rothschild has lost his bid to oust the current board of coal mining giant Bumi, the company he helped to found.

Chairman Samin Tan survived a vote to remove him but informed the board he was stepping down.

Mr Rothschild had wanted to rejoin the company and expel 12 of the 14 board members, including the chief executive and chairman.Allegations of financial irregularities at Bumi’s key Indonesian operating subsidiary, PT Bumi Resources – in which it owns 29% alongside the Bakrie family – first emerged in September 2012 , after Mr Rothschild received information from a whistleblower.

Thailand’s economic growth exceeded expectations in the last three months of 2012 as it continued to recover from the previous year’s devastating floods.

Gross domestic product surged 18.9% in the October-December period, from a year earlier. Most analysts had forecast a figure close to 15%.

Compared with the previous quarter, the economy grew by 3.6%. But inflation is a concern.

Asean round-up

In Corporate governance, Indonesia on 26/01/2013 at 5:52 pm

Problems Chinese and British investors face.

Chinese investments in Burma

U/m extracted from BBC report:

— China has nearly $14bn of interests in Burma – one third of all foreign investment in the country

— About US$13bn of that has been invested since 2008

— Most investments are in hydro-electric power, oil and gas, mining, jade and teak

— Critics say a US$2.5bn project for twin oil and gas pipelines from the Bay of Bengal to western China will provide China with cheap energy while Rangoon continues to suffer power cuts

— In 2011 Burma halted a hydropower project, the Myitsone dam on the Irrawaddy river, which would have created a reservoir bigger than Singapore.

— There is a major row between villagers and a mining project that the Chinese have an investment in. The copper mine, is a joint venture between China’s Wanbao company – a subsidiary of the arms manufacturer, Norinco – and the business arm of the Burmese military,People have badly hurt protesting against the US$1bn expansion of thr copper mine.

Corporate governance row continues in Indonesia

Coal miner Bumi has said it is unable to substantiate claims of potential financial and other irregularities at its Indonesian operations.

Bumi is facing a battle for control after agreeing to a shareholder vote that will decide the future of the majority of its board members.The vote will take place in February, at a date to be named.

Nathaniel Rothschild, co-founder of Bumi, had demanded the vote in an attempt to return to the firm’s board. Mr Rothschild wants to oust 12 of the 14 board members and bring in new ones in an effort to turn the firm around.

He had quit the board last year amid a row with Indonesia’s Bakrie family.

Bumi owns a stake in key Bakrie assets and there have been tensions between the two over potential irregularities at one of the Bakrie firms.

The dispute revolves around Bakries’ Indonesian firm PT Bumi Resources, in which Bumi owns a 29% stake.

Mr Rothschild had called for a radical clean-up at the firm in 2011, leading to relations between the two being soured. Last year, Bumi began an inquiry into what it said were “potential financial and other irregularities” at the firm.

Then, the Bakrie family offered to buy back its assets from Bumi for an estimated $1.4bn (£870m) and split from the firm.

However, Mr Rothschild said the proposal was “not in the interests of minority shareholders” and resigned from the board.

The deteriorating relations between the two key shareholders have stoked fears about the future of the firm and hurt its share price. Its shares have plunged more than 65% in the past 12 months.

Bumi has also been hurt by a drop in coal prices, which has hurt its earnings and forced it to review its expansion plans.

Indons no “hue” UK governance rules

In Corporate governance, Indonesia on 28/12/2012 at 5:58 am

UK Takeover Panel is asking questions of Bakries and another Indon investor in Bumi for time being can only vote 29.9% of their shares.

http://www.guardian.co.uk/business/2012/dec/19/nat-rothschild-bumi-resume-conflict

 

Corporate governance Indon style cont’d

In Corporate governance, Energy, Indonesia, Uncategorized on 14/12/2012 at 6:00 am

The  Bakrie Group said this week some documents used to justify an investigation at Bumi Resources PLC were stolen or accessed by hacking.

“Some of these documents appear then to have been ‘doctored’ to give a purposely misleading impression of a number of business transactions at Bumi Resources,” a Bakrie Group spokesman, said on Dec. 10. The Bakries plan to submit a report to U.K. police and regulatory authorities, while Indonesian police are probing the hacking complaints, Fong said.

Nathaniel Rothschild described the allegations as a “desperate attempt to divert the inquiry” by the Bakries and Chairman Samin Tan. He said e may seek to remove the board of the coal venture he founded with Indonesia’s Bakrie family in the coming weeks because it has failed shareholders.

http://www.bloomberg.com/news/2012-12-12/bumi-seeks-to-end-ties-with-bakries-as-von-schirnding-named-ceo.html

FTs running SGX wanted this turd

In Corporate governance, Financial competency, Uncategorized on 11/12/2012 at 6:40 am

Earlier this year F1 annced that it would list here. It then pulled back its listing citing market conditions. This could have been true as markets were volatile when it pulled its IPO. But F1 is now shown to be in one big legal mess.

On its face, the investment by CVC Capital Partners in Formula One seems like a winner. But thanks to recent lawsuits, “this enormously rewarding investment may now be in jeopardy,”Steven M. Davidoff writes in the Deal Professor column. A firm that was a competing bidder for Formula One, Bluewaters Communications Holdings, recently sued CVC, the bank BayernLB and Bernie Ecclestone, the Englishman who built the racing business. The claims are over a payment that has already been a source of legal headaches. Bluewaters says the payment was to “steer the sale of Formula One to CVC,” Mr. Davidoff writes, and the firm is “claiming at least $650 million in damages, the lost profit it would have earned had it bought Formula One.”

Well investors and S’pore have been spared this dog with fleas. No thanks to the CEO and COO of SGX, FTs all. And they are advertising in FT, six other posts hoping to get more FTs to keep them company.

And this despite S’pore slipping further down the IPO league tables, with KL at 5th place and HK at 4th. There are no FTs in KLSE.

Meritocracy’s feet of clay: Ong Ye Kung

In Corporate governance, Political economy, Political governance on 10/12/2012 at 5:29 am

(Update on 3 January 2013: He has joined Keppel Gp, a TLC, and not as expected his father-in-law’s property company. I’ll be blogging on this next week. Want to try to find out if his in-laws scared that their workers’ will go on strike or be unhappy if he joined them. I mean his record at SMRT/ NTUC not too good.)

Our nation-building constructive media are ignoring the white elephant in the space where of the circles of TLCs/GLCs, PAP, NTUC and the civil service meet: sometimes also known as S’pore Inc.

Once upon a time, Ong Ye Kung, was S’pore Inc’s poster boy of meritocracy.

Just in April 2011, before the May GE, our nation-building constructive media praised him as an example of meritocracy at work. Son of a Barisan Socialist MP (and no friend of one LKY), he was a scholar* who rose to a senior civil service post**, then became a senior NTUC leader, and then a PAP MP candidate. It was whispered that he was Zorro Lim’s anointed successor as NTUC chief; and was tipped by ST as a future candidate for ministerial office. He did became the NTUC’s Deputy Secretary-General in June 2011.

But by then his slave worker drawn chariot had gotten stuck in the mud . He was a member of George Yeo’s losing Aljunied GRC team. Worse was to follow in 2012: the wheels came off his chariot of gold and ivory and he was thrown-off, and cast into the darkness and mud and became a person that the constructive, nation-building media knew not.

Earlier this year, SMRT’s S’porean drivers made known publicly their unhappiness over pay proposals that had his endorsement as Executive Secretary of NTWU (Nation Transport Workers’ Union). As he was also a non-executive director of SMRT, if he were an investment banker, a US judge would have rebuked and censured him for his multiple, conflicting roles.

Then he resigned, effective last month, from NTUC to “join the private sector”.

In perhaps a farewell, good-riddance gesture, FT PRC workers went on strike (illegally) and we learnt:

— they lived in sub-standard accommodation (SMRT admitted this);

— unlike most SBS FT PRC drivers, most of SMRT’s PRC drivers were not union members; and

— Ministry of Manpower reprimanded SMRT for its HR practices.

All this reflects badly on Ong: NTUC’s Deputy Secretary-General,  Executive-Secretary of NTWU and SMRT non-executive director. And on the system that allowed him to rise to the top. After all his ex-boss said the following reported on Friday, which given Ong’s multiple roles in SMRT, can reasonably be interpreted as criticism of Ong:

In his first comments on the illegal strike, which saw 171 workers protesting over salary increases and living conditions, the Secretary-General of the National Trades Union Congress (NTUC) said the labour dispute “shouldn’t have happened” and “could have been avoided”. [So where was Ong: looking at his monthly CPF statements and being happy?]

NTUC is thus reaching out to SMRT’s management to persuade them “to adopt a more enlightened approach to embrace the union as a partner”, he added. [Hello, NTUC’s Deputy Secretary-General was on SMRT’s board, so what waz he doing?]

Mr Lim, who was speaking to reporters on the sidelines of the Labour Movement Workplan Seminar, cited the example of SMRT’s rival SBS Transit where nine in 10 of its China bus drivers are union members. Only one in 10 of SMRT’s China bus drivers are union members, according to union sources. [So, why didn’t Ong advise SMRT to help unionise these FTs, and if he did, why didn’t NTUC push harder ehen SMRT refused?]

SBS Transit’s management “recognised the constructive role of the union”, while union leaders “played the role of looking after the interests of the drivers”, said Mr Lim.

“And as a result … they work very closely as one team, it’s a win-win outcome. In terms of how workers are being treated and respected, how management are responsive, how they work together, I think it’s a kind of model that we ought to see more and more in Singapore.” (Today)

Apparently, Ong is supposed to join his father-in-law’s property development business: but with this revelations, it should come as no surprise if his in-law’s family has reservations about him: he might mismanage and upset the workers. Property development companies are fragile because of their leverage: they can’t afford executives who can’t execute.

And if anyone is wondering about the origins and meaning of the term “feet of clay”:

Thou, O king, sawest, and behold a great image. This great image, whose brightness was excellent, stood before thee; and the form thereof was terrible.

This image’s head was of fine gold, his breast and his arms of silver, his belly and his thighs of brass,

His legs of iron, his feet part of iron and part of clay. (Daniel 2:31-33)

And whereas thou sawest the feet and toes, part of potters’ clay, and part of iron, the kingdom shall be divided; but there shall be in it of the strength of the iron, forasmuch as thou sawest the iron mixed with miry clay.

And as the toes of the feet were part of iron, and part of clay, so the kingdom shall be partly strong, and partly broken.

And whereas thou sawest iron mixed with miry clay, they shall mingle themselves with the seed of men: but they shall not cleave one to another, even as iron is not mixed with clay. (Daniel 2:41-43)

…………………….

*From 1993 to 1999, he was in the then Ministry of Communications, where he helped develop the Land Transport White Paper and was part of the team which established Singapore’s Land Transport Authority. Taz right, he was there at the beginning of the great SMRT cock-up.

**He was the Principal Private Secretary to one Lee Hsien Loong, then became the CEO of the Singapore Workforce Development Agency.

Olam: Snake bites itself

In Accounting, Commodities, Corporate governance on 06/12/2012 at 10:00 am

Opps looks like Olam tried to be too clever by half. By calling a rights type issue but not answering two of Muddy Point’s questions (that it is spending lots of $ on lousy investments and the restatements), investors have decided to sell given that there will a lot more debt, at expensive prices, a possible dilution, and that Muddy Waters might just be right.

Then there is the cred of management: saying it had lots of cash but then calling yet another bond issue. And having to retract a statement on the approach to Temasek.

In such a confused situation, investors might as well sell esp with the year end in sight.

And on a technical issue: leaving the warrants to be priced tomorrow was asking for trouble.

All in all, management and its investment banks have not covered themselves in competency.

Update:  “The latest Temasek-backed transaction raises significant issues, as it is extremely expensive debt and equity capital, capital that Olam spent a week telling the market it didn’t need,” said Dee. “Muddy Waters is not the issue here, it is Olam’s strategic and financial decisions that have brought this situation to a head.”

Olam: Snake confuses mongoose

In Commodities, Corporate governance, Temasek on 04/12/2012 at 5:58 am

Olam proposed an underwritten rights issue of US$750m in principal amount of 6.75% bonds due in 2018, along with 387.4 million free detachable warrants. The issue price of the bonds will be 95% of the principal amount and the gross proceeds from the issue of the bonds are US$712.5 million. Terms of bond are generous.

Olam said the transaction was fully backed by  Temasek which owns a 16% stake in the company. Temasek’s commitment “is a very strong, decisive action (for investors) not to have any worries about any of the allegations,” Olam’s CEO said.

The issue is underwritten by four major bank creditors: Credit Suisse, DBS, HSBC and JP Morgan. Again another sign of confidence.

So Temasek and the banks are onside. Goes without saying that the Indian conglomerate controlling Olam will subscribe for its share: It would, wouldn’t it?

And the shortists will have to cover their positions as investors recall their shares to make sure they get their rights.

Yr move, mongoose.

PS (at 8.50am): Gd counter by snake (must be King Cobra) to offer to pay for credit rating. Ang Moh Kaws must never underestimate Indians.

Update (1.15pm)

Shares of Olam climb more than 8%

Olam: Mongoose bites snake

In Commodities, Corporate governance on 03/12/2012 at 7:25 am

Muddy Waters offers to pay for Olam to get debt rating. It is a cheeky response to Olam’s “shock and awe” response (constructive, nation-buildingST’s description) to its allegations.

Wonder what excuse Olam will give when refusing to accept offer? After all Temasek, its investee, has a debt rating. And it is a SWF

Wonder what Olam’s banks’ will think if it rejects offer?

 

Olam: Ang Moh Kaw bites

In Commodities, Corporate governance on 28/11/2012 at 5:21 am

It’s been over a week since  Muddy Waters made allegations about the accounts of Olam. Since then Olam has come out swinging, refuting the allegations and suing.

Yesterday evening, the report was made available. Most of the issues have been flagged by analysts earlier. But there are issues about the restatements of accounts that don’t affect profits and capex that need addressing by Olam.

Remember Temasek owns 16% of Olam. So it too will be studying the report.

Indonesia: Fight connections with connections

In Corporate governance, Indonesia on 08/11/2012 at 6:48 am

Citi: Last dog in the race

In Banks, Corporate governance, GIC on 23/10/2012 at 5:15 am

http://www.businessweek.com/articles/2012-10-18/a-daunting-to-do-list-for-citigroups-new-ceo#p1

And we own a big chunk of it still. ((((((

FT’s banking editor suggested that it could be split five ways: “into an equity and fixed-income trading entity; an advisory platform; a US retail bank network; a global trade finance shop; and an emerging markets retail bank.” [This para added at 6.07am on day of publication.]

Indonesia: Governance is an issue

In Corporate governance, Indonesia on 18/10/2012 at 6:39 am

I’m bullish on Indonesia, but governance issues give me regular heart tremors.

Nathaniel Rothschild, co-founder of coal mining giant Bumi, has quit the firm’s board amid a row with Indonesia’s influential Bakrie family.

MFA refutes Indonesia news report on extradition.

Indonesia: An interesting statistic

In Corporate governance, Indonesia on 07/10/2012 at 10:01 am

Less than US$1bn of the US$26bn in net equity inflows into Asia outside of Japan have gone to Indonesia this year, HSBC estimates. Seems that there isn’t enough quality investments there. Well we know corporate governance is an issue even among friends  https://atans1.wordpress.com/2012/09/25/indonesia-even-friends-get-screwed/.

Indonesia: Even friends get screwed

In Corporate governance, Indonesia on 25/09/2012 at 6:21 pm

Samin Tan, an Indonesian entrepreneur who bought 23.8% of Bumi Plc at almost £11 pound a share from the Bakries last year after the family was unable to top up a loan guaranteed by Bumi Plc shares. He now has 29% and is executive chairman but yesterday the shares fell a further 25% and closed eventually at 148p. But the Bakries still control PT Bumi where the alleged irregularities occur.

 
A Bakrie is the chairman of the Golkar party (part of the ruling coalition) and is a presidential candidate in next year’s Indon election.
 
God what a country and what a family.
 
More on the family . Updated on 26 Sept at 8.16am.
 
 

Rot at SGX continues despite (or because of?) FT CEO & president

In Corporate governance on 01/09/2012 at 8:40 am

Not only are the two FTs unable to attract mega-IPOs, CIMB Research says the string of privatisations is likely to continue, helped by cash-rich buyers, highly-valued Asian consumer franchises and battered valuations for cyclical companies.

We have seen a few privatisation offers, the latest being Heineken for Asia Pacific Breweries and another from Thai energy firm PTT to buy out Sakari Resources.

CIMB said stocks that may receive privatisation offers include offshore marine firms CH Offshore and KS Energy, as well as property developers such as Bukit Sembawang and Ho Bee.

To identify privatisation situations, CIMB looked at stocks trading below 1 standard deviation from their historical trading ranges and shareholders with interest and means to de-list the companies.

“We believe that globally, corporates have been building up cash to prepare for the worst, ever since the global financial crisis. They have the means to make an offer.”

Related rant: https://atans1.wordpress.com/2012/08/28/rubbishing-msias-ipo-streak/

Independent directors can continue sleeping on the job

In Corporate governance on 14/08/2012 at 6:58 pm

Chief Justice Chan Sek Keong’s recent acquittal of two former board members of Airocean Group should make it harder to prosecute independent directors of Singapore-listed companies.

He made it clear that companies may not have to disclose information because it is trade (business not market, I assume) sensitive: the information has to be likely to significantly move the share price as well. And directors in most instances should not be expected to question professional advice that they receive with respect to how they discharge their duties.

Independent directors were scared after a district judge convicted former Airocean independent directors Peter Madhavan and Ong Seow Yong on charges related to disclosure lapses from 2005 relating to the corruption investigation of ex-Airocean chief executive Thomas Tay.

Another nail in the coffin of our regime of disclosure. If can suka-suka no need to dislose WTF! I prefer DJ’s reasoning. Hope AG “appeals”.

S-Chip after S-Chip shows that corporate governance didn’t work. Yet independent directors never ever were held accoutable except in one case: directors there were slapped lightly on the cheek by SGX. WTF!

Is PAPpie Ong Ye Kung behaving like a bad Goldie investment banker?

In Corporate governance on 09/08/2012 at 6:16 am

So SMRT bus drivers have given a tight slap to their union chief* and  NTUC’s deputy secretary-general, who is also a board member of SMRT Corporation, Ong Ye Kung. He also happens to be part of the PAP GRC team that lost Aljunied. He had told them that working six days a week is a fairly standard arrangement, and insisted that with the increase in basic pay, their salaries will be higher, compared with what they had earned in a five-day work week plus an additional day with overtime pay**.

They have complained to his NTUC boss, a cabinet minister.

He is lucky he is not in the US, and not an investment banker. A few months ago, a judge’s ruling made Goldman Sachs potentially liable for some pretty serious damages if shareholders of a company wanted to sue it (Some are). Anyway, the ruling was another hole below the hull in Goldmans fast sinking reputation.

Goldman was on every conceivable side of a deal involving the sale of El Paso. As a result, El Paso may have unwittingly sold itself far too cheaply. Goldman was inherently conflicted because it represented El Paso for part of the time in the sale negotiations with Kinder Morgan, the buyer, and advised El Paso on a possible spinoff of its pipeline business. But Goldman’s private equity arm also owns 19.1% of Kinder Morgan and has two appointees on Kinder Morgan’s board. For more details see links below.

Sounds a bit like Ong’s position. He is everywhere in the proposed pay deal: union leader of the drivers, negotiating for drivers, leader of the constructive, nation-building NTUC, SMRT director, and who knows where else.

No wonder, the drivers don’t trust his judgment.

And then there is a big question mark on his character. His dad, now deceased, was a fierce opponent of the PAP. So fierce, that he was detained under ISA. Yet he joined the NTUC, a training ground for Sith Lords. And became a PAPpie after dad died, standing in Aljunied GRC and helped create history by being part of George Yeo’s losing team: first PAP, and combine ministerial and NTUC team (two cabinet ministers and one jnr minister and two NTUC leaders) to lose a GRC.

Links mentioned above

http://dealbook.nytimes.com/2012/03/01/the-losers-in-the-el-paso-corp-opinion/?nl=business&emc=dlbkpma1

http://dealbook.nytimes.com/2012/03/05/advising-deal-goldman-sachs-had-all-angles-for-a-payday/?nl=business&emc=edit_dlbkam_20120306

————————————

*The executive secretary of the National Transport Workers’ Union.

**To be fair to him, it sounds like a gd deal. But I defer to the judgement of those affected. I’m no elitist even though I’m from RI. I even once won a prize for academic excellence.

StanChart in v.v. serious trouble

In Corporate governance, Temasek on 07/08/2012 at 5:51 am

Opps spoke to soon abt StanChart https://atans1.wordpress.com/2012/08/04/wheres-the-cheers-for-temasek/ According to the FT, it could lose its NY licence. Price fell 6% on the news. Wonder if our MSM will report this?

Standard Chartered Accused of Hiding Iranian Transfers Calling the British bank a “rogue institution,” New York State’s financial regulator has accused Standard Chartered of enabling Iranian businesses to hide illegally more than $250 billion in transactions, Jessica Silver-Greenberg reports.

Yikes! Prosperity Gospel works!

In Corporate governance on 06/08/2012 at 5:49 am

(Or “Gd PR for Kong’s message that donors’ wealth multiply will manifold” or “Other people’s money: taz the Prosperity Gospel’s message”)

When I read that Kong Hee ‘s fellow defendants had all engaged Senior Counsels to defend them*, I tot, “Where get money leh?” A SC is not cheap. In a recently concluded case, the SC’s fees (including that of his team of junior lawyers), I know, amounted to over S$1m. And it was rumoured that Susan Lim, the surgeon, sold her Sentosa Cove bungalow for over S$30m, partly to fund her ongoing case that the medical authorities took out against her.

So I expected the question of whether the City Harvest Church  was funding the defence to be raised by netizens or the MSM, and if the CHC was funding their defence, how come the Commissioner of Charities allowed it?

Or, I tot, maybe CHC had the foresight (thanks to the God its members worhip?) to have bought a “water-tight” insurance policy that covered its managers legal liabilities? Bit like indemnity policies that doctors, lawyers, accountants, company directors etc take out, except a lot more generous.

Then CHC announced that it was not funding the defence. And there was no mention of an insurance policy.

I then tot, “Wah maybe Auntie Sun’s hubbie’s and CHC’s message that donations to the church would cause donors personal wealth to multiply manifold, is true?”

After all, his co-defendants were at best middle management level professionals earning at best decent salaries, so how can afford SCs? They were not like Kong and Auntie Sun who were entrepreneurs: they spotted a gap in the market that other Christian churches were not exploiting, and went for it. The result: a Sentosa Cove penthouse for Kong Hee, and a rented Hollywood mansion a singing career for Auntie (even then she got other people’s money to fund her fantasies). .

Well turns out that Kong Hee’s friends (and him) are “blessed” by their God. According to a  ST report on Saturday, members are rushing to fund the defence of them and Kong. As it’s not via the church, it’s legal. Maybe when the dust clears over the criminal charges, the members should fund Auntie’s Hollywood lifestyle and her singing career Crossover Project direct? But then all the details of all her expenses might become public.   

In “high finance”, a central premise is that the ability to mobilise funds or in the jargon “using other people’s money” is the best indicator of one’s success as a deal maker, and vof one’s influence. By that criteria, Kong and friends are very, very succesful. They can mobilise other people’s money for their own ends. QED: “Prosperity” gospel works.

S’porean Chinese who worship money: forget about going to the Middle Road Quan Yin temple or its branch at Tembling Rd or any other temple famous for rewarding devotees. Juz attend CHC, and make a mega donation.

Leave the rest to the God of the Prosperity Gospel.

———–

*While Kong did not engage a SC, his lawyer charges about the same rates as a typical SC, if not more.

F&N/ APB: Slightly better terms

In Corporate governance on 03/08/2012 at 6:02 am

Secret Squirrel tells me that the F&N Board would recommend a marginally improved offer by Heineken for F&N’s share of APB. Given that Heineken already has more than 51% of APB, no one would bid against it. So if F&N rejected the offer, and the Dutch walked away, ang moh fund mgrs would be howling in pain and anger, rightly so.

Now let’s see if ThaiBev can block the bid via its stake in 24.1% in F&N. Or will it try to make a deal with the Dutch in exchange for supporting the deal. Kirin, with 15%, will be talking to F&N, to see if can gain shumething for supporting the deal.

Kirin and Coca-Cola interested in F&N’s soft drinks biz which has bigger market share in S’pore and M’sia than Coca-Cola’s: 26% versus 13%. Grewing faster too 10% average growth versus 5% in last five yrs.

F&N on its way to be a property co. Think it will have problems.

F&N/APB: Fun & games

In Corporate governance on 26/07/2012 at 6:02 pm

The price of APB closed at the takeover price, down 3.9%. Bit strange as I tot that the reason it traded to $52 yesterday was because it was in the interest of some people to keep it at above the takeover price of $50, making it more difficult for F&N to accept the bid by tomorrow. Watch and wait.

Another analysis on the break-up value of F&N http://www.breakingviews.com/asian-conglomerate-owners-owe-heineken-a-toast/21031773.article.

F&N & APB: Updates

In Corporate governance on 24/07/2012 at 7:03 pm

The Wall Street Journal reports: “Kirin Holdings Co. is in early discussions with bankers for a potential bid for Asia Pacific Breweries Ltd., a move that could intensify the battle for control of the Singapore maker of Tiger beer, people familiar with the matter said Monday.”

Goldmans appted to adise F&N and Nomura’s analysis 

http://www.nytimes.com/reuters/2012/07/23/business/23reuters-apb-shares.html?_r=1&src=busln&nl=business&emc=edit_dlbkam_20120723

Another co decides not to list on SGX

In Corporate governance on 23/07/2012 at 6:48 am
Reliance Communications  postponed the Singapore listing of its undersea cable division. In a statement the group said it would “await supportive market conditions and easing of prevailing global uncertainties to proceed with the offering/listing at an appropriate time in the future”.
 
OK, so my headline is misleading. But MU too delayed its posting for a similar reason and now has gone to the US. F1 too delayed its listing and the constructive, nation-building MediaCorp reported that it might not be listing here after all.
 
And as I bitched earlier, the FT ang moh CEO’s contract has been renewed, and that his number two is also an FT.   https://atans1.wordpress.com/2012/06/27/sgx-learns-from-fas/ 
 
WTF!!!!!  Ang Moh and other FTs tua kee? 
 
Especially since the ang moh is talking big about attracting big IPOs (especially Asian ones). Missed maybe three in a row.  

Bid tests F&N’s corporate governance

In Corporate governance on 21/07/2012 at 5:32 am

With competitive offers for a beer business that F&N does not, in the end, control, the company’s independent directors should be working to extract the best deal for all shareholders – not just its new Japanese and Thai constituents.

Int’l media’s analysis

http://www.breakingviews.com/heineken-tries-to-take-the-asian-tiger-by-the-toe/21030929.article

http://dealbook.nytimes.com/2012/07/20/heineken-offers-4-1-billion-for-asia-pacific-breweries-stake/

Waz that again Law Soc?

In Corporate governance on 20/07/2012 at 4:58 am

Or “Law Soc in denial?” or “More patients for you Dr Fonz?”

The Law Society seems to want to be like the PM and his DPMs: trying to be comedians. And no, I don’t mean to talk about its officer,Wong Siew Hong, turning up in court without his jacket (bit like appearing at a wedding in one’s underwear), but this: “LSS asks that commentators check their facts, preferably with LSS, before making their comments.” Ain’t the Law Soc forgetting something?

Forgot that it retracted earlier statements? Statement that many netizens used when commenting on the Law Soc’s actions. The boys and gals at TRE did a good article on this retraction.

But even funnier is: “LSS believes that it is important that the public has confidence in LSS as an independent professional body which has always balanced the interests of the public and individual lawyers.” Come on, pull the other leg, its got bells on it. Ever since the changes initiated by the government in the 1980s, many members of the public and even many lawyers regard the Law Soc as part of the Dark Side: to publicly deny this perception amounts to a form of insanity: denial of a perception.

No, I’m not going to make fun of, “Any suggestion of a conspiracy involving the LSS is untrue and irresponsible” because I’m waiting to see if Ravi denies a report in ST that he was involved in an incident at a temple on Sunday the 15th of July. I mean it’s ST, part of the constructive, nation-building media, and more importantly, the sister publication of STOMP where a “content producer” fabricated a story, and where “content producers” posed as citizen journalists and members of the public.

If it could happen at STOMP, it could happen at ST where during the Hougang by-election, pixs were used very judiciously. One got the impression that Ah Huat was Low’s proxy, while Desmond Choo was “his own man”. And again in that by-election, there was no mention that Desmond’s “model” (his uncle, an ex-PAP MP) is a convicted cheat, facing fresh charges. If it had been Ah Huat’s uncle, I’m sure we would’ve been reminded of the relationship with a criminal.

If Ravi doesn’t deny the story, then I’ll blog on why Wong Siew Hong and Dr Fones should be commended for being good civic-minded S’poreans, even if they did not do things the proper way, and why the Law Soc Council does not deserve any respect. But taz another day.

CHC: A prophecy

In Corporate governance, Humour on 13/07/2012 at 7:51 am

First some recapping:

— CHC mgt says:

“The people currently in the news are our pastors and trusted staff and leaders who have always put God and CHC first,” he said. “As a church we stand with them and I believe fully in their integrity.”

“The S$24 million, which went into investment bonds, was returned to the church in full, with interest… The church did not lose any funds in the relevant transactions, and no personal profit was gained by the individuals concerned.”

— And Geriatric Geisha’s hubbie says : “Kong Hee insisted on his integrity” and “Please know that there are always two sides to a story. I look forward to the day I caun tell you my side of the story in court.”

Going by the above comments by management and Kong,  and the failure of CHC  to appeal against the findings of the Commissioner of Charities, I prophesy that when the court finds him and the other four guilty as charged (Yup I think the court will find them guilty as charged), CHC management, Kong and the other four will simply say,”It was an honest mistake. We know what we did was in accordance with the wishes of the God of prosperity, and we thought it was legal under S’pore’s law. It seems we were badly advised on the latter.”

Based on the words of mgt and Kong, and the failure to appeal against CoC’s findings, the basis of the charges against the Famous Five, it would seem that the factual findings of the CoC is not in dispute.

While there are good legal, and financial (lawyers are expensive and Auntie Sun needs money for her Hollywood lifestyle) reasons not to appeal the CoC’s findings of fact, but to use the coming trials to contest them, the very public assertions of the accused “integrity”, no monies lost, and the deafening silence on the findings of fact by CoC leads me to conclude that

— at the trials, the “pureness” of the motives (saving souls via Auntie Sun’s Hollywood lifestyle and work) will be stressed in the hope that this will lead to their acquittals, and

— if it doesn’t, then they will spin “It was an honest mistake. In our desire to save souls, we unwittingly broke the laws of Caesar for which the five of us will go to jail. Pass the plate round, we need to pay the lawyers and the rent of Auntie Sun’s Hollywood mansion.”

Err someone should ask CHC mgt abt their God’s mansions and how come Auntie Sun and Kong (remember his prnthouse in Sentosa Cove): “In my Father’s house are many mansions: if it were not so, I would have told you. I go to prepare a place for you.”

It’s Official: MU tells SGX to f***off

In Corporate governance, Footie on 04/07/2012 at 7:16 am

MU has applied to list on NYSE.

http://www.bbc.co.uk/news/business-18699885

So much for SGX’s prostitution of its principles. Three cheers for the central bank. https://atans1.wordpress.com/2012/06/14/you-wont-read-this-in-our-msm-mu-frustrated-with-sgx/

Related posts: https://atans1.wordpress.com/2012/06/27/sgx-learns-from-fas/, https://atans1.wordpress.com/2012/06/28/korean-and-jap-exchanges-are-eating-sgxs-lunch-in-asean/

Temasek investment divesting assets as shareholders revolt

In Corporate governance, Energy, Temasek on 11/06/2012 at 7:18 pm

http://dealbook.nytimes.com/2012/06/08/chesapeake-to-sell-midstream-assets-for-4-billion/?nl=business&emc=edit_dlbkpm_20120608

Background on this investment: “bad” https://atans1.wordpress.com/2012/05/27/temasek-the-gd-the-bad-and-the-ugly/

Test needed to ask questions at co. meetings

In China, Corporate governance, Financial competency, Humour, Property on 04/06/2012 at 5:01 am

(Or “Shume really stupid shareholders” or “Why SGX shld pay Mano Sabnani to conduct courses on asking sensible qns at AGMs and EGMs”)  

Sometime back, the media reported that some daft shareholders (same people as those who complained at DBS AGM that DBS paid 50% premium over Bank Danamon’s share price to get controlling stake? I mean these people never ever heard of a premium needed to secure a controlling block?) abt CapitaLand’s China exposure and share price since 2008 or 2007 at its AGM.

Don’t they read the int’l media?

Example from BBC Online:”China has, thus far, avoided the much-feared hard landing,” said IHS Global’s Ren Xianfeng.

“Expect no major property meltdown or construction bust. Expect no deflationary spiral or banking crunch.”

Analysts said that given the steadiness of the property market, policymakers were likely to continue to ease their policies to boost growth.

Ting Liu of Bank of America-Merrill Lynch forecast that China’s economy was likely to grow at an annual rate on 8.5% in the second quarter, up from 8.1% in the first three months of the year.

And on the share price: don’t they realise that equity markets have had a choppy ride since 2008. And that China-related stocks have been the target of bear raids and that CapitaLand is an obvious target to short given that the stock is liquid and shares can be easily borrowed

In case anyone doesn’t understand the reference to Mano, he asks vv intelligent questions at AGMs and EGMs. Only one I can bitch abt is at K-Reit EGM when he queried the price paid for Ocean Towers from its parent. Shumething like Ocean Towers seldom gets sold at mkt price, except perhaps in distressed sale. Kanna pay premium.

How times have changed since the late 70s (Moral suasion)

In Corporate governance, Political governance, Property on 01/06/2012 at 6:39 am
Someone wrote in to Voices as follows
 
Property developers countering govt policy
 
The extra stamp duty of 10 per cent was introduced in December to curb excessive foreign investment in private residential property. This cooling measure has failed. New private home sales last month were the strongest in nearly three years.One possible reason is the increasingly common practice by property developers to absorb the extra stamp duty as part of their marketing strategy, visibly offered as a carrot to potential buyers in their advertisements of property launches.If a government policy could be circumvented this easily, then it has lost its effectiveness. The Government should make it illegal for property developers to absorb any stamp duty.
 
In the late 1970s, never mind making it illegal for property developers to absorb any stamp duty: someone would call up the developers offering this deal and tell them that what they were doing was “not in the national interest”, and please scrap the offers. Developers would listen to the polite request to behave responsibly in obeying the spirit of the law rather than the letter of the law because no developer wanted the tax authorities going thru their books if they decided to follow the letter of the law.
 
How times have changed since when I started work. For the better or the worse in this instance, I am uncertain.