Shin
deal
Why the government hand’s-off
PM lays whatever responsibility on Temasek’s door,
not the government’s, why? Littlespeck comment.
Jan 16, 2007
Singapore’s
stand that Temasek’s deals are commercial ones - whether
believed or not by others - has stymied any government negotiation
to end or reduce probable damages over Shin Corp purchase.
On two
occasions when Prime Minister Lee Hsien Loong met his Thai
counterpart he had not not discussed ideas for resolving
(amended from "had steadfastly refused to raise":
Read letter below) the controversial deal for that reason.
To do
so would have meant the government’s was taking over
the mess from Temasek and therefore confirming – at
least to the Thais - that as Prime Minister and Finance
Minister, he was running the investment show.
It is
probably for the same reason that the government has refrained
from talking very much about the mess, or what should be
done or to act on public calls to “punish” whoever
is responsible in Temasek.
It can’t
publicly do any of these things without confirming outside
perceptions that it is running Temasek, acting on its behalf
or firing its people when things go wrong.
Once
this takes root, it will be nigh impossibly for Temasek
to convince others that it is independent of the government
and jeopardising its future programme of buying into the
region.
In his
interview Mr. Lee reiterated this stand in an interview
with Reuters.
He said
that Temasek should be held accountable if its controversial
purchase of Thailand's Shin Corp doesn't work out, adding
that the deal was not a government matter.
The
Temasek-led consortium is now sitting on a loss on paper
of about US$2 billion, while one of Shin's units faces fines
and damages of about US$2.7 billion due to a licence fee
dispute with the government.
"It's
a commercial proposition. If it doesn't work out, that's
Temasek's fault and it has to answer for it," Lee said
in Cebu.
"It's
their job to safeguard the resources and invest them optimally."
Temasek
pays an annual dividend to its shareholder, the Finance
Ministry, from the returns on its S$129 billion (RM293.28
billion) portfolio of investments, Reuters reported..
Lee
repeated the government's stance that the purchase of Shin
was a commercial deal, not a government-led matter.
"We're
not dealing with it. It's not a government issue. Shin Corp
was an investment by Temasek; it was a commercial investment,"
said Lee.
Lee said it was premature to talk about losses on the Shin
deal.
"When
you make commercial investments there is a risk. And if
you take no risk, you make no reward. So you have to make
sure that across the portfolio, all the projects you have
undertaken, overall you come out ahead," Lee said.
"That's
what Temasek aspires to do. On each case, they are very
careful to make sure that each investment is a good one,
but as it affects results you have to look at the whole
portfolio and decide whether it has been good."
Temasek's
acquisition of Shin is currently under investigation in
Bangkok for possible violations of Thailand's foreign ownership
laws.
Comments
Dear
Mr. Seah,
I
am a regular reader of you columns and have always enjoyed
your incisive analyses of political trends in Singapore.
Being
a Singapore citizen who has emigrated to the United States
for more than 10 years, I can't agree more with your insightful
comments on the political situation in Singapore.
I
have never felt the need to write to you until I read your
commentary on the Shin Corp deal dated Jan 16 in which you
mentioned that "On two occasions when Prime Minister
Lee Hsien Loong met his Thai counterpart he had steadfastly
refused to raise the controversial deal..."
I
have been following the Shin Corp fiasco and that's NOT
the impression I've got from reading the news media.
For
example, in the October 31 2006 internet edition of Bangkok's
The Nation, Singapore's PM Lee Hsien Loong was reportedly
asking Thailand's Sayarud on an amicable solution to the
Shin Corp deal in a sideline meeting during the Asean-China
Summit in Nanning, China.
This
meeting has been widely reported in other news media with
interests in the Shin Corp deal. Hence, I am perplexed by
your claim that Lee Hsien Loong has steadfstly refused to
raise the issue. Can you please explain how you arrived
at your conclusion?
Best regards,
Eng Long Goh
(Editor's reply: Hi, Eng Long, You've got me there.
I missed this part; I read Thai PM saying that S'pore PM
did not discuss Shin Corp issue during their meeting. So
my statement "...refused to raise.." is obviously
wrong. I will amend it to read "..did not discuss ideas
for resolving" the controversial deal for the same
reason. Thank you for pointing out the error.)
YoungPAP
forum
posted
by freethinker
Strange first he always maintain that it’s a "commercial
deal" and government is not involved.
But
then Temasek is like 100%-owned by the government by the
Finance Ministry. How can its CEO decide on spending US$3B
without the approval of the government, especially the Finance
Minister, and even the PM when it is spending so much on
buying shin Corp.
And
now if Temasek did wrong then the government will make them
answer for it. But in the same breath, it is also mentioned
about taking commercial risks and hence in the end the US$3
billion can be writen off as "honest mistakes"
and the CEO of Temasek won’t be accountable, but likely
some of its senior management staff will be transferred
or re-assign as already have seen some portfolio changes.
But
US$3B is too much of money to lose.
Commenting
on Mr. Lee’s statement that Temasek has to be held
accountable, blogger ‘Urbanrant’ asks
“Is that all?”
He adds:
“What is not clear is whether the person or persons
who made the call for the investment will be held to account
as well.”
While
the PM squarely put the responsibility on Temasek, Urbanrant
says he has failed to go one step further to explain what
that means and or what will happen to the leaders who run
the nation’s S$129B portfolio.
In full:
http://urbanrant.blogspot.com/2007/01/pm-lee-temasek-has-to-be-held.html
