Politics of Business with GLC's

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After losing in a bruising board room battle to gain control of NatSteel, is Indonesian businessman Oei Hong Leong being prepared for acceptance and recruitment into the Boards of GLCs ?

Can Oei Hong Leong teach Temasek a thing or two?
Businessmen say the fast-moving tycoon with sharp business acumen can give good advice, which Temasek agrees with

By Lee Su Shyan

CAN businessman Oei Hong Leong teach government investment arm Temasek Holdings a thing or two about divesting of and listing its government-linked companies (GLCs)?

Yes - he is a shrewd, fast-moving operator as well-equipped in this regard as any other successful private sector businessman.

This was the view of leading business figures when asked what contribution could be offered by the tycoon - who sprang to prominence in recent months in the battle for NatSteel against a consortium that included Temasek.

The Straits Times sought a range of views after prominent eye surgeon Professor Arthur Lim suggested in a letter to ST's Forum page on Monday that Mr Oei's experience in taking over 200 state-owned enterprises (SOEs) in China could be relevant to Temasek.

The government investment arm is looking to offload non-core assets.

Endorsing Mr Oei's strong credentials, Dr John Chen, MP for Hong Kah GRC, said: 'Mr Oei spots opportunities early and moves fast. In business, anyone who is able to do that would be of tremendous help.'

And Singapore Indian Chamber of Commerce & Industry executive director George Abraham went one step further: 'An entrepreneur with a good nose for business would serve a useful purpose if he served on the boards of government-linked companies.'

In fact, he even suggested that 'senior people from GLCs could serve in an organisation like Mr Oei's'.

His reason? It may give some Singaporeans - who are frequently criticised for lacking in entrepreneurial flair - a ringside seat to how businessmen make decisions.

In his letter, Prof Lim suggested that Mr Oei's success in taking over more than 200 SOEs in the early 1990s, and helping them list in the United States could be applied here.

Yesterday, he added that government and established businesses 'should consider working with outstanding individuals even though their style may be different'.

And this point provoked no argument from Temasek.

Replying to a query from The Straits Times, it said: 'We are in constant touch with businessmen...including with Mr Oei and many others, to exchange views.'

But some business figures were less sure whether Mr Oei's success with the Chinese SOEs was relevant in the Singapore context.

NTUC FairPrice chairman S. Chandra Das, speaking in his personal capacity, said: 'He has a good track record. But comparing GLCs and the SOEs is like comparing apples and lemons. The latter were losing money or being inefficiently run so there was an opportunity for Mr Oei to see value in them.'

Lt-Gen (Ret) Ng Jui Ping, executive chairman of mainboard-listed Horizon Education & Technologies, said: 'Our GLCs are very well-managed and modern organisations with core competencies, with a good understanding of the free market.

'In private discussions with Mr Oei, you'll find that he has a very positive view of GLCs. He thinks they are competently managed'.

He added: 'Compared with China, our intention to divest GLCs is under a completely different set of circumstances. If divestment does not achieve fair market value, the ultimate losers are Singaporeans'.

Sources said that Mr Oei had great respect for GLCs.

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The article extracted from the Straits Times and posted above, was a follow-up from a letter written by Professor Arthur Lim (the reknown Singapore Eye Doctor), who wrote the following letter to the Straits Times Forum (Monday, 10 March 2003):

Why not seek Oei Hong Leong's views on GLCs?

I WRITE to support the opinion of Mr Long Yongtu, China's Vice-Minister of the Ministry of Foreign Trade and Economic Cooperation and the chief trade negotiator for China's entry into the WTO, on Mr Oei Hong Leong ('Oei Hong Leong's been misunderstood: Chinese official'; ST, March 6).

Mr Long summarised Mr Oei's investments in China, emphasising that his style of management had been new and had led to questions at the time. China now knows that his approach was right.

May I suggest that the Government of Singapore examine Mr Long's opinion as his financial assessments will be increasingly important internationally.

Mr Long emphasised Mr Oei's achievements in taking over more than 200 state-owned companies, and through mergers and acquisitions, developing these companies profitably. In addition, they were listed in the United States stock exchange.

Mr Oei's approach may be what Singapore needs in its move to divest its government-linked companies.

The Government has been talking about changes in Singapore's economic structure and have introduced new economic reforms as well as plans to privatise government-linked companies.

May I suggest that Singapore finance leaders consider seeking Mr Oei's opinion on whether he can take over the state-owned companies of Singapore, acquire and merge them if appropriate, and list them in New York.

Should he not be encouraged to see how he can take over government companies in Singapore and convert them into companies which can move ahead in the 21st century?

I have known Mr Oei for over 10 years. He is highly intelligent, shrewd, moves rapidly and has a style of doing things different from that of the ordinary person - not unlike top American entrepreneurs Henry Ford and Bill Gates.

Mr Oei is also very generous. Together with his wife, he has contributed to numerous charities.

Recently, he agreed to donate $100,000 to the development of the eye centre in Tianjin, and he has also agreed to donate funds to the St Andrew's School, an excellent school with the vast majority of its students coming from working-class families. The school needs the support of philanthropists.

Mr Oei has also discussed with me the possibility of setting up a foundation to help the less fortunate.

It is regrettable that people have called him either a 'rogue trader' or 'corporate raider' as it is clearly wrong to do so. Mr Oei has been a Singapore citizen for 20 years, although he was born in Indonesia.

Perhaps he should be invited to give public lectures on his views of how government-linked companies can be privatised effectively in the next five to 10 years.

His achievement in China was to transform 200 state-owned companies into profitable companies. I hope that he can do the same for Singapore.

Let us at least listen to him.

PROFESSOR ARTHUR LIM

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At the risk of my VIEWS being branded as "leftwing crackpot", as it continues with my criticism of our Government, I would like to state the purpose of posting the events that have come to past.

Much has been said of my postings being slanted to the extreme, with nothing good said of the Government.

However, those who have read my posts on Foreign Policies and on Defence Matters, I have held opposite views that are totally contrary to what I have posted on Domestic and Local Economic Issues.

During the supposed divestment exercise of NatSteel (which is one the many GLC), there was an awesome Board Room battles in the fight to win the ownership between a Government sanctioned group - headed by Personalities acceptable to the Government; and the antagonist bidder in the form of this Indonesian born Capitalist (now a Singapore Citizen).

The performance of the GLC has been much derided by many Fund Managers, for its lack lustre performance when compared to other Corporations in Japan, Europe and the USA.

The supposed talents that flow from the Universities, to the Defense Ministry, and to the Board Rooms, somehow could not provide the spark of performance desired.

It now seems that the continued divestment of more GLC's will only result in a "paper show" of disposal from the Government, to a group or groups of Government approved Owner-Bidders.

It seems that the limited talent pool, also has limited talent, and unable to run the GLC in its present form, and neither will it perfrom when divested to another group of approved talent that will be required to make informal reporting lines back to the Government.

The entire exercise is a charade, much like the Privatisation Plan of Public Transport, Taxis, Airlines, Telephone Companies, Newspapers, Hospitals, and too many to be named.

One can only ask if the Government is serious in its effort to privatise the GLC's and all other non-core business of the Government; or will there always be some other business hidden away to generate revenues.