CORRUPTION IN SINGAPORE
Sim Thien Seng
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The Hotel Properties Limited episode that sparked off a political storm in
Singapore in 1996 has been buried alive by the PAP. But its ghost will
continue to haunt those involved.
It all started when the Stock Exchange of Singapore (SES) censured a
publicly listed property development company called Hotel Property Ltd (HPL)
for not seeking shareholders' approval for the sale of some of its
condominium developments at a discount price.
Dr Lee Suan Yew, Lee Kuan Yew's younger brother, was on the board of
directors of the company. He had purchased a unit in a condominium project
developed by HPL called Nassim Jade.
Shareholders of HPL had been grumbling about the way business was conducted
in the company especially when it came to dealings with the Lee family. Many
of the shareholders were waiting to buy units at the said project. When the
launch of the property never came to pass, the shareholders saw red and
demanded an explanation.
The stock exchange authorities quickly announced that HPL had breached
regulations. One day later, Lee Kuan Yew and his son, Lee Hsien Loong,
publicly revealed that they too had bought HPL condominiums. The story made
headlines and started tongues wagging. The story was then traced back to one
Ong Beng Seng, a property tycoon in Singapore, and Managing Director of HPL.
Ong had developed two condominium projects at the choiciest districts of
Singapore. One was the abovementioned Nassim Jade situated where opulent and
expansive embassies and mansions were located around Nassim Road. The other,
Scotts 28, was at the heart of Singapore's shopping and tourist district
Scotts Road. Both projects consisted of condominum
apartments valued at millions of dollars per unit before the property slump.
More red faces
It was also revealed that not only had Lee Kuan Yew, his brother and his son
purchased these apartments, they were offered substantial discounts to boot.
The apartments were due to be put on sale on the open market on 17 April
1995. Three days before the official launch, HPL conducted a "soft launch"
where a select group of potential customers were invited to have first go at
the apartments. This was not exactly an unheard of practice amongst property
developers. The problem was that because HPL was a publicly listed company,
it had shareholders to account to. Rules under the SES Manual Listing stated
that approval had to be sought for transactions involving "connected
persons" of the company involved and those persons' associates. The HPL did
not seek the permission of its shareholders. Suan Yew, Lee's brother, was a
non-executive director of the company.
At the soft launch, Madam Kwa Geok Choo, chose an apartment to buy. She was
quoted a price of $3,578,260 (or $1,583 per square foot) for the apartment.
This was a seven percent discount on the list price. Buyers at soft launches
are usually given only a five percent discount.
Later, Kwa Geok Choo contacted her son, Hsien Loong, and told him of the
Nassim Jade apartments upon which he called Aunty Pamelia Lee, wife of Uncle
Suan Yew, and said that he and his wife, Ho Ching, were interested in buying
the property as well. Aunty Pamelia then later came back to her nephew and
offered him an apartment for $3,645,100 a discount of 12 per cent or
$437,412 on the asking price. The Deputy Prime Minister accepted the offer.
This was not all. On the Scotts 28 condiminiums, similar offers and
purchases were made. Lee Kuan Yew and son bought two more units and paid
$2,791,500 and $2,776,400 respectively for them, each bagging a five percent
discount.
All in all, Lee Kuan Yew received from HPL a total of $416,252 whilst Lee
Junior got $643,185 in discounts. All the purchases amounted to more than
$10 million and were carried out without mortgages and loans.
It must be remembered that all this while, decisions of sales and the
discounts were carried out at the directors' level which involved Lee Suan
Yew. None of the shareholders nor the SES had the slightest idea of what was
going on.
And yet, this was just the tip of the iceberg.
It was later found out that Lee Kuan Yew's entire family was in on the
purchases. Daughter Lee Wei Ling, a medical doctor in a government hospital;
sister Lee Kim Mon; and his two other brothers Freddy and Dennis; Kwa Kim
Li, a niece of Lee; and Gloria Lee, Lee's sister in law, all bought the
condos at hefty discounts. Wei Ling bought two apartments at Nassim Jade and
was reported to have sold one off for a tidy profit. Again, all these
transactions were carried out without the approval of the shareholders of
HPL.
Shareholders' anger
News was leaking out about the Lee family's purchases of the HPL
condominiums and the shareholders were getting increasingly alarmed and
disgruntled. When pressure was brought to bear on the management, HPL
decided to belatedly seek the approval of its shareholders a full eleven
months later.
The SES had no choice but to issue a statement censuring HPL for the breach
of regulations. It noted that some of the discounts given to directors and
their relatives in respect of the Nassim Jade units were higher than those
given to non-related buyers and that the publicly listed companies have a
duty to obtain the best price so as to maximise the return to its
shareholders.
Unanswered questions
In spite of this, there was no investigation nor inquiry, merely a
censure for the company. Meanwhile, Lee Suan Yew quietly resigned as a
director with HPL.
To date, many questions remain unanswered:
1. Who made the decisions to sell the apartments at such discounts to the
Lee family?
2. Who authorised Pamelia Lee to sell the units to her relatives?
3. How many more relatives or friends, apart from those readily
identifiable, bought the units through such connections?
4. Why did Ong Beng Seng, owner of HPL, offer the units, and presumably the
discounts, to the Lee family?
5. Why was there no enquiry into Lee Suan Yew's involvement in affair?
Lee Kuan Yew has never failed to bring anyone under the glare of the CPIB if
there is a hint of corruption on his/her part. The late Teh Cheang Wan, then
Minister for National Development, was driven to commit suicide when it was
revealed that he had taken bribes for the construction of Housing and
Development Board flats. Another official Wee Toon Boon was also punished
severely for his role in a corruption case. Glenn Knight, a former public
prosecutor, was charged and convicted for corruption in a business deal.
During his case, Knight suffered a massive heart attack and was
incapacitated for a period.
In the HPL instance, there is more than ample evidence for the relevant
authorities to commence an investigation into Lee's family. When news broke
about the Whitewater affair concerning U.S. President Bill Clinton, an
independent counsel was set up to investigate the matter. No one was above
the law. At least, not in the U.S.
In Singapore, however, Lee Kuan Yew cannot even tolerate calls for
investigation into his family matters. Alas, he and his family are above our
Singapore law.
Perhaps, the PAP should stop telling the world that it is so
incorruptible.
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