Call it the Law of Unintended Consequences. In the past 12 months the Khoo family dealt twice with the Singapore government. And twice it caused major headaches for the parties involved.
The first was the so-called “Sunken Treasures” fiasco. In early 2005, the Khoo Foundation donated a large sum of money, said to be S$40 million ($25 mil), to finance Singapore’s purchase of some 9th century Tang Dynasty porcelain salvaged from a sunken ship off Indonesian waters. The collection was to form the centrepiece of a new maritime museum to be set up on the resort island of Sentosa.
Not surprisingly, the bounty sparked huge publicity, which in turn caught the eye of the Indonesian government. Under its law Indonesia was entitled to a half share of the salvaged treasure, but was only paid a few million Singapore dollars for its part.
Allegations of graft involving some highly placed personalities soon followed. President Susilo Bambang Yudhoyono, who came to power on a platform of clean government, promised full investigation. Jakarta took action against the salvager and demanded the return of the porcelain by Singapore.
Faced with a potentially escalating conflict with its giant neighbour, the Singapore government quickly chucked the Tang treasures away in a warehouse and tried to sort out the mess. That could take years.
In April this year, the Khoo family inked their second deal with the Singapore government. This time they agreed to sell their 11.55 per cent stake in Standard Chartered Bank to Temasek Holdings, the state investment arm, for $4 billion.
Knowing the purchase would trigger a deluge of queries, Temasek studiously worked out a long list of what might be called FATQs, or Frequently Asked Tough Questions—with stock answers—for its staff in the public affairs department.
The list spanned 13 pages and 59 questions, ranging from the firm’s ownership by the government (100 per cent, through the Ministry of Finance), to potential conflicts of interest, as well as Temasek’s aim in its current buying spree in the region.
On Shin Corp, in which Temasek bought a controlling stake from then Thai Prime Minister Thaksin Shinawatra, triggering the public outcry that led to the billionaire’s exit from the top job, Temasek’s stock answer was: “Our investment in Shin Corp reflected our confidence in Thailand’s long-term growth”.
Finally, on whether the appointment of Ho Ching, wife of Prime Minister Lee Hsien Loong, to the helm was politically motivated, the official word was: “We are not here to discuss politics since we are not politicians or a political organization. Our CEO is accountable to the board of directors, who is headed by an independent chairman just like any other commercial organisation.”
No one could accuse Temasek of being unprepared. Unfortunately, one of its staff accidentally leaked the entire list to a reporter, who in turn promptly put it on the Internet. Numerous copies of the prep sheet have since been circulating among banks, financial analysts and reporters globally.
Temasek took it badly. It sent out an email trying to recall the document. Staff had their knuckles rapped. Meanwhile, the market is waiting with abated breath to see whether the Khoo family will have a third dealing with the Singapore government, and whether third time is charm.