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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 choicest districts of Singapore. One was the above-mentioned 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 condominium 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 Auntie Pamelia Lee, wife of Uncle Suan Yew, and said that he and his wife, Ho Ching, were interested in buying the property as well. Auntie 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 condominiums, 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?
19 Apr `05, 10:56AM
As the story began to build up and as more revelations came to light, the pressure and embarrassment to Lee Kuan Yew mounted.
Dr Richard Hu, the Minister for Finance, then announced that he had recommended to Prime Minister Goh Chok Tong that Lee Kuan Yew and his son, Lee Hsien Loong, consider giving back the money they had received in the discounts. Sensing that this might ease public disquiet, the Lees agreed. The move backfired. People were now asking why were the Lees returning the money unless they felt that they had done something wrong. To make matters worse, Goh Chok Tong refused to accept the money and instructed the Accountant-General to return it back to the Lees. Talk was that Goh did not want the Government to be involved with the money which might bring complications later on.
Goh knew he had to do something about the situation if he was going to remain untarnished. He then appointed the Finance Minister Richard Hu and Monetary Authority of Singapore Deputy Managing Director Koh Beng Seng to investigate the matter.
Despite the fact that Hu and Koh were not the most independent and appropriate persons to look into the affair, the "investigation" went ahead.
It was then that Goh Chok Tong announced that a parliamentary hearing would be conducted for the matter to be debated "openly." At the same time, Goh announced that if anyone made any inappropriate comments about Lee Kuan Yew's purchases, in or out of Parliament, Lee would not hesitate to sue. So much for an open debate.
The debate that never was
Just before the hearing took place however, HPL owner Ong Beng Seng was reportedly forced by Lee Kuan Yew to call for a press conference. He also defended the transactions saying that it was good advertisement for HPL to have Lee Kuan Yew as a buyer.
If that was the case, why then did all the rest of Lee's family and relatives also buy into the properties with substantial discounts? Was there any marketing value to this? Why was there a need to offer discounts to the Lee family when shareholders were straining to buy the units?
In light of the property boom at that time, it would have been a silly move to sell units at less than maximum price. Did he know that Lee Suan Yew was offering units at discounts to his relatives? Who approved these sales? Why were the shareholders' permission not sought? It would seem that Ong would be asked to answer these questions. But Ong invited only Singapore's local media to his press conference so that troublesome questions by the foreign media could be avoided.
Then came the parliamentary debate. Goh Chok Tong got up and proclaimed that there was no impropriety on the part of Lee Kuan Yew and Lee Hsien Loong in their purchase of the condos. Richard Hu echoed Goh's sentiments and exonerated the Lees of any wrong doing.
During the parliament session, Lee started going on and on about how much his wife was worth ($20 million in his estimate), how a hawker selling char kuay teow would upon seeing him give two eggs instead of one, and how tailors would be falling head over heels to try to clothe him. He said almost everything except answer the real questions about the involvement of his whole family in the purchases and the breach of regulations by HPL. He so intimidated the four opposition members of parliament that none of them dared ask any question.
No questions allowed
At about the same time, a Chinese weekly magazine called Yazhou Zhoukan (Asiaweek) interviewed Tang Liang Hong (who later joined the Workers Party to contest in the 1997 elections) for his comments on the affair. Tang questioned, "Why wasn't this matter handed over to the professional body like the CAD [Commercial Affairs Department] or the CPIB [Corrupt Practices Investigation Bureau]? They are government departments not only rich in experience, but also well-known for being iron-faced with selfishness [a Chinese phrase meaning firm and impartial]. They would be more detached and their reports would have been more convincing to the people. Koh Beng Seng and Finance Minister Richard Hu are after all not experts in this field."
The result: both Kuan Yew and Hsien Loong sued Tang for making the statement.
But Tang had made a significant observation. Richard Hu had not submitted a written report as to the scope or the findings of their investigation despite the gravity of the matter. Both he and his assistant Koh Beng Seng failed to report the following:
* Why father and son had not checked the size of their discounts, as they claimed, despite the fact that they had bought the properties for investment purposes,
* Why Lee Hsien Loong said he did not know of the size of the discounts he received depite the fact that he had in his possession at the time he bought the unit a copy of the price list of Nassim Jade,
* Why they did not obtain information from Lee Suan Yew or his wife Pamelia as to what their roles were in the sales of the units,
* Why they did not investigate into the circumstances of the purchases of the units by Lee Kuan Yew's extended family,
* Why the HPL had not sought the approval of the shareholders to sale the apartments to the Lee family. This was despite the fact that the SES had censured HPL for failing to do just that.
One country, two laws
Lee Kuan Yew has never failed to brng 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.
