Yet the state's mouth piece Straits Times is a public company whose ordinary shares can by acquired by foreigners. OK, I get it, there are restrictions in place to prevent management and ownership falling into foreign hands. Online news media too, can have management and ownership structures in place that ensures no foreign participation in its operation. So let's call a spade a spade, there are foreign investors in ST.
While the elites are fearful of foreigners brainwashing the low caste people living in the Mariana Trench of Singapore, should we, the low lives to them, worry that foreign interference can take place at the highest level of our society? Here's something to ponder.
The older generation may well remember the Pan El crisis in the 1980s, millennials may be too young to understand. Pan Electric group comprised of 3 companies listed on the Singapore Stock Exchange. At one point Pan El was on the verge of financial collapse, then along came a white knight in Tan Koon Swan who pumped in S$40m interest free loan to keep Pan El afloat.
Tan was then a prominent Malaysian politician and a shrewd corporate strategist. He was leader of the Malaysian Chinese Association, a component in the 3 race-based party coalition government of Malaysia. Tan's political star and MCA controlled corporations via Multi Purpose Holdings were so hot it threatened the Malay components in the ruling coalition. His ascendancy was viewed by some as destabilising the racial politics of the country.
Using his proxies Tan Kok Liang and Peter Tham, who were directors in Pan El, Tan then went on to play up Pan El group shares through a web of forward contracts, selling to the public, and intra-group arrangements. When shares were purchased in SGX, they had to be paid for in 7 days time. Forward contracts was the game played by selling the shares before settlement date ie a buyer sold the shares before he had made payment and taken delivery. That meant a share can be turned around several times which left the system exposed as in the back end, the amount of outstanding settlement was several times the number of scrips in the market and a string of buyers with ownership not yet legally transferred. If the musical chair stops, it will be a mess.
To facilitate the game, Tan worked through two dedicated brokers. One was Associated Asian Securities (of which Peter Tham was also a director) and Alpha Securities (ran by Goh Kian Chee, son of Dy Prime Minster Goh Kheng Swee).
The musical chair stopped when Pan El defaulted on a S$75m loan. All hell broke loose and SGX was forced to close the exchange for 3 days. In 1986 Tan faced 15 charges. The prosecutor was Singapore crime buster PP Glenn Knight, an upstart young civil servant very much in Lee Kuan Yew's sight.
Initially, bail was set at S$20m, which was a world record at the time. As additional charges were slapped on Tan, a further S$20m was imposed. Tan posted bail and was back in Malaysia where he was assured by Prime Minister Mahathir that it won't be a major problem and he should go to Singapore to stand trial.
Market perception was that Tan will get away with some fine. He was after all, not even a director of Pan El. Singapore securities legislation and the Companies Act then were not airtight. As prominent Malaysian politician Lim Kit Siang pointed out, the defence lawyer never protested at the extremely excessive S$40m bond, an indication that some agreement had been reached. That had credibility as as the PP proceeded with only a single charge of abetment of criminal breach of trust, the rest were taken into consideration. Tan pleaded guilty and waited for the sentencing.
Lai Kew Chai (J) gave Tan a shocker and sentenced him to 2 years in jail and S$500,000 fine.
At the time, Malaysia was in the process of calling for an election, thus colouring a political background that was extremely sensitive. The timing of the trial had implications for the election date. The Malay component in the ruling coalition, UMNO, wanted Tan out of the picture, whilst the powerful MCA of course wanted Tan unrestrained. Singapore thus had a difficult task of maintaining judicial sovereignty, whilst the government obviously had some foreign diplomacy considerations. To deny that such a situation never existed is to be naive. The reality was Singapore found itself in an accidental position to influence Malaysian election.
Around the time, Mahathir made a trip to Singapore. Speculation was ripe that Singapore did its northern neighbour a big favour. Tan was in prison, and out of Malaysia politics, something that Mahathir could never have done himself.
Was there an ignominious sentence to placate Malaysia. A small sacrifice of principles which pleased a noisy neighbour, perhaps for some quid pro quo, and at the same time, demonstrating Singapore's judicial sovereignty in the jailing of a top Malaysian politician. In other words, was there foreign interference in our domestic affairs?
A possible answer to this may be found in the book "The Prosecutor" which Glenn Knight wrote in 2012. In it he covered several high profile cases where he was prosecutor. On Pan El, he made reference to CJ Yong Pung How's comments in the 1996 case of Cheam Tat Pang vs PP. Based on that reading of the law, Knight's conclusion was the charge against Tan was "technically wrong". In other words, Tan was wrongly charged. (That does not mean he committed no crime).
Knight's revelation was a big puzzle. He himself was charged in 1991 for some minor offence and was disbarred in 1994. He was out of favour, the reasons are top secret to this day. Knight spent years in the doldrums until he was given a reprieve and re-instated to the bar in 2007. Having had the powerful elites going for his throat once, what was Knight's motivation to denounce a misstep by the judiciary? My point in bringing this up is to tantalise the possibility that it's a coded way for a participant in the Pan El trial to suggest there was something not quite right. Could it be an interference with the court. A foreign interference?
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Addendum:
Tan Kok Liang and Peter Tam went to jail. Goh Chee Kian was never charged.
The 'technical error' Knight referred to has to do with the interpretation of one important provision section 157(1) of the Companies Act which prescribes that a director shall at all times act honestly and use reasonable diligence in the discharge of the duties of his office.
CJ Yong Pung How's comment was in the problem of measuring honesty -- whether subjectively or objectively. Whole books can be written on such legal semantics. Indeed, the Attorney General's Office objected to Knight's reference to Pan El's 'technical mistake' with a press release. You can read it here.
I don't understand the high falutin legal arguments. My simple mind asks only this - why the charge under 157(1) when Tan Koon Swan was never a director of Pan El in the first place?
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