Lee Hsien Yang’s Investment Prowess Induces A Strong Sense of Deja Vu
This morning I was greeted by the heartwarming news that another Singaporean had become a billionaire, this time the CEO and founder of Razer Inc., which makes video gaming accessories. According to Bloomberg, “Tan, a Singapore entrepreneur who’s also Razer’s chief executive officer, owns about 42 percent of the San Francisco-based maker of video gaming accessories such as mice and headsets, together with his family. Razer is offering more than a tenth of the company to raise at least $400 million in a Hong Kong IPO, giving Tan a net worth of more than $1.2 billion, according to the Bloomberg Billionaires Index.”
This is a great Singaporean success story despite the fact that the company is based in the US, presumably manufactures in China and is listing its shares in HK. The company was backed by Temasek which as everyone knows is headed by the PM’s wife, Ho Ching. It has also raised US$20 million from GIC. Some of the other shareholders are the Hartono brothers, Indonesia’s richest men, Celine Tang (or Huaiden Chen), wife of Gordon Tang, and MD of Singapore-listed Singhaiyi, Loi Keong Kuong, a Macau casino owner who pops up in the Panama Papers and a Chinese property company, Kingkey. The Tangs have donated money to many American politicians including Jeb Bush’s failed campaign for the Republican nomination and have his brother, Neil, as a board member of both Singhaiyi and their unlisted property company, American Pacific International Capital. I remember meeting Neil Bush briefly in London many years ago but that is another story. You can read more about the Tangs in The Intercept. Fascinatingly the article describes how they tried to buy off the journalist by offering a little “gift” of $250,000 to stop her reporting on the rumours that Tang had been investigated for smuggling in China. Fortunately in HK controlling the flow of information is not yet as easy as in Singapore where there is no independent media and all journalists work for state media or are indirectly controlled through MDA licensing requirements.
However my focus was not on the Tangs or the other shareholders but on the revelation that Lee Hsien Yang had been an early investor in Razer. AsiaOne calls him simply a “venture capitalist” but Bloomberg more accurately describes him as the younger brother of Singapore’s PM. I am curious as to how he got to be an early investor since investing in hot startups is usually very difficult. Certainly it is not something that is available to the general public. The founders of companies like Facebook, Google and Uber (which has not gone public yet) vet very carefully who they allow to be their initial investors very carefully and would normally only take money from those who were able to provide significant connections which would bring in additional investors or cement key relationships. This would normally exclude individuals unless they were employees and this was a way of rewarding them.
So I am curious as to what Lee Hsien Yang brought to the table that allowed him to make probably many times his initial investment, maybe as much as hundred times. We are completely in the dark as to how much money he made but assume the IPO price is an enormous uplift. Was he offered a chance to invest because he is a member of Singapore’s ruling dynasty, the Familee? Was it a way of getting Temasek, the sovereign wealth fund headed by his sister-in-law and PM’s wife, Ho Ching, to invest and did he also bring in GIC as a cornerstone investor? Did Ho Ching recuse herself from the decision to invest because of the conflict of interest? Did other members of the Familee get to invest at preferential share prices, maybe even his brother the PM? ( Hsien Yang’s investment took place before the family rift). Anyone who remembers the Nassim Jade scandal in the 90s, when members of the Lee family, including LKY, Hsien Loong and Hsien Yang, helped themselves to units in a prime condominium development at preferential prices before anyone else will experience a strong sense of deja vu. How many other lucrative insider investment opportunities have the Familee been able to invest in because of their control of the enormous purses of our sovereign wealth funds, financed by your and my taxes and CPF monies? In most democracies revelations of such serious conflicts of interest and legalised corruption would spark an uproar.
The list of questions to which we are unlikely to get any answers any time soon is endless. However one thing is certain. As my father said about LKY back in the 1972 GE, after LKY had belittled the Opposition as men who could not manage their financial affairs, the Familee manage their affairs beautifully when it comes to making money. It is always easier to make money if you have inside knowledge and are able to invest before anyone else.