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Staying Clean Not A Simple Matter in Some Countries


orwellI read with amusement the letter written to the State Times by one Francis Cheng arguing that Singapore MNCs should be allowed to pay bribes as otherwise foreign competitors will gain an unfair advantage. Since state media gives it such prominence we can assume that it reflects the thinking of the PAP Government. Certainly Singaporean GLCs have been discovered paying bribes with such frequency that it is clear that it must be official policy.

I wrote last week about how Keppel’s chairman and former PAP Minister, Lee Boon Yang, must have been aware of such large payments to foreign agents to bribe officials since they would have been factored in to the contract cost (A Shocking Window Into The Institutional Corruption That Pervades Singapore Inc). The amounts were also easy to identify since they were a percentage of the contract.

Neither is it possible that the PM’s wife, Ho Ching, was unaware of the practice since at least three Temasek companies have been identified as involved, Keppel, Sembcorp Marine and ST Marine. Which means that the PM almost certainly knew and quite possibly other members of the Cabinet including the Finance Minister.

Never mind the fact that paying  bribes is illegal under the US Foreign Corrupt Practice Act (FCPA) as well as most of the EU member states, the UK (the Bribery Act 2010) and many other advanced countries. Interestingly the FCPA requires non-US companies that have ADRs (American Depositary Receipts) to “have accounting and other internal controls in place to prevent and detect bribery and to accurately record and manage an organisation’s assets consistent with management’s directives“. Keppel’s ADRs trade under the ticker KPELY.

But let’s take Cheng’s argument to its extreme. Why stop at bribery? Surely Singapore’s GLCs should be allowed to engage in any form of illegal behaviour to gain a competitive advantage over their competitors. Why not make use of slave or prison labour? After all we already allow exploitation of foreign workers in Singapore with no minimum wage which undermines our own workers.  The justification for this is that otherwise our companies would be uncompetitive. Heading the list of those exploiting foreign labour are the same GLCs involved in the bribery scandal, i.e. Keppel, Sembcorp and ST Marine. Let’s wreck the environment in our poorer neighbours even where this redounds on Singaporeans as when it was discovered that many of the companies involved in the burning in Sumatra that created the haze were owned by Temasek.

Of course the same argument was used by LKY to justify paying huge salaries to himself and his ministers and to allow his family to make money on the side through their connections, as Mrs Lee did through her monopoly on HDB conveyancing. There was nothing wrong because in other poorer countries it was the norm for leaders to take bribes. If Singapore was to attract and retain talented leadership then the Familee and their cronies and ministers must be allowed to make millions. Never mind that the input from so-called leadership was fairly minimal compared to Singapore’s strategic position and the boom in world trade.

LHL continues the same practices. In order for Singapore to benefit from the fantastic stock-picking talent of his wife she must be allowed to make undoubtedly hundreds of millions through secret remuneration schemes. Otherwise other companies could lure her away and we could lose our competitive advantage. I presume Temasek’s internal controls are good enough for the company to know what Ho Ching is getting paid but given what happened at Keppel perhaps it would be unwise to presume anything.

No, staying clean is  not a simple matter and especially in Singapore.

 

3 Comments »

  1. If the government does its jobs, properly, then there is hardly any need for anyone in the government to keep asking people to trust the government.

    The current govt is on overpaid and underperforming bunch with no ideals and no ideas, as they fumble their ways through governing.These pampered MPs, many of whom have not undergone any baptism of fire (including some potential future PM candidates), simply are not competent. Yet, the incredible thing is that they believe they are competent! So they invoke the spectre of LKY which shows how lacking in intelligence they can be. Or they just conveniently push the blame to someone else or redefine the criteria to define their competencies (how many MRT breakdowns).

    The sad thing is that they will continue to win election, because they know how to push the necessary buttons to get themselves elected. They have more than half of century of perfecting that. Democracy is rarely a battle of contesting ideas for a better country. It is often reduced to a matter of the guts and the colon, which will produce all the shits.

    But the worst thing is that they will continue to win election, because the people are held hostage to the consequences of the PAP losing their elections: will they lose the value of their houses, their jobs and a better future for their children?

    A comparison between the ruling hegemon and the “co-driver” is also not flattering, since the WP really screwed it up big-time by simplistically thinking the PAP will allow them a cosy co-driving seat and acting like back-benchers. Like the voters and Faust, the WP have traded their souls to the Devil in exchange for the material, not realising the Devil can lay claim to their souls anytime.

    Like

  2. Regarding Keppel’s ADR, it may depend on whether it’s sponsored or not

    If I remember correctly, non-sponsored ADRs do not have to adhere to the SEC’s rule since the company itself did not create the ADR

    Like

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