News reports today in the State Times and other Government media said that at least six former executives of Keppel Corp have been arrested by CPIB in connection with the Brazil bribery scandal. To recap, in December it was announced that Keppel Offshore and Marine, a 100% owned subsidiary of Keppel Corp, had reached a deferred prosecution agreement with the US Justice Department under which Keppel O & M agreed to pay US$422 million to settle charges. I wrote about it at the time (A Shocking Window Into The Institutional Corruption That Pervades Singapore Inc)

According to today’s reports, those arrested included Tay Kim Hock, the former chief executive and president of Keppel FELS Marine, a wholly owned subsidiary of Keppel O & M. The reports did not identify any of the other executives.

Keppel O & M is the most important division in Keppel Corp, accounting in previous years for close to 50% of its turnover. Keppel Corp is still an associated company of Temasek despite Temasek reducing its shareholding since listing to the current level of just above 20%. Clearly Temasek and the PAP have a great deal of influence in the selection of top management and the Board of Directors. As I said in my article, Lee Boon Yang, a former PAP Minister, is still Chairman of Keppel Corp as well as of Singapore Press Holdings. Like most companies in Singapore the influence of the PAP is much greater than the actual shareholding would suggest.

It is inconceivable that internal audit at Keppel did not notice US$55 million payments to Keppel O & M’s agent in Brazil and that the Directors, who include former PAP MP and SC Alvin Yeo, were not aware of the fact that corrupt payments were being used to win contracts. Equally, it is highly unlikely that Temasek’s senior management, including the CEO appointed by her husband LHL, did not have knowledge of this, given that other group companies have been engaging in similar behaviour. Either that or they are incompetent and should be removed.

Yet it is clear from the reports that none of the senior management of Keppel or Temasek have been arrested. We can expect only relatively low ranking executives to be the scapegoats. Clearly being a PAP MP or former minister or the wife of the PM gives you a Teflon coating that makes you untouchable. As we know from experience, no ethical, moral or legal considerations stand in the way of our Government’s willingness to do business with criminal and venal individuals and governments when a few dollars are involved. No one can doubt that the tolerance of corruption extends to transactions much closer to home. If PM Lee were serious about dispelling the unmistakable odour of corruption that pervades Singapore Inc., he could start by releasing details of his wife’s remuneration structure and the assets accumulated by his mum and dad and other members of the Familee.

Published by kjeyaretnam

I'm a Singaporean economist who became an opposition activist. I blog to provide an alternative to the porkies that the Pinkies tell. It just so happens that my alternative is the truth. That's why I've never been sued in any civil or criminal court no matter how hard hitting my criticism. I'm quoted and interviewed and asked to speak across the world but largely censored in Singapore in an effort to silence my political opinions. The left hate me because they think I split their vote and because I eschew their outmoded economic models. Models that don't work. The Right and the Conservatives hate me because I'm a liberal. I'm not sure what the middle think of me. I don't think there are more than a handful of people in the middle, here in Singapore. I'm a Singaporean born and bred, dual heritage, my parents Singaporean established here before the State of Singapore was created. I'm not Eurasian. I read economics at Cambridge and could be broadly described as from the Keynesian school but I believe in interventions. I was formerly a successful hedge fund manager. After economics and politics my greatest interests are history, film and Makan. I run but I run so I can eat like a Singaporean. View all posts by kjeyaretnam