Singapore MM Lee says US economy down but not out

Singapore MM Lee says US economy down but not out

By Wong Siew Ying,

SINGAPORE: It is a grave mistake to think that the US economy is on the decline, said Singapore’s Minister Mentor Lee Kuan Yew during a dialogue session at the annual Forbes Global CEO Conference on Wednesday.

In fact, Mr Lee believes that the US will continue to be an economic power in the next 30 to 50 years as history bears testament to how the country will rise above its weakening economy.

During the hour-long session, the minister mentor said America has the ability to revamp its system. In the past, it down-sized or took advantage of IT to get its economy up again.

Moreover, the US does not have the social security system of the Europeans, so it will still be a leading economy in the decades ahead, even though it would not be the only power.

It is hoped that America will continue to support free trade and minimise protectionism, with a new administration due in the White House later this year.

“Whether it’s Obama or McCain, it may take longer with one than the other. McCain is still very courageously saying free trade, he believes in it. The Obama manifesto at the convention when they met the Asian group was more nuanced,” Mr Lee said.

On China, the minister mentor said the recent Beijing Olympic Games has demonstrated the country’s potential and it will be able to catch up with other developed nations in the next 30 to 50 years.

He said China is closely watching economies like Taiwan, Singapore and Hong Kong to see what makes them tick, and it would be a remarkable achievement if the Chinese could get 500 million people educated, with a per capita standard of living of half of that in the US in 50 years.

With the surge of China and India, smaller countries within the 10-member ASEAN will have no choice but to work at integration.

Mr Lee said: “Unless we combine our markets - 558 million people with less purchasing power in total against China and just about equal to India - how are we going to compete against them?

“I think the realisation of that is going to bring us together. The economic facts of life will force us to pull together or hang separately. And that’s the choice.”

ASEAN aims for economic integration by 2015.
- CNA/so

 
Source : Channel Newsasia - 11 Sept 2008

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Singapore keeps ranking as most business-friendly place in the world

Singapore keeps ranking as most business-friendly place in the world
 

Skyscrapers in Singapore’s central business district
   
  

WASHINGTON: Singapore has kept its top ranking for the third year in a row as the easiest place in the world to do business, the World Bank said in a report Wednesday.

The Asian city-state edged out New Zealand and the United States in the “Doing Business 2009″ ranking by the World Bank. New Zealand came in second place ahead of the United States.

Filling out the rest of the list of the 10 easiest business environments were Hong Kong, Denmark, Britain, Ireland, Canada, Australia and Norway.

The report, examining regulations and how they affect businesses, ranks 181 economies on the overall ease of doing business in the countries.

The top eight countries were in the same order as the 2008 list, but Australia and Norway traded places, according to the report produced by the World Bank and its private-sector financial development arm, the International Finance Corporation (IFC).

At the bottom of the list was the Democratic Republic of Congo.

“Economies need rules that are efficient, easy to use, and accessible to all who use them,” said Michael Klein, World Bank/IFC vice president for financial development.

“Otherwise, businesses are trapped in the unregulated, informal economy, where they have less access to finance and hire fewer workers, and where workers lack the protection of labour law.”

Singapore ranked first on international trade and employing workers, and second on protecting investors and closing a business.

New Zealand afforded the greatest ease in protecting investors and starting a business, while the United States led in making it easy to hire workers.

Hong Kong was the only other Asian economy besides Singapore to make it to the top 10. The SAR was ranked fourth.

But competition is nipping at Singapore’s heels.

“In terms of how strong is Singapore’s position at number 1, well, it’s relative. I think New Zealand is pretty close. I think one big lesson that we see is that if any country stops reforming, … they will lose their position,” said Sylvia Solf, programme manager, Doing Business Project.

Each country was ranked based on 10 indicators, such as the ease of starting a business, trading across borders and protecting investors.

While Singapore was ranked highly in most of the categories, it showed room for improvement in areas such as ease of registering property and enforcing contracts.

Analysts said there are more challenges ahead as the global economy continues to head south.

“Managing cost in a high inflation environment is critical for businesses, so it’s a question of managing manpower cost, property rental cost as well as some other regulatory cost,” said Selena Ling, head of Treasury Research & Strategy, OCBC Bank.

She said attracting and retaining talents is also essential to keep Singapore competitive against other Asian rivals like China.

Among the world’s largest economies, Japan held steady at number 12 from last year, while Germany fell to 25 from 20. China rose to 83 from 90 and Britain was unchanged in the sixth position. France moved up one spot to number 31.

Among rapidly growing emerging economies, Russia fell nine ranks to 120th place and India slipped two notches to number 122.

Saudi Arabia was the best performer in the Middle East, moving up to the 16th spot from 24, ahead of Bahrain, United Arab Emirates and Kuwait.

The report also looked at countries’ progress in making regulatory reforms that enhance business operations. Azerbaijan was this year’s leading reformer, jumping to 33 on the list from 96 last year, followed by Albania, at 86 from 135, and Kyrgyzstan, at 68 from 99.

“Among the large emerging markets, China led the way. Reforms there make it easier to access credit, pay taxes, and enforce contracts,” the World Bank said.

The 185-nation development lender also highlighted Africa’s “record year for regulatory reforms”, saying 28 countries had completed 58 reforms in the criteria studied.

Still, nine of the 10 most difficult countries to do business were in Africa, with Venezuela the sole exception.

In descending order, the worst were Niger, Eritrea, Venezuela, Chad, Sao Tome and Principe, Burundi, Republic of Congo, Guinea-Bissau, Central African Republic and Democratic Republic of Congo.

- AFP/CNA/yb/ls

 
Source : Channel Newsasia - 11 Sept 2008

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Malaysia UMNO man and that ‘immigrants’ remark suspended

Malaysia UMNO man and that ‘immigrants’ remark suspended
 
Ahmad Ismail loses all party posts on top of three-year suspension 

By Hazlin Hassan, Malaysia Correspondent 
  

KUALA LUMPUR: Umno official Ahmad Ismail was yesterday suspended for three years and stripped of all party posts over his inflammatory remarks that caused outrage in the Chinese community.
Prime Minister Abdullah Badawi, in disclosing the punishment meted out to the defiant official, said racial ties were deteriorating and warned that the government would invoke the tough Internal Security Act law against anyone who attempted to stoke racial tensions.

He was speaking after chairing a special meeting of Umno’s decision-making Supreme Council, a day after chiefs of his Barisan Nasional (BN) coalition called for stern action against Datuk Ahmad.

‘The Supreme Council has found that Ahmad Ismail’s statement and actions have caused much anger and protest from the BN component parties,’ Datuk Seri Abdullah told a news conference.

‘We have decided that he will be suspended from the party for three years.’

Mr Ahmad would lose all official posts but remain a party member. This means he has to give up his post of division chief for the Bukit Bendera area in Penang.

He caused the furore when, during a by-election speech in Penang last month, he referred to the Chinese as ’squatters’ and ‘immigrants’.

Yesterday, he called a news conference in Kuala Lumpur and repeated that he would not apologise for his remarks unlike Deputy Prime Minister Najib Razak, who did so on behalf of Umno.

Mr Ahmad crowed to cheers from supporters: ‘I have a long time - three years to rebuild my home in Umno…I promise that I will make a comeback in Umno.’

He had earlier stopped 10 busloads of his supporters from coming to Kuala Lumpur to protest against the Supreme Council, which met for three hours to decide his fate.

Still, 15 protesters lined up at the entrance of the Umno headquarters chanting: ‘Hidup Melayu! (Long live the Malays).’ They carried banners that called on the Supreme Council to ‘defend the honour of Ahmad Ismail’.

Gerakan acting president Koh Tsu Koon, whose picture was torn by a supporter of Mr Ahmad on Monday, said the punishment was ‘a step in the right direction’.

‘We hope this will serve as a deterrent against similarly irresponsible and insensitive actions,’ he said in a statement.

Malaysian Chinese Association (MCA) president Ong Ka Ting said the party welcomed Umno’s decision, and the incident should serve as a lesson to all politicians.

But the deputy chairman of the MCA in Penang, Mr Lau Chiek Tuan, said Mr Ahmad got off lightly. ‘He is only suspended from his party. He still owes the Chinese people an apology.’

PM Abdullah said other BN component parties should take similar action against any member who tried to stir tensions. He said the Cabinet, at its weekly meeting yesterday, discussed the racial situation that was showing signs of strain.

Home Minister Syed Hamid Albar urged the media to exercise self-restraint. He told newspaper editors at a special briefing on Tuesday that it is the duty of everyone to help the nation steer away from the current situation.

Deputy police chief Ismail Omar has also warned those exploiting the situation with racially sensitive blog postings and SMSes to be careful, saying the police would not hesitate to take action against them.

 
Source : Straits Times - 11 Sept 2008

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Malaysia An Anwar flip-flop?

Malaysia An Anwar flip-flop? 

He sends mixed signals on whether his plan to topple govt is on track 

By Hazlin Hassan, Malaysia Correspondent 
  
Anwar surrounded by reporters yesterday as he turned up at the Jalan Duta court complex for his sodomy case. — PHOTO: THE STAR/ASIA NEWS NETWORK

KUALA LUMPUR: Opposition leader Anwar Ibrahim yesterday gave conflicting signals about his planned move to topple the government as he appeared in court for a hearing on a sodomy case.
He was initially quoted as saying that his self-declared Sept 16 deadline could be postponed but then changed tack after appearing in court, telling reporters it was ‘very much’ on track.
The hearing itself turned into an anti-climax, with proceedings adjourned to Sept 24 to allow the defence to argue against the prosecution’s move to transfer the case from the Sessions Court to the High Court where, according to Anwar’s supporters, it would be easier to manipulate.

Anwar was charged last month after one of his former aides, Mr Saiful Bukhari Azlan, 23, lodged a police report, alleging that he had been sexually assaulted by the opposition leader in an upscale condominium in Kuala Lumpur. Anwar has denounced the charge as a conspiracy to thwart his plans to take over the government.

The transfer order was signed by Attorney-General Abdul Gani Patail, whom Anwar claims fabricated evidence in a previous sodomy trial in 1998 shortly after he was sacked as deputy prime minister. Anwar was convicted on the charge but this was later overturned on appeal.

The defence yesterday argued that Tan Sri Abdul Gani should not be involved in the current case because Anwar had filed a police report against him and police chief Musa Hassan in July for allegedly tampering with evidence in connection with the previous trial.

Anwar’s lawyers also argued that the Prime Minister had decided that both the Attorney-General and the police chief should take not part in the latest case.

‘This is a trial by ambush. How could they allow a person who has a personal bias, enmity and hatred towards me to make a decision at my expense?’ Anwar told reporters after the hearing.

Sessions Court judge Komathy Suppiah made the rare decision of adjourning the hearing for two weeks to allow the defence time to research its case against the transfer order.

Instructions from the Attorney-General are not usually disputed, and government prosecutor Yusof Zainal Abidin objected, saying it was ‘a public interest case’.

Defence counsel Sulaiman Abdullah argued there was no need to move the case, pointing out that Judge Suppiah, with 26 years of experience on the Bench, was capable of presiding over the trial.

Talk about Anwar’s bail being revoked yesterday also proved unfounded. The issue was not raised in court, which means he will remain free on the personal bond granted when he was charged on Aug 7.

Security measures for the hearing were almost unprecedented, with dozens of police and water cannons on standby at the court complex. Journalists had to register at three different places and go through a metal detection scan before being allowed to enter the courtroom.

Anwar was greeted by 100 opposition supporters when he arrived at the Jalan Duta court complex, accompanied by his wife Wan Azizah Wan Ismail and two daughters.

The opposition leader later told reporters that he was on target for the Sept 16 takeover of the federal government through the defections of 30 Barisan Nasional (BN) backbenchers. This is despite the BN sending the bulk of its backbenchers on an overseas junket to Taiwan until next week.

Anwar acknowledged there were ‘technical problems’ but said he would deal with it.

‘If need be, I’ll fly to Taiwan,’ he said.

‘Hopefully in this blessed month, Malaysians will achieve freedom and fuel prices will go down,’ he said, referring to Ramadan and his pledge to lower fuel prices if he comes into power.

Anwar was speaking after The Star yesterday quoted him as saying that the deadline may not be met.

‘We definitely have sufficient numbers (of MPs), but we would have to wait first as they are currently ‘enjoying Ramadan’ in Taiwan…the date can be postponed even though our target was Sept 16 previously.’

The deadline is turning out to be a high-stakes game, in more ways than one.

Social science lecturer Sivamurugan Pandian from Universiti Sains Malaysia said: ‘Personally, I don’t think he has the numbers. Is it a bluff? People will question his credibility if Sept 16 comes and goes. Is it just a tactic to weaken Umno? Or his personal agenda?

‘Even if he has the numbers, it might not be a strong and stable government; it might be fragile. There will be political instability, as BN will never allow them to simply take over,’ he told The Straits Times.
‘MAYBE’ ON TUESDAY…

‘We definitely have sufficient numbers (of MPs), but we would have to wait first as they are currently ‘enjoying Ramadan’ in Taiwan…the date can be postponed even though our target was Sept 16 previously.’

Anwar, as quoted by The Star

…’DEFINITELY’ YESTERDAY

‘We’re working on it. There are technical problems because (the lawmakers) have been shipped away…God willing, it will happen. If need be, I’ll fly to Taiwan.’

Anwar yesterday after his court hearing

Source : Straits Times - 11 Sept 2008

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TID wins Singapore URA condo-site tender with $84m bid

TID wins Singapore URA condo-site tender with $84m bid
THE Urban Redevelopment Authority (URA) yesterday awarded a 99-year leasehold condo site next to Tanah Merah MRT Station to top bidder TID, just a day after the tender closed on Tuesday.
This contrasts with the couple of weeks or more that URA has taken to deliberate on awarding earlier sites, which fetched bids below expectations.

TID’s $84 million winning bid reflects a land price of about $282 per square foot (psf) of potential gross floor area, within the $250-$300 psf per plot ratio range market watchers predicted for the confirmed list site when it was launched in mid-July.

TID is a joint venture between Singapore’s Hong Leong Group and Japan’s Mitsui Fudosan.The tender drew seven bids.

 
Source : Business Times - 11 Sept 2008

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More PRs snapping up Singapore private homes

More PRs snapping up Singapore private homes

Their share in pool of foreign buyers is rising after turmoil in global markets
By KALPANA RASHIWALA
THE proportion of permanent residents (PRs) in the pool of foreign buyers of private homes here has been rising since the third quarter of 2007, when the US sub-prime crisis struck, according to DTZ’s analysis of caveats data from Urban Redevelopment Authority’s Realis system.
 
Major attraction: Projects that received more foreign interest in Q2 include The Lakeshore in Jurong
Correspondingly, non-PR foreigners have seen their share of this pool decline from 54 per cent in Q3 2007 to 46 per cent in Q2 this year.

One explanation could be that PRs are more likely to buy Singapore homes for their own occupation whereas non-PR foreigners may be more inclined to buy for investment and would hence tend to become increasingly cautious amidst the volatile global financial markets.

DTZ senior director (research) Chua Chor Hoon expects the trend to continue in the coming months given the global economic uncertainty.

The property consultancy’s analysis showed that PRs made up 54 per cent of the total number of 913 private-home purchases by foreigners in Q2 this year captured by Realis as at early August. This was up from a 51 per cent share in Q1, which in turn was higher than 47 per cent and 46 per cent shares in the fourth and third quarters of last year respectively.

Foreigners (including PRs) bought a total 913 private homes here in Q2 2008, up 3 per cent from the preceding quarter. Malaysians overtook Indonesians as the top foreign buyers of private homes in Singapore in the second quarter.

Malaysians accounted for 19 per cent (172 transactions) of the overall purchases by foreigners (including PRs), followed by a 17 per cent share for Indonesians. China and India citizens each accounted for 11 per cent of foreign buyers while UK buyers had a 9 per cent share.

Projects which received more foreign interest in Q2 include The Lakeshore in Jurong, Vutton at Akyab Road and Nassim Park Residences. Foreigners (including PRs) made up 44 per cent of the 55 units sold at The Lakeshore, and about two-thirds of the 11 units sold at Scotts Square and nine units sold at Martin Place Residences.

‘The Indonesians favour prime districts 9 and 10. District 15 is popular with all the five major nationalities because it offers sea views, easy access to the airport and city, and is a popular residential area even with the locals with its attractive amenities.

‘The Chinese, Malaysians and Brits also buy into the west. This could be due to the proximity to the Science Park, industrial estates and National University of Singapore,’ Ms Chua said.

 
Source : Business Times - 11 Sept 2008

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Google cuts time it saves Web data on privacy fears

Google cuts time it saves Web data on privacy fears
(SHANGHAI/NEW YORK) Google Inc, the owner of the world’s most-used Internet search engine, halved the length of time it keeps users’ records to assuage privacy concerns.
Google will keep search data for nine months instead of the minimum 18- month period introduced last year, chief privacy lawyer Peter Fleischer said in a blog post.

Google now holds on to search records for less time than Yahoo! Inc and Microsoft Corp, the second and third most used search sites.

The change is a victory for US and European lawmakers who said search engines keep too much personal data with little oversight in how they use them.

Google, which handles almost two-thirds of US searches, says the records have helped it create new Web services, fight online fraud and reduce unwanted e-mails.

‘While we’re glad that this will bring some additional improvement to privacy, we’re also concerned about the potential loss of security, quality and innovation that may result from having less data,’ Mr Fleischer said.

‘It’s difficult to find the perfect equilibrium between privacy on the one hand, and other factors such as innovation and security on the other.’

 
 
Last year, Sunnyvale, California-based Yahoo and Microsoft agreed to make data anonymous after 13 months and 18 months, respectively.

Google handles almost twice as many US searches as its two rivals combined. — Bloomberg

Source : Business Times - 11 Sept 2008

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Google ups the heat for Microsoft

Google ups the heat for Microsoft

Unlike Netscape, Chrome browser is a strong challenger for Internet Explorer
By JIM PUZZANGHERA AND JESSICA GUYNN

GOOGLE Inc reignited the web browser wars last week, releasing a competitor to Internet Explorer nearly a decade after Microsoft Corp used its monopoly powers to win control of the market.
 
Entering the fray: Google software engineer Ben Goodger introduces the company’s new web browser, Google Chrome, at the company’s headquarters in Mountain View, California, last week. Google executives hope Chrome will smooth the transition from using software on the desktop to using free versions online. They expect Chrome to play a key role in distributing Google’s online programs 
When Microsoft crushed Netscape, it wasn’t a fair fight. But this time, experts say, the software giant has found a strong rival in Google and its new product, Chrome.

The winners could be consumers as the two companies try to outdo each other with new features to lure web surfers, said Robert Lande, of the American Antitrust Institute.

‘It’s wonderful for America to see these two companies competing vigorously,’ said Prof Lande, a law professor at the University of Baltimore. ‘I hope Microsoft will fight back fairly.’

Google faces a major challenge trying to eat into Microsoft’s market with Chrome. But backed by its lucrative Internet search and advertising businesses, the Mountain View, California company is a much stronger competitor than Netscape was during Browser Wars 1.0.

Microsoft is still somewhat restrained by court oversight from a federal antitrust case that arose from the company’s heavy-handed assault on Netscape in the 1990s, according to legal experts. The Redmond, Washington-based software giant is also hindered by an ongoing European Union investigation of allegations that it improperly excluded rivals by bundling Internet Explorer into the Windows operating system.

Despite those constraints, its browser still helps almost three of every four web surfers jump from site to site. At a news conference in Mountain View last week, Chrome’s developers promoted it as a speedier, safer and more reliable way to navigate the web that will ultimately give consumers more and better options. Chrome, in the works for about two years, was first tested on thousands of finicky Google employees - including co-founders Larry Page and Sergey Brin.

The browser, available at www.google.com/chrome, could extend Google’s lead in its core business because Chrome users can set Google as their default search engine, looking up terms by typing them directly into the browser’s address box (Chrome also lets users select rival search engines).

But because the browser is the direct path to the web, many question why Google took so long to build its own. Mr Brin said it wanted to be large and strong enough to tackle the project.

‘We want several browsers that are viable and substantial choices,’ he said. Google has given technical and financial support to the Mozilla Foundation, which makes the only browser that has chipped away at Internet Explorer’s lead: Firefox. Mr Brin said Tuesday that Google would continue to back Mozilla but that it wanted to create its own browsing experience from scratch, which it did using some of the freely available software code behind Firefox and Apple Inc’s Safari browser.

Analysts said Chrome is a potentially powerful challenger to Internet Explorer, but it’s also an important part of Google’s broader run at such Microsoft cash cows as Office. Google executives hope that Chrome will smooth the transition from using software on the desktop to using free versions online. They expect Chrome to play a key role in distributing Google’s online programs, such as calendar, word processing and spreadsheets. ‘I think we’ll see more and more Web applications of greater sophistication,’ Mr Brin said.

Google faces an uphill battle against an entrenched opponent. Internet Explorer is pre-loaded on personal computers from the world’s top five manufacturers. Google would not say if it is pursuing distribution deals, but noted that it has in the past, such as the agreement with PC maker Dell Inc to include its search software.

By rolling out its own web browser, Google is trying ‘to take control of its own destiny’, said Sanford C Bernstein analyst Jeffrey Lindsay. ‘All of Google’s access to its customers and all of its access to its advertisers are dictated through the browser,’ he said. ‘If someone else has control of the browser, technically Google has a vulnerability.’

The Microsoft antitrust case will hang over the new browser battle, making both companies wary of improperly using their clout - Microsoft in the operating system and Google in Internet search, said Harry First, a New York University law professor who is writing a book about Microsoft’s antitrust cases. But he doesn’t think Microsoft will be significantly constrained, noting that the court oversight hasn’t prevented the company from maintaining its dominance in the browser market.

Microsoft said on Tuesday it was ready to battle. ‘We think competition is a great thing,’ said Dean Hachamovitch, general manager of Internet Explorer. A federal court found that Microsoft didn’t fight fairly against Netscape, the web browsing pioneer that had a dominant share of the market in the mid 1990s. Desperate for a beachhead on the Internet, Microsoft leveraged its Windows operating system to force computer makers to include Internet Explorer. The move violated an earlier antitrust settlement and led to suits by the Justice Department and a group of states in 1998.

Microsoft settled the case in 2002 and agreed to stop anti-competitive behaviour. It has been under court supervision, which is scheduled to expire in November 2009.

Google tried to take advantage of the court oversight two years ago, complaining that the search box on Internet Explorer was preset to Microsoft’s search engine. The Justice Department dismissed those concerns, saying the default browser could easily be changed. — LAT-WP

 
Source : Business Times - 11 Sept 2008

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Ease of doing business: S’pore is still No. 1

Ease of doing business: S’pore is still No. 1

By LYNETTE KHOO

SINGAPORE is tops for the third straight year globally in the ease of doing business, thanks to continual regulatory reforms, a survey by the World Bank and International Finance Corporation (IFC) shows.
New Zealand is a close runner-up, followed by the United States, Hong Kong and Denmark. The top five companies have all retained their positions from last year. The Doing Business 2009 report noted that Singapore has undertaken reforms in starting a business and dealing with construction permits.

It simplified the online process for business start-ups, cutting the time required by a day, and fast-tracked the process for giving out construction permits from 102 days to 38. The survey ranks 181 economies based on 10 indicators of business regulation that track the time and cost to start and operate a business, trade across borders, pay taxes and close a business.

The rankings do not reflect areas such as macroeconomic policy, quality of infrastructure, currency volatility, investor perceptions or crime rates.

A record number of 239 reforms were identified between June 2007 and June 2008 that make it easier to do business in 113 economies.

 
Eastern Europe and Central Asia led the world in reforms for a fifth straight year, with over 90 per cent of its countries making reforms. Africa also had a record year for regulatory reforms, with 28 countries completing 58 reforms - more than in any other year. East Asia and the Pacific saw the biggest pick-up in the pace of reforms among regions this year. Two-thirds of its economies introduced reforms, up from less than half last year. Some 26 reforms were identified in 24 countries across the region between June 2007 and June 2008.

‘Countries in the region are clearly committed to reform agendas,’ said Dahlia Khalifa, a co-author of the report. ‘Regardless of their stage of economic development, they are recognising the role that regulatory reform can play in staying competition while boosting entrepreneurship and job creation,’ she added.

Among the world’s largest emerging markets, China led with reforms that make it easier to obtain credit by expanding the range of assets that can be used as collateral, to pay taxes and enforce contracts, and retained its 83rd position. Brazil and India both eased trade processes.

In a teleconference yesterday, Sylvia Solf, programme manager of the survey, told reporters that the top 10 rankings were little changed as countries that make the list continually press for reforms as they seek to enter new markets, free trade agreements as well as to achieve cost efficiencies.

Seven Organisation for Economic Co-operation and Development (OECD) high-income economies, including Canada, Greece, Hungary and Portugal, made regulatory reforms this year.

Ms Solf noted that these high-income economies recognise that red tape remains an issue and are seeking ways to cut it.

 
Source : Business Times - 11 Sept 2008

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Singapore Eng Wah wins support for property sale

Singapore Eng Wah wins support for property sale

Next EGM could prove trickier for management
By OH BOON PING

THE first extraordinary general meeting (EGM) was a straightforward one, but expectations are that the second meeting could be a lot trickier.
 
‘They were sold for a song.’
 
- A shareholder, on the proposed sale of four properties to Eng Wah’s controlling shareholder and his daughter for $99.48 million 
 
 
 
 
At Eng Wah Organisation’s EGM yesterday, some 40 or so shareholders gave strong support for the proposed sale of the company’s Mandarin Theatre in Kallang Bahru to Carilla Pte Ltd for $13 million.

This price is significantly higher than the property’s net book value of $1.1 million as at March 31, and also represents a premium to its $12.8 million appraised value as at June 5.

The company’s asset sale came after it entered into a reverse takeover deal with Japanese pharmaceutical firm Transcutaneous Technologies to buy over its business by issuing new shares. One of the precedent conditions is asset sales.

However, all eyes are on the next EGM when the management seeks shareholders’ approval to sell another four properties to its founder and controlling shareholder Goh Eng Wah, and his daughter, managing director Goh Min Yen, for $99.48 million.

The properties - Jubilee Entertainment Complex in Ang Mo Kio, Toa Payoh Entertainment Centre, Empress Theatre in Clementi and the 16th floor of Orchard Towers - are part of a portfolio of assets put up for sale last November, but the search for buyers has proved controversial. At the heart of the matter is whether those asset sales were transparent enough and if the prices are right.

Last month, the Securities Investors Association of Singapore (SIAS), which represents retail investors here, called on Eng Wah to be more transparent in the sale of its properties, asking it to ‘ensure that the sale price is maximised’.

In response, the firm stressed that the proposed sale price to Mr Goh was based on the value of the assets determined by property consultants Chesterton International and CB Richard Ellis, amid negative market sentiment and a depressed credit environment.

Both Mr Goh - who has a deemed interest in 70 per cent of Eng Wah’s shares and is also executive chairman of the company - and Ms Goh will abstain from voting on the transaction. That means Eng Wah’s minority shareholders will have the final say on whether the sale takes place.

Yesterday, BT spoke to a number of shareholders and found that most were satisfied with Eng Wah’s response. However, the sceptics remained unconvinced, pointing to the undervaluation of those properties.

Without giving his full name, shareholder Mr Lui said that the premium offered is clearly inflated since Eng Wah did not revalue those assets despite the property boom of the past two years. ‘My question is: Are the balance sheet values a true and fair representation of how much they are worth?’ he told BT.

Another added:’They were sold for a song.’

One of the top 20 shareholders in Eng Wah is believed to oppose the deal, even though most investors are confident that the proposed transaction will muster enough votes to go through. But tough questions can still be expected the next time the shareholders meet.
 

 
Source : Business Times - 11 Sept 2008

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