tat hong, a local public listed company

tat hong listed a subsidiary in australia bourse. first day of trading price up by 23c or 23%. this kind of gain on ipo is almost unheard of in our local market for many years. many of ipo listings ended underwater on the first day of trading in our market. why? is our market sick or dead? is our market saturated with unattractive stocks? is our market unable to absord the flood of ipos? is ipo money drying up? are all our retail investors dead or lost all their monies? why is ipo no longer attractive? what is happening? do we manage our stock market or let it run wild, pennywise pound foolish, short term gain for long term loss?

how to make corporate governance real?

the weakest link in the whole system of corporate governance is the independent directors. as long as the system does not ensure that independent directors are completely independent from the management, it is very difficult to make the system works. it is like having kelong referee in a football match. what could possibly rectify this shortcoming is for mas to require independent directors to be appointed by an independent institution. all it needs is for 2 or 3 independent directors to be appointed from a neutral body to a company's board. and the directors shall be a member of the remuneration and audit committees. presently the best body to take on this role is the sias. it represents thousands of shareholders and should rightly be given a voice or say in the management of public companies. the minority shareholders need to be protected. the neutral institution can set its own rules and regulations on the criteria and eligibilities of candidates to be appointed as independent directors, set its own length of appointment, guidelines on remunerations etc. the service and appointment of independent directors will thus be out of the hands of a company's management, and the directors will come and go without having to appease the company's management. the independent directors can thus act independently, objectively and professionally for the interest of the company and the shareholders, and not just for the interests of the management. it is a simple and basic requirement without which the whole system of corporate governance is flawed.

li ka shing may sell his shares in suntec

what strikes me this morning is the headline that li ka shing may sell his shares in suntec city on grounds of principles. li ka shing will not be involved in any gambling business. his hotels in bahamas have also been approached to include casinoes but he declined them. no gambling business in his empire. many rich and famous people shun unethical businesses. many will live within their own principles of goodness or morally right way of doing things. it is easier, and desirable to be so. when one is hungry, there is a tendency to fight the world, fight the system, fight all moral values, to earn that dirty dollar. i am not saying that all the rich and famous gone through this route. for those who have made the dollar and are very comfortable, it is surprising that many are still sticking to their old self, the immoral self, the unethical self, to continue to earn that extra dollar that did not mean anything more to them anymore except to add on to their fat savings accounts. many have gone pass the stage where they need to earn money. many have so much money to last for generations. but still just as unethical and immoral. they did not see the need to cleanse their unsavoury past. they did not see the need to be decent or to start to lead a more decent way of life, doing a decent business. they will still sell a basket of rotten apples with only the top layer covered by good apples. this may be the reason why the creature called human beings will live to destroy itself eventually. not monetarily, but morally. so much money and wealth, so little goodness.

corporate governance and davinder singh

davinder singh wrote a one page article in the straits times on corporate governance. for him to devote so much time, his time is very expensive, it means it is a serious issue that warrants a lot of attention. for corporate governance to be effective, he touches on many pertinent factors that have to be pieced together. these include ethics, good systems and practices, educating the shareholders, role of the press, role of enforcing agencies and regulators, managing family interests, and whistle blowing. davinder has covered all grounds except one which i find it very uncomfortable to be left out. i have suggested to the relevant bodies that independent directors must be really independent. for this to be true, independent directors must be appointed or be provided by an independent organisation unrelated to the companies they are to serve. their independence shall include remuneration and terms of tenure. by detaching independent directors from companies, they will not be beholden to the organisations and can then be more emboldened to question the practices of the organisations. the more the independent directors excelled in checking wrongdoings in companies, the higher will be their profiles, and the less welcome they will be in the boards of companies. on the other hand, they will stand up as the champions of the small shareholders. so it is very vital that their appointments to the boards be out of the hands of the companies. two organisations can take on this role, the stock exchange or the sias. both have an interest to want to see companies tow the line and be proper in the conduct of their businesses. under the current system, independent directors are invited and appointed by the company's management or ceo and paid by the companies. the extension of their tenure is also dependent on the goodwill of the management and are expected to play ball. how are independent directors going to be independent under such a system? an over zealous director will soon work himself out of the invitation list. the reason is obvious. for corporate governance to be effective, we need an independent body to appoint the independent directors.

nkf reserves, 4.5, 7 or 30 years

this is getting to be very exasperating. it was 3 years before the court case. during the court case it became 30 years. a week ago it was 4.5 years or 7 years. today a forumer in the straits times, cheong wing lee, worked it out to be 26 years. cheong's figure is based on an annual expenditure of $19.6 mil against an interest income of $7.8 mil from the $206 mil in reserve plus a govt grant of $4 mil. this gives an annual shortfall of $7.8 mil. $206 divide by $7.8 will give 26 years. then there is the monthly donation of $1.7 mil which gives a total of $20.4 mil a year. this alone should be more than enough for the 19.6 mil expenditure, without having to touch the $7.8 mil. assuming that nkf did not go an an expansion drive to build more facilities, the $206 mil can last forever. and the $7.8 mil interest will actually be a surplus! now which is which? can all the experts and finance people please tell us what is the correct number? the public deserves the truth. or can the newspaper get someone to do some investigative reporting and explain to the public, once and for all, what is the true number?