A good Act?

The latest Raffles Conversation in Singapore's The Business Times profiles the co-author of the controversial Sarbanes-Oxley Act to help contain corporate scandals in the US.

Will we see the end of big corporate scandals in the decadent US? Don't bet on it.

Business Times - 29 Mar 2008
In defence of Sarbanes-Oxley
Paul Sarbanes, co-author of the ground-breaking securities law which bears his name, tells WONG WEI KONG why corporate America is far better off with it

FEW political careers can count the removal of the US President and the passing of one of the most important securities legislations in history as highlights, but Paul Sarbanes is a man for times of impeachment and scandals. In three decades in the US Senate, Mr Sarbanes earned a reputation for working quietly behind the scenes on complex issues before announcing his retirement in 2006. The Democrat was Maryland's longest-serving senator, called by some as 'the man who cannot be removed'.

But what thrust the low-profile Mr Sarbanes into the glare of world scrutiny was the ground-breaking securities law he co-authored as chairman of the Senate Banking Committee with House Representative Michael Oxley in 2002 and which bears his name - the Sarbanes-Oxley Act or SOX.

As the retired senator recounted in a recent interview with BT, President George W Bush called SOX 'the most far-reaching reforms of American business practices since the time of Franklin D Roosevelt' when he signed it into law.

Despite its fierce critics, Mr Sarbanes' assessment of SOX is unequivocal: corporate America is far better off with it.

'The system is in place and working. I think it has made a substantial difference for the better,' he says. Mr Sarbanes was in Singapore at the invitation of The Asian Banker to speak to a gathering of business leaders, where he predictably found himself addressing some of the criticism against SOX.

SOX came into being as a response to a number of major corporate and accounting scandals in the US, including Enron and WorldCom. The scandals cost investors billions of dollars when the share prices of the affected companies collapsed, and shook public confidence in the nation's securities markets.

The legislation, which does not apply to privately held companies, aimed at creating a strong independent oversight board to oversee the auditors of public companies. It addressed conflicts of interest, ensured auditor independence, required corporate leaders to be personally responsible for the accuracy of their company's financial reports, and established safeguards to protect against conflicts of interests involving investment analysts. The Act also established a new quasi-public agency, the Public Company Accounting Oversight Board or PCAOB, which is charged with overseeing, regulating, inspecting, and disciplining accounting firms in their roles as auditors of public companies.

Debate, however, has continued over the perceived benefits and costs of SOX. Supporters contend that the legislation was necessary and has played a useful role in restoring public confidence in the nation's capital markets. Critics charged that it was too burdensome and costly, especially for smaller firms, with US companies spending a total of US$6 billion last year on SOX compliance. It also made US exchanges less attractive to foreign companies.

Internal controls

To Mr Sarbanes, it all comes down to a simple question. 'Every public company should have an acceptable system of internal financial controls. I think that's part of being a public company. For most people, if someone came up to them and wanted them to invest money in a company and they ask, how good is your system of financial controls? - If the person says we don't have a system of financial controls, we don't believe in having such a thing, we think it's a burden, I doubt people would put their money in such a company. You wouldn't put your money in a company like that.'

Asked if a code of best practices - using a 'comply or explain' approach - would be a better way to good corporate governance than an overarching legislation like SOX, Mr Sarbanes says different markets need different approaches. 'I think it depends very much on the circumstances of particular markets and the culture of those markets. I didn't think 'comply and explain' will work in the US because I think you will have 'all explain and no comply'.' He notes, too, that in markets like Singapore, where 'comply and explain' applies to certain aspects of corporate governance, there are other requirements which are law. 'Generally, worldwide, there has been a movement towards the standards of SOX. Regulators around the world either independently through their own analysis or with reference to SOX have put into place many of the provisions regarding best practices.'

Moves by US regulators to extend the deadline for smaller companies to comply with SOX while deciding how the law should apply to these firms do not undermine the legislation in any way, Mr Sarbanes says. 'When we drew up SOX, we left a lot of discretion with the regulators to fine-tune these requirements. That's how the system was supposed to work. You adapt the protocol to make it less burdensome and yet at the same time provide investor protection, and I think that's all to the good.'

In reply to critics who charge that good corporate ethics are better brought about by education than tough laws, Mr Sarbanes says the two are not contradictory. 'The temptation to depart from high standards can be very great because, often, it seems that you can make a lot of money in a very short time. So you need to have a monitoring system to check people from departing from proper practices and you also need to be constantly emphasising to people the importance of following proper practices out of their own decision and their own choice.'

Mr Sarbanes also disagrees with claims that SOX has made US markets less competitive against other exchanges. 'Let me put that into context with two general observations. For decades, countries around the world have been urged to develop the capitals markets and that's what they've been doing. Secondly, you have significant economic growth elsewhere, with Asia as the prime example. So there is capital available and liquidity to underwrite these capital markets. You have significant financial centres in Singapore and elsewhere so in effect, you're getting a globalisation of the financial services industry. You have a more competitive situation so I don't think it squares with current developments that New York would dominate in the way it used to.'

'Having said that, I think it can still compete effectively and it has been doing that. The figures go up and down but studies have shown that foreign issuers who list on the New York capital market get a premium from investors who are prepared to pay more because they are sure that if these firms meet the listing standards there, it says something about the level of corporate governance of the firm.'

Recalling the days after the Enron scandal, Mr Sarbanes says pushing SOX through in the first place was also not as easy as it later seemed. 'In restrospect, you look at it and think it was easy because it was passed with overwhelming margins in both houses of Congress. But getting there wasn't easy. My first task was to get it past the banking committee and we worked on that for many months and made some adjustments and some compromises. In the end, we had a 17-4 vote within the committee. All the Democrats and the majority of the Republicans voted for it and it was truly a bi-partisan judgement.'

'Four days after that, the Worldcom scandal broke. Once that happened, it gave a tremendous momentum to the legislation and that just help pushed it through because the scandal was a very large and stark reminder of the need to have such legislation.' When it went to Congress, SOX was approved by the House of Representatives by a vote of 423-3 and by the Senate by 99-0.

Asked if more could have been included in SOX - such as checks against excesses in top executive pay - given the strong political and public support at the time, Mr Sarbanes says he did not think so. 'I'm not sure we would have succeeded with putting in a lot more. It's like a train leaving the station. If you put too much weight on the train, it wouldn't be able to make it out of the station. So we had to be very careful.'

'And compensation is a very complex issue. It's not clear that it's an issue one deals with legislation. You need to have a clear understanding of the inner workings of the corporation. I don't think you can get government into setting the salaries and the compensation of executives. But we now require the full disclosure of compensation and the expensing of stock options.'

Turning to the present sub-prime crisis, Mr Sarbanes says it is a very different situation from what SOX dealt with. 'SOX dealt with corporate governance, audit requirements and the requirement that companies honestly report their financials. It didn't deal with bad economic or business decisions. That's part of the economic decision process and some people make good judgements and some people make bad judgements.'

'The current crisis comes from obviously bad economic decisions. A number of people operated on the premise that everything would go up, they were highly leveraged and they were developing more and more exotic mortgage products and now they are paying the consequences for it.'

'Overall, the risk management system has been inadequate. I think the supervision by regulatory authorities has fallen short. A lot of what was going on in the sub-prime mortgage market shouldn't have been allowed. They were giving mortgages to people without documentation of income to show that they are able to pay. They had products which gave you a very low teaser interest rates for a couple of years and then the rates would jump up and the mortgage payments jump up substantially and there is nothing to show that these people with such mortgages would be able to hang on to the monthly payments. The consequences of all of this is to create a crisis of confidence. The part of the total market that the sub-prime loans occupy is relatively small but the spill-over from it led to the seize-up in credit.'

Mr Sarbanes says policy-makers now face a dilemma which he and his colleagues did not have to grapple with in the days after Enron. 'We didn't have the same counter-prevailing conditions. The current situation is more complex.'

'On the one hand, the people who made these bad judgements, many of whom had engaged in speculative activity, should bear the consequences of their actions. Unless punished by market forces, the danger is that others would repeat the process in the future. On the other hand, as much as they should bear the consequences, if that ends up throwing the economy into a down-spin and you have a broad negative economic impact, that creates quite a huge problem in your hands. People totally unconnected with these issues will be impacted.'

'I think the Fed and other economic policy-makers are trying to work their way through these competing considerations ... so we just have to see how it develops.'

For Mr Sarbanes, SOX capped a long and distinguished career. Born to Greek immigrants, he grew up in Maryland's Eastern Shore in the city of Salisbury. Mr Sarbanes attended Princeton University, earning a bachelor's degree in 1954. He was awarded a Rhodes Scholarship that brought him to Balliol College of the University of Oxford in Oxford, England, graduating with a First Class degree in 1957. He then returned to the US and attended Harvard Law School.

After graduating in 1960, he clerked for Federal Judge Morris A Soper before entering private practice with two Baltimore, Maryland law firms. In 1966, Sarbanes ran for the Maryland House of Delegates in Baltimore City and won. He was elected to the US House of Representatives in 1970 and was re-elected in 1972 and 1974. In 1976, Mr Sarbanes became a US Senator and was re-elected in 1982, 1988, 1994, and 2000.

It was during his service in the House, in August 1974, that Mr Sarbanes was selected by his Democratic colleagues on the House Watergate Committee to introduce the first Article of Impeachment, for obstruction of justice, against President Richard Nixon. President Nixon later resigned before the impeachment proceedings were brought to bear.

Other weighty issues followed for Mr Sarbanes over the years. He helped lead the successful 22-day debate on the Senate floor to ratify the Panama Canal treaty, earning him the enmity of conservative groups. He served on the committee investigating the Iran-contra scandal, where he criticised President Ronald Reagan for allowing a 'junta in the White House'. He also served as ranking Democrat on the Senate Whitewater Committee which investigated President Bill Clinton's real estate dealings in the Whitewater scandal and the suicide of Deputy White House Counsel Vincent W Foster Jr.

'It's interesting that at the beginning of my career in Congress I was involved in the very large issue of impeachment and at the end of my career in the Senate, I had the opportunity to be involved in SOX. There have been other issues in between but those two stand out,' he says.

'In terms of gravity, I think nothing is comparable to impeachment proceedings. After all, you are removing an elected president chosen by the people directly. You are removing the president from office. That was a very big step to take. That was a very momentous issue to be involved in. I was very mindful of that at the time and have remained so.'

'On the other hand, I think SOX will have a lasting impact and a lasting history. I think it would be an impact for the good.'

Still adjusting to life after retirement, Mr Sarbanes, just past his 75th birthday, does 'a little speaking and teaching'. The torch, though, has been passed on. His son, John Sarbanes, won the election for Maryland's Third congressional district in 2006, the district that Mr Sarbanes represented prior to his election as Senator. 'The moment I left Congress, my son entered Congress. That's really very satisfying.'

Guardian of Singapore's food supply

The Raffles Conversation series in Singapore's The Business Times today featured a Singapore government official, who is the 'guardian' of Singapore's food supply as aptly described in its headline.

The article mentioned the well-known fact of Singapore's move to diversify its food sources as a response to rising costs of food in the world.

"In response to the rising costs of food, the agency has been diversifying its food supply sources, such as chickens from Brazil, vegetables from Vietnam and Indonesia, frozen ducks from Taiwan and seafood from Namibia. With the exception of eggs, all the key food items in Singapore have less than 50 per cent of their supply coming from a single country," the article stated.

While it is not explicitly stated, the move is presumably a long-term attempt to reduce dependence on any country as a strategic move to safeguard its national interest. While it is not overtly stated, the move is probably also aimed at cutting dependence on food supply from Malaysia as its traditional source.

Why? Singapore knows the danger of being overly dependent on any country, especially its close neighbours Malaysia and Indonesia, for key supplies. We have seen it in the case of the water squabble with Malaysia and the ban of the sale of sand to Singapore by the two neighbours.

As a result of bilateral skirmishes with its two neighbours, Singapore has had to resort to some innovative measures to assert its independence and sovereignty.

In the case of water, Singapore started developing alternative water sources -- such as NEWater and enlarging its water catchment areas -- following their tiff over the renewal of the water contracts with Malaysia in the late 1990s. We also learnt that Singapore has been stockpiling sand on the island following the ban by Indonesia.

While it is good to reduce its dependence on any country, Singapore cannot cut its dependence on them completely. All countries are dependent on each other.

Today, Singapore is a lot richer than its neighbours. But fortunes can also change overnight.

Guardian of Singapore's food supply

As head of the Agri-Food & Veterinary Authority of Singapore, Chua Sin Bin has the monumental task of overseeing the Republic's sources of food, upholding food safety standards and safeguarding animal and plant health. CHEN HUIFEN reports

CEOs tend to be an impatient lot. Once they sit down to meet the press, they can't wait for the interview to start and be done with it, so that they can get on with the next engagement.

But not so Chua Sin Bin, 60, CEO of the Agri-Food & Veterinary Authority of Singapore, the key agency responsible for making sure that Singaporeans can enjoy their favourite foods with peace of mind and that the well-being of Singapore's plants and animals is being managed properly.

Before getting down to the formal part of our interview, Dr Chua spends a good half an hour sharing snippets of his personal life.

As his corporate communications assistant director prepares a cup of tea for the man, he speaks of his ambivalent attitude to the other hot drink associated with hospitality. 'I like the smell of coffee,' said Dr Chua. 'I always offer to make my wife coffee because I like the aroma, but I don't quite like the taste of it.'

Very soon, one learns that the man is a tea connoisseur and the former chairman of the Technical Committee for Tea, which was charged with setting the Singapore standard for teas, with a view to establish a tea auction centre here. 'But the auction centre never really took off,' he said with a wry laugh. 'So we wasted all our efforts.'

He knows his teas by type and origin, as well as the processes that go into their making. His favourite is Zhejiang's unfermented Longjing tea.

'It's the nicest of all,' said Dr Chua, who is also chief veterinary officer. 'Because it is green tea and hasn't gone to oven to dry. It's dried in the wok, by hand. So you can see the gentle treatment which the tea leaves have been given. The heat is not hot enough to burn your hand, so it is a very tedious process. As for Japanese tea, it tends to have a little bit of a burnt taste. So I always go for Longjing.'

Perhaps his youthful complexion has something to do with his tea drinking habit. Or his eating preferences. He proclaims that he is not adventurous when it comes to food, and will avoid anything with MSG or raw ingredients such as sashimi. 'My wife hardly fries,' he added. 'Most of the foods we eat at home, I think, are blanched.'

Spotlight on AVA

It is hard to pinpoint whether such habits are driven by health reasons or simply an extension of his professional undertaking. After all, food safety is part of his responsibility. And with food scares, import bans and rising food prices headlining the news recently, the spotlight has been cast on AVA to come up with measures and solutions.

In response to the rising costs of food, the agency has been diversifying its food supply sources, such as chickens from Brazil, vegetables from Vietnam and Indonesia, frozen ducks from Taiwan and seafood from Namibia. With the exception of eggs, all the key food items in Singapore have less than 50 per cent of their supply coming from a single country. Even so, Dr Chua concedes that food prices will continue their rising trend, owing to the supply crunch and growing demand from emerging economies in the region.

'When oil prices go up, food prices will go up because it's a knock-on effect,' he explained. 'Agricultural inputs, fertilisers, pesticides - a lot of these are derived from fuel. And you need energy to produce them. The logistics, the cost of transportation also increases, so that will contribute (to rising prices).'

Adding to the pressure is the worldwide hunt for alternative, green energy using food crops such as corn oil and palm oil. 'Perhaps it is also market failure in a way, because when farmers see that corn, palm oil are getting good prices, of course they want to grow corn and palm oil.' As a result, less of the earth's finite arable land is allocated for food crops.

For a longer term solution, science would have to come into play - either by achieving a better yield for crop production, or through a more efficient use of non-food crops such as jatropha for biofuel. Dr Chua is hopeful that the 'world will wake up' one day to its folly of diverting wholesome food crops towards fuel production.

Until then, more and more people could look toward genetically modified (GM) foods as a solution. Genetic modification involves taking DNA from one organism, modifying it and injecting it into a target plant in order to improve productivity or enrich it with a certain quality. GM corn products and soya beans are already available in Singapore.

'We have tested them, done the risk assessment, and the Genetic Modification Advisory Committee has also evaluated,' said Dr Chua. 'And we both agree that these products are safe and therefore they are in the marketplace.'

While food prices in Singapore is something which the AVA can help manage but not control, the authority can however claim credit for the standard of food safety here. Based on 2006 data, the number of food poisoning cases in Singapore is 35.93 per 100,000 population, lower than New Zealand's record of more than 400 cases per 100,000 and way better than the record of more than 2,000 cases in the US. Even taking into account the Prima Deli incident, last year's figure came to 36.67 per 100,000, within AVA's target of under 60 a year.

The consistent performance is achieved through stringent controls at source. For example, the AVA accredits sources, carries out checks and tests on food products at the point of import before making them available to consumers. In managing food poisoning outbreaks, the agency is also noted for its speedy and decisive response, as seen in the shutdown order on Prima Deli last year, after more than 100 people were infected with the salmonella enteritidis bacterium after eating the bakery's cakes.

'People may think we are hard on the industry, but the public is more important,' said Dr Chua. 'To us there's nothing more important than making sure that our public is protected.'

Even in the area of disease outbreak management, Dr Chua ensures that the same fastidious approach is applied. Multiple layers of defence are in place to prevent a bird flu outbreak, including netted cages to cut off contact with local poultry by wild birds. Farms are also discouraged from sharing equipment and allowing casual visitors to their premises. Vaccinations are carried out at the zoos and the bird park and surveillance at slaughterhouses and immigration check points has been stepped up.

'On top of that, we have already mapped out our contingency plan to get rid of bird flu in the event that it actually comes in,' he said. 'Various scenarios have been thought out.'

The AVA also holds regular training exercises and culling operations. 'I don't think we can totally eradicate the disease because of the wildlife reservoir. So what every country needs to do is make sure that they have a good system in which they can move in straight away and stop it from spreading.'The system should be based on comprehensive risk assessment.

'Because we have finite amount of resources, we cannot squander that resource away by going everywhere trying to look for problems. No, we do our risk profiling. Every country, we risk-profile them. Also the sources, we risk-profile.'

As human beings continue to encroach further into the natural habitats of animals, exotic diseases such as bird flu and mad cow disease are unlikely to go away. The good thing that came out of the trend is that relevant agencies in each country have become more vigilant and more collaborative.

While the AVA can do all the forward planning and carry out preventive medicine initiatives, Dr Chua stresses that food safety and disease control should not be the sole responsibility of a single agency. The industry and the public must also play their role in paying attention to their consumption and surroundings, keeping in mind that there are groups of vulnerable people amongst us.

'There's a group of vulnerable population, people who are immunology-compromised, such as transplant patients, people who have diabetes, who have gone through chemotherapy,' he said.

'They are most susceptible to outbreak of diseases and food poisoning.'

Proactive role

Dr Chua himself takes a proactive role, too. As he admits, he may be a terrible cook, but he enjoys accompanying his wife on her marketing rounds to help choose ingredients. At this point, he readily debunks the popular supposition that supplies from wet markets are fresher than those from the supermarkets.

'I think both are the same,' he said. 'What's important is how they handle it without breaking the cold chain - that is critical to keeping the freshness of the food.'

Of course, it helps that he has a rough idea of where the supplies come from, and how they are managed in the logistical process. He also talks to the traders frequently to get their input.

'Take for example, vegetables from China. It's a long distance to come. But the post-harvest handling of vegetables, using uninterrupted cold chain, gives you very good products at the end of it.

'You must remember that vegetables ... when they are harvested, they continue to breath. So if we slow down the metabolism process, then actually you will keep the freshness and quality. And refrigeration is the way.

'If you lower the temperature, they almost go to sleep - hibernate and not metabolise so fast. So the freshness is preserved, and they can travel for a long distance, for a long time and keep so much better in the fridge when you take them home.'

Spoken like a specialist.

Jack of many trades

BT profiled DBS Group Holdings chairman Koh Boon Hwee in its Raffles Conversation series today. He sounds like a real talented man with so many big job titles and interesting job experience. But I often wonder which business is his ultimate passion.

It would have been interesting if Boon Hwee had also talked about recent changes in DBS and departed CEO Jackson Tai and COO Frank Wong.

Maybe, it's a story for another day.

DBS Group Holdings' chairman Koh Boon Hwee talks to KENNETH JAMES about his multiple roles as private investor, corporate leader and educationist

GOOGLE the subject of this Raffles Conversation and one is rewarded with this unexpected gem: 'I Love Koh Boon Hwee' T-shirts, complete with bright red heart, for sale at Amazon.com.

Told about it, Koh Boon Hwee bursts out laughing. 'You've got to be kidding me!' he says. 'Anyway, who on earth would buy one?'

Well, let's see. As one of corporate Singapore's most prominent figures, Mr Koh no doubt has his detractors, but there are probably a whole lot more admirers of his corporate story.

After all, his track record is impressive. Our wide-ranging conversation takes place in a meeting room across from his office at the top of DBS Building Tower One; he is chairman of DBS Group Holdings and DBS Bank, the country's largest bank. Prior to this appointment, from July 2001 to December 2005, he was chairman of Singapore Airlines, where he successfully shepherded the iconic international carrier through one of the most turbulent periods in aviation history.

From 1986 to 2001 he was chairman of the Singapore Telecom Group (SingTel), overseeing its transformation from statutory board to regional communications powerhouse. All this while, for 10 years from 1991, he headed the Wuthelam Group as its executive chairman.

On the education front he's enjoyed a long association with Nanyang Technological University (NTU), where he currently serves as chairman of the Board of Trustees.

And this doesn't even include what Mr Koh considers his main vocation: investing in, and guiding, a host of companies in Singapore and abroad.

Not bad for someone whose earliest career 'highlights', following his recruitment to US multinational Hewlett-Packard's Singapore office in 1977, were a couple of million dollar ventures that famously bombed.

That's a story Mr Koh has told with relish many times over. But it's clear that the underlying theme, tolerating and even welcoming failure as integral to the entrepreneurial process, remains as relevant to him now as it did decades ago.

'My partners and I have often backed people knowing full well that we might lose the money completely,' he says at one point. 'But we thought that what the person might learn might actually make him a lot more successful in his second venture. And that has often been the case.'

Which is why he considers himself not just an investor but an 'investor-builder'. Drawing a comparison with venture capitalists, he explains: 'In my mind the venture capitalist has a very specific role; most of the time they are investing money that is raised from other people. Because the fund has a life, you have to plan an entry, and then you make your money by planning an exit.

'I think of myself as an investor-builder because, first of all I'm not managing third-party money, I'm usually investing for myself. (And) to me an investor-builder is someone who doesn't have that time frame sitting in front of him. He can take a five-year, a 10-year, a 20-year perspective. And he can grow with that business from startup through expansion to growth to maturity. Does it mean you will never sell the business? The answer is no, obviously. But is it in the forefront of your mind? Probably not.'

Such an approach allows him the luxury of looking beyond immediate bottomline considerations, although he emphasises: 'Let me say that your judgement is more often wrong than correct. And that's the nature of investing, especially in startup businesses.'

Having said that, he willingly shares his modus operandi: 'I've often been asked, what do I look for? I would say that the first thing I look for is the person behind the idea. Why is he interested in it, how committed is he, what will his tenacity be like when he faces adversity? You know, these are all issues related to soft judgement, and that isn't going to be brought home by going to business school.

'And if the person passes muster, then you take a look at the PowerPoint presentations and the spreadsheets, to get an idea of how large the business will be, and how it might stack up against competition.'

Pressed for an example, he initially declines - 'I'm not so sure that the people who are behind those businesses would like it necessarily publicised' - but finally relents.

He relates: 'One of our more successful investments has been in a company in China that manufactures acoustic components for the mobile handphone market. We were drawn to that investment primarily by the man who was behind it. He was young, he was obviously very smart, but more important than that, I think he had the right attitude.

'He was prepared to work, and you had the feeling in talking to him that although he had this business in mind, and he had a plan for executing it, and he had a passion for it, that it wasn't just about making money for himself. He wanted to really make an impact, to be a factor in at least the part of the business that he was in.'

Mr Koh and his partners decided to back the entrepreneur, who 'proceeded to grow the company very well, and it was eventually listed on the Hong Kong Stock Exchange and he still runs it very successfully'.

So has Singapore finally imbibed this entrepreneurial culture, even embracing failure?

'Oh I would definitely think so,' Mr Koh replies instantly. 'I would say that we are a lot more open, a lot less quick now to stigmatise people because of failure. I think lots of people who may not have been successful the first time get a second chance. Is it quite like Silicon Valley yet? The answer is no, but I think Singapore has made vast improvement.'

But he has some pertinent advice for would-be entrepreneurs here: 'You continue to hear complaints about people starting up and not being able to find startup money or venture capital and things like that. I hear that all the time. My own take on that is there is plenty of money for investment. But getting that money does require hard work on the entrepreneur's part. It does require a soundly thought-out strategy.

'And very often that's not the case in Singapore. The weakness I see is not in engineering skills or technology skills or research and development, it is in marketing and sales. A business plan without addressing a market, without an assessment of your competition, without telling people how you intend to distribute and sell the product, is highly incomplete and therefore unlikely to be funded.'

Mr Koh's emphasis on people and the long term - the 'builder' part of being an investor-builder - is an advantage he brings to the boardrooms of the mega-companies he has been involved with.

At SingTel it helped him guide the stat board through what he readily concedes was a 'very painful' privatisation process.

He recalls: 'In three to four years the organisation shed over 4,000 people, which was 30 per cent of its staff at that point in time. But it was essential to prepare the organisation for competition. Do I enjoy downsizing? The answer is obviously no. I've done it so many times in my life. Every time it's ...' He doesn't complete the sentence.

He continues: 'As a manager, the minute you start thinking of people as digits you can grow and downsize, I think you need to get out of the business, because it means that whatever's left of you as a human being is probably gone.'

SIA was challenging for different reasons. He piloted the airline through a series of storms: September 11 in 2001, the Bali bomb attack in 2002, SARS in 2003, record fuel prices in 2005. The carrier stayed profitable every year, and in fact had record profits in 2005. Even so, his speech to SIA staff when he was leaving was a starkly cautious one.

He explains: 'In a service industry you can have an idea, but the idea is just two to three months away from being followed by everybody else. The nature of the business isn't such that you can look for one big thing and knock everybody out. You must do all of the things that you're doing just a little bit better than the competition. The seats have to be a little more comfortable, your cabin crew has to be a little bit more helpful and polite, your aircraft have to be a little bit more punctual, hopefully 100 per cent ... so that all of those little things add up.'

Now, with impeccable timing, he is chairman of a major bank in a time of global financial crisis. He exclaims: 'I can't think of a better time. You learn a lot.' The way Koh Boon Hwee says it, it sounds like a clarion call. You can see the builder taking charge.


The next education challenge for Singapore

EDUCATION has always been a big thing for DBS Group Holdings chairman Koh Boon Hwee, who is also chairman of the Board of Trustees of Nanyang Technological University (NTU).

But while the education system here is, in his words, 'one of the greatest achievements of Singapore', there is a need now to take higher education even higher, he says.

He explains: 'Two things are happening. First of all, the environment in Singapore is changing, and the universities have to adapt to that as well. Let me give you an example. For the first 20 years of NTU and its predecessor organisation NTI (Nanyang Technological Institute), the goal really was to ensure that we produced enough technical and engineering manpower to fund Singapore's demands, and the technology investors who would be coming in. And that's what we did. Starting from almost zero it went up to a student population of 20,000-21,000, the majority of whom were in engineering. And it's one of the reasons companies come to Singapore.

'But the state of Singapore's economic development now is that we are coming to the stage where it isn't just about providing manpower to fund industry, it is about providing manpower to fund research labs. Which basically means the university cannot just continue to produce manpower that can keep the machinery humming and the plant operating. You now have to produce people who are able to say, how can I improve the design of the plant, how do I improve the design of the product, what new ideas can I have for the next drug, or whatever it is? That's a quantum step up in the quality of manpower you need to produce. And that is the challenge that NTU is rising to.'

Mobile students

The other challenge is that, even in education, globalisation has had an impact, he says.

'Students today are very, very mobile, especially those who come from countries where their parents can afford it. Even if they can't afford it, some of the best universities in the world, the Harvards and the Yales, are now saying, 'We don't care whether you're from India, or from China, as long as you've got the brains, we will fund that education'.

'More important, universities now are ranked. Students all over the world see it, faculties see it. If you are a world class faculty (member), are you going to agree to work in the 212th university in the world, when you know that universities are recruiting all over? Well, today some of the best universities hire from all over the world, so the competition for professorial talent, for student talent, is becoming increasingly global.

'The challenge for NTU is to ensure that we accept those realities of the new environment and rise to that challenge. Which is what we're doing. We've just brought in a new provost, Bertil Andersson, (who is) very research oriented. We need to figure out a way to get our academic faculty to do not only teaching but research as well, and therefore you want to have a person who has spent his entire career steeped in this sort of thing.'

Research mindset

Mr Koh, who is also a member of Singapore's high-level Research, Innovation and Enterprise Council (RIEC), concedes that Singaporeans need to develop what he calls a research mindset.

'We don't have a lot of people who are steeped in R&D processes and protocols. We're not steeped in the idea that if we invest $100 million in R&D, maybe $80 million will be wasted, but somewhere along the line maybe $20 million of it may produce the next breakthrough idea. We're impatient, we have an 'instant-tree mentality', if we want a tree we're gonna plant it right now.

'The development of R&D isn't an instant-tree solution. You can try to shorten the process, which we're trying to do. With the help of the National Research Foundation and A*Star, we have been able to attract some really great scientists. And now we have to be patient.

'We can't say, now we've given you the environment and the funding, please win the Nobel Prize next year! It doesn't work that way. You've got to have the patience to let things develop, accept the idea that there will be some wastage, and you have to take it one step at a time.

Taking ST Engineering to the next phase

The latest Raffles Conversation profile in Singapore's The Business Times today.

Taking ST Engineering to the next phase

Tan Pheng Hock, ST Engineering president and chief executive officer, tells WONG WEI KONG that the defence conglomerate has reached a stage where it is ready to shape the market

SINGAPORE Technologies Engineering (ST Engineering) used to set the pace for other blue chips by being the first to announce its results every year. A few years ago, it stopped doing so. An increasingly complex business spread across the group meant that it had to take more care - and time - to get its numbers right.

But being first just for the sake of it has never been Tan Pheng Hock's way. 'Fast is good, but it is secondary,' he says in an interview with BT. 'Our first criterion is to have a robust set of numbers that we can sign off and say, 'This is it'.'

'Put it this way, we are a big group now. It is not just about cultural diversity but differences in practices, environmental issues, local regulations, practices and procedures.

'When we were Singapore-centric, that was easy because we have been together for the last 30 to 40 years and we have an established set of processes and procedures. However, when you add on companies, you can't say that anymore. So we also have to address these concerns because being first is not necessarily the most important. More importantly is to make sure you have a robust set of numbers.'

Emphasising the process and not just the outcome is at the core of defence and engineering conglomerate ST Engineering, says Mr Tan, 51, who became its president and chief executive officer in 2002. It defines how the group is run, how it interacts with its customers, and how it bids for contracts and makes acquisitions. It is also something Mr Tan learnt from - you wouldn't expect it - his days as a minute-taker.

'One of the values I learnt in my younger days as an engineer was from writing minutes. I used to be arrowed by my boss to write minutes. All of us hated to write minutes. Writing minutes is not fun.

'I realised that if I take it as just writing minutes, it is really no fun. But if I start observing how issues are being discussed, how people make decisions, how people manage dissenting views, how they arrived at the conclusion, then, there is actually a lot of value in it.

'So I said, 'I better observe how things are being done'. I used to sit in meetings chaired by Philip Yeo, Kua Hong Pak or Ho Ching. You learn from people who are already there - they don't teach you, but you can observe how some people make decisions so fast. These are valuable lessons that people don't teach you, that no courses really teach you, but are invaluable.

'So I also try sometimes to get engineers to sit in meetings and say, 'Look, writing minutes is not important. What's important is what you get out of it. Do you get the essence of the three-hour discussion?' In that way, people don't feel like they are being arrowed but view it as recognition, a development rather than a task. So I'm appreciative of that and now I know why I was given that task.'

Years removed from his minute-writing days and as chief operating officer of the group, Mr Tan was to see ST Engineering and its Bionix Infantry Fighting Vehicle lose out on a US$4-billion US Army contract for light armoured vehicles. It was a major disappointment, but Mr Tan says the outcome did nothing to detract from the value of the process.

'Actually we got lots of value out of it - not in dollar terms. ST Engineering created a name in the US that we never had before. Although we didn't win, you can now see politicians and defence industry leaders acknowledging ST Engineering's capabilities. The US Department of Defense has acknowledged that we have good solutions.

'Having done that, we may not bid for the next vehicle but we may work with local industry players as partners as they now know our capabilities. Not all US defence companies, for example, produce vehicles. But they do system integration - add electronics and weapons - so this is where we can complement them.' And notwithstanding the Bionix disappointment, the US has become the biggest market for ST Engineering, accounting for 33 per cent of the group's revenue.

Doing things right, and not taking short-cuts, is the best way to win over the market, Mr Tan says. 'We want the market to trust us. If there is a thing that cannot be done, we'll explain to you why it cannot be done. We are not always right, but we give you an honest view of what can or cannot be done and we are open to your suggestions. We want people to see us as a trustworthy partner, who will not just take a project because we want it but who will take a project and make sure you understand where the limits are, what the challenges are, and the value we bring to you. We want people to know that ST Engineering is a partner, a trustworthy partner, not just a buyer or seller but a partner that will go in with you and take risks with you. We will be there in the long haul with you.'

This approach has helped ST Engineering build an enviable reputation in the market place. Over the past 40 years, ST Engineering has evolved from a local company to today's integrated and globalised company with a work force of 18,000 worldwide, with over 100 offices in 20 countries, including the US, Panama and China. The group's core capabilities are well recognised in four areas - land systems, electronics, marine and aerospace. Building on its defence heritage - it is the principal supplier to the Singapore Armed Forces - ST Engineering has established significant commercial operations which now account for 70 per cent of revenues.

'In the early days we were what I call metal bashers. You have got to start somewhere, and it was more hand and leg work. The second phase was around the 80s when we looked at upgrading and modification work, a bit more engineering work, a bit more value added. The third phase was in the 90s when we started to develop our own system, our own solutions, and our own intellectual property. That was when people started to see us as a creative, innovative company as we developed our own unique solutions.

'In the next phase for ST Engineering, people will no longer see us as takers in the market, and we will no longer be one that waits for the market to change. I strongly believe that we have now reached a stage where we can be a leader in some areas, where we can shape the market, and where we can position the market.'

When he took over as CEO in February 2002, Mr Tan felt that the group was not bold enough in making acquisitions. 'We didn't do many acquisitions in 2001, 2002. Our strength was in buying assets or companies that were in trouble. But it was also our weakness because we were always waiting for an opportunity to arise. You are waiting and you are not making things happen, so I said you cannot grow just by sitting down. We must have a M&A team and consciously have a strategic plan.

'The staff were reluctant to buy good operating companies because they believe that the seller makes all the money, which meant they win and we lose, instead of seeing the deal as a win-win proposition. The seller has reached a point where he could not grow the company any more while we are able to take the company to the next level. That is a win-win deal. We can make money just like the seller.'

Mr Tan then led ST Engineering on the path of actively pursuing strategic acquisitions overseas to diversify its business geographically and its revenue stream. While it is linked to Temasek, the Singapore investment corporation, it has so far avoided the controversy that have dogged some other Temasek-linked investments overseas.

Mr Tan says he does not have lessons to teach the rest of corporate Singapore, but for ST Engineering, it is again all down to the process. 'I stay below the radar. You don't see me talking about companies that I want to look at specifically. I will tell you our areas of interest in general. But I don't tell you about my targets.

'I don't want people to speculate. I also go below radar because at the end of the day, I like to develop relationships with companies before I even start to do any M&A. I think it is important for us to know the people, the management, the culture, the alignment, the confidence in knowing each other. Typically, we spend 12-18 months to get to know each other before we even consider whether it is really worth buying. And you don't see us going in a big way to publicise it.

'One thing for sure is that we are very sensitive to local issues. Firstly, even before we buy, we want to be sensitive. We always ask whether there are potential regulatory or nationalistic issues. If we sense that potentially there is a problem, we may not even want to do it because it may turn out to be too expensive and too difficult to bridge it. We always use our colleagues in those markets because I think some things are easier with their own people.

'We will tackle the politicians, we will tackle the owners, and if necessary, the workforce. We want to make sure that we hear them and that we are sensitive to them. Address the issue upfront if we can, and if not, we have to give certain assurances.

'Our investment in SAS Components could have created a stir in Europe, but it didn't, because we told them, 'Let's focus on this. Let's not focus on the outside world, and we don't have to publicise it. I know we have to tell the union, but let's manage the process sensitively'.'

Does it trouble him that ST Engineering is in the business of making weapons that can be put to use in quite destructive ways? His answer: 'We save lives, we don't kill lives. ST Engineering is not about just a weapons supplier but more. That's why you use the word defence. It is about how you can save lives, and how you can prevent conflicts for example. In our own way, we prevent tensions. I think that is what Singapore is all about as well.'

Mr Tan points out products from ST Engineering which have helped to save lives, including the Sars test kits and the Bronco supply carriers used in the tsunami rescue operations. 'So I think it is beyond just weapons, it is about coming up with a solution that can prevent catastrophe, looking at solutions to save lives. Many of our solutions are utilised in disaster recoveries.'

An engineer by training, Mr Tan graduated with first class honours in marine engineering from the University of Surrey, UK, after securing a Colombo Plan scholarship. In 1993, he was conferred with Master of Science (Management) from Stanford University, USA. He also attended the Advanced Management Program at Harvard University in 1999.

Mr Tan has spent more than 26 years at ST Engineering, his first and only job. He began his career with the group as an engineer in Singapore Technologies Marine Ltd in 1981. During his 16 years there, he advanced from one senior position to another and last held the appointment of executive vice president for yard and business development.

Prior to his current position, Mr Tan held the positions of ST Engineering's group president (June 2001), president and chief operating officer (July 2000), and COO (February 2000). Before these various positions in the corporate office, he was president of Singapore Technologies Kinetics Ltd (formerly known as Singapore Technologies Automotive Ltd) from September 1998. He was named president, corporate affairs, to assist in the integration of the various sectors of ST Engineering during its formation in 1997.

He says that being very much an insider and his exposure to various positions have given him an intimate knowledge of the operations of the group. But it has also not kept him from making tough calls.

He says: 'I assumed the job (as CEO) on Feb 20, 2002, and I already saw that customers' needs were changing. I was a bit worried about one or two of our businesses and one of them was an ammunition plant, about the things they do. Things were getting smarter but we were doing more conventional requirements. At the same time, those were people who had been with the group for a long time, since 1967, 68 or 69.

'The difficulty was that we needed a changing model. So there was the issue for me, 'Do you do the right things or do you do things right?' Doing the right thing was to restructure, retrench, reshape. Doing things right could be continuing to execute things very well, but where are the customers? In October 2002, I had to retrench 460 people.

'It was difficult because you could say that it was not their fault, because the market shifted but we didn't shift fast enough. But at the same time, we had to do the right thing for the company. It was very difficult because it happened in less than one year after I assumed the CEO post. It was not very popular when you did things like this.

'It was the most difficult decision in my life. No one knew how much I agonised over it, because I didn't show it openly. But deep inside, I could not accept having to ask staff to leave. I hope those affected understood why I had to do it and will forgive me.'

Indonesian with the Midas touch

Singapore's The Business Times has a profile of a relatively unknown Indonesian tycoon Chairul Tanjung, who is a banker and media owner. What is interesting is that while many bigger Indonesian names collapsed during the Asian financial crisis in 1997/1998, he emerged as a new kid on the block then.

Of course, business in Indonesia is deeply intertwined with politics. And political fortunes can often change suddenly and make a big difference in the land of volcanoes.

Man with the Midas touch

Among business circles in Indonesia, he is hailed as one of the fastest-rising stars, with close links to the new political elite. Yet little is known about the media-elusive tycoon. In his first extensive interview in any media, Chairul Tanjung grants LAUREL TEO a rare glimpse

THERE is no such thing as second-best for Chairul Tanjung. His six-year-old Trans TV station may not boast Indonesia's biggest market share nor the highest ratings, but it claims the heftiest profits.

Likewise, his Bank Mega is not the largest, but its earnings growth is among the handsomest in the financial industry. Last year, Indonesia's No. 12 bank, with assets of US$4 billion, raked in US$63.7 million in pre-tax income for the first nine months, nearly three times as much as in the previous year.

The bank also boasts one of the most sought-after credit cards in town. 'All the top bankers carry a Bank Mega card in their wallets,' he proffers this morsel of information with pride.

It's an open secret that the card offers some of the best discounts for an assortment of top-end fashion and dining outlets, a number of them managed under the lifestyle arm of Mr Chairul's sprawling CT Corporation, previously known as the Para Group of companies.

In just over two and a half decades, he has amassed a wealth estimated at US$450 million to US$565 million, catapulting him into the 18th spot in the 2007 rankings of Indonesia's richest by Forbes Asia magazine, and 15th in Globe Asia's rankings.

No wonder the local media dub him the Golden Boy. Just 45, his knack for making profit is near legendary.

As he folds his lanky 1.83 metre frame into an armchair in his office, he tells BT over a two-hour interview how he learnt to turn dust into gold.

Despite his perpetually tight schedule, he appears relaxed, speaking in his characteristically affable manner as he takes his time delving into details. But for all his languid charm and easy manner, he is methodical in his narration, hardly brooking any interruptions.

'I'll tell you later,' is his firm response, should you jump ahead of his narrative or try to veer off course with premature questions.

He had a humble start. Born on June 18, 1962, he was the second of six sons. A seventh child - a girl - died while still a child.

His journalist father, a Batak from North Sumatra, had migrated to Jakarta early in life and married a Sundanese of West Java origins. While life for the young Chairul was not the harshest, neither was it a bed of roses.

By the time he enrolled in a dentistry course at the University of Indonesia in 1981, his father's meagre salary could stretch no further, and the teenager had to figure out how to pay his own way through school. Thus was launched a career in business. 'Actually, at that time I didn't see it as business at all. It was not to make money, just to survive,' he recounts matter-of-factly.

Out of sheer desperation, the college freshman hit upon an idea. 'One study guide cost 500 rupiah at the photocopy shop. But I knew a friend with a hand printing press that could do it for 150 rupiah. See, networking is very important in business,' he exhorts with a merry chortle.

The pair teamed up to sell copies at 300 rupiah each, double the cost price, but still cheaper than the market rate.

The young Chairul made his first 15,000 rupiah - a paltry sum no more than a couple of dollars, but priceless in terms of a mental boost. 'That was when I realised: it's much harder to make your first dollar than your second million. With the confidence of that first dollar, it's much easier to continue,' he muses.

From manuals, he progressed to hawking T-shirts, stickers, bags and even materials for practicals. By his fourth year, he was the envy of his class. He had purchased his first car - an eight-year-old Honda Civic.

'Oh, at that time, I was very proud of it. I drove all my friends to Pasar Baru - something like your Orchard Road in the old days,' he says with a wry chuckle. 'Most important rule, they must wear sunglasses . Young man, want to look cool,' he quips, showing he is not above poking fun at himself.

Along the way, he found time to run for and win the student government presidency. In 1984, the competitive overachiever also beat hundreds of thousands across the country to pick up a prestigious national award as the top all-round college student.

When he graduated in 1987, Mr Chairul was faced with two choices. 'I could practise dentistry in government service. The salary won't be high, but I'd get a house and a comfortable living. But it won't be enough to support my parents and four younger brothers. They were still studying. So I continued with business.'

In this and many other decisions, it becomes clear that he is guided by a ruthlessly pragmatic maxim: 'What I like or dislike is irrelevant. There's no meaning 'like'. It's about what needs to be done.'

Going solo

He set up a shoe manufacturing business with two friends and was soon churning a tidy profit. But by 1994, he was hungry for new challenges. He sold his shares to his partners to venture solo into finance.

'At that time, I was still a nobody. But that was the happiest time of my life. I was not so busy, had enough money, and still had my privacy,' he recalls almost ruefully.

A chance came up a year later to buy over Bank Karman - a relatively modest outfit. Still only in his mid-30s at that time, he grabbed it and renamed it Bank Mega.

Then came the Asian financial crisis, which finally thrust his business into the big league. While even once indomitable conglomerates began collapsing one by one, Bank Mega not only weathered the storm, but chalked up a record profit in 1998. It multiplied earnings by a staggering 20 times to 240 billion rupiah - a sum that could have bought out Indonesia's No. 1 car-maker Astra at that time, Mr Chairul recounts gleefully.

'But I didn't take a single rupiah of the money. Everything was injected back into the bank to enlarge the capital base. That's how I grew the bank,' he says.

He credits the financial crisis with freeing up Indonesia's business sector. 'Before the crisis, Indonesia's business map was fixed. At the very top, you had a layer of the largest conglomerates. Nobody could touch them. Nobody had any hope of catching up. There was simply no opportunity.'

But the fatal combination of the crisis and Suharto's downfall dissolved the old patronage system between the political elite and their business cronies. As monopolies crumbled and the former business bigwigs retreated to lick their wounds, the field lay open for newcomers. 'It was an extraordinary opportunity for us to grow,' recalls Mr Chairul.

One major sector thrown open was TV broadcast, previously dominated by the Suharto family.

Mr Chairul secured a licence and introduced a new business model. 'When I first built my TV station in 2001, everyone said I was crazy. Because I constructed all the production facilities and put everything in one building,' he says. The convention in the Indonesian TV industry is for stations to buy external programmes and make money from selling ad-time. Mr Chairul insisted, however, on having most of his Trans TV programmes produced in-house, allowing him to control the content and cost structure.

He has the last laugh. Trans TV is now peerless in the earnings chart. Its profit, reveals its proud owner, is more than double that of runner-up RCTI, even though the latter claims the largest audience share.

In 2006, Mr Chairul's media empire expanded with the acquisition of 55 per cent of the loss-making TV 7, previously controlled fully by Jakob Oetama's Gramedia group.

'Five years they managed, five years of losses. Pak Jakob had to pump in 200 to 300 billion rupiah every year,' he says. 'Pak' is a respectful Indonesian term of address for men.

Within a year of the takeover, TV 7 - now renamed Trans 7 - leapt into the black for the first time. 'The profit is big enough, something like a reversal of the losses. Just change the 'minus' to 'plus',' says Mr Chairul with a grin.

On the political front his links are impeccable. He is widely known to be in an ambitious joint venture with Vice-President Jusuf Kalla. Both clans are developing a 12.7-ha integrated mega theme park, resort and shopping haven in Makassar, capital of South Sulawesi and the hometown of Mr Jusuf.

Just on Tuesday, Mr Chairul and his wife joined the VP on a three-day umrah or minor pilgrimage to Mecca. The trip came at the personal invitation of the Saudi King. Earlier in October, Mr Chairul reportedly shuttled to East Java with the President to visit a village under threat from a volcanic eruption.

His stunning success and new political links stand in stark contrast to his modest beginnings, which has led to mutterings in some circles. Another man of clout is now sometimes spotted by his side - Anthony Salim, who heads the powerful Salim Group. Mr Chairul is clearly aware of the gossiping about him, and confronts the issue good naturedly. 'It's OK, no problem,' he says in his easy drawl.

Both the VP and President Susilo Bambang Yudhoyono got chummy with him long before they became political top brass. As fellow businessmen, he and Mr Jusuf had hobnobbed for years on the commercial circuit, he explains. Dr Yudhoyono became a friend when he sat on the board of advisers for the National Badminton Association while Mr Chairul was heading the sports body several years ago.

No government dealings

'We are just friends. Up until now, I have not done a single business with the government. Not a single contract,' he asserts, in an attempt to register that he was not in the habit of seeking or receiving political kickbacks.

Neither does he harbour any political ambition. Sweeping aside rumours of a Golkar affiliation, he says he is not a member of any political party.

Turning to the Salim rumours, he clarifies that he is a partner with, rather than proxy for, Anthony Salim. The pair are 50-50 co-investors in Grandiflora, a vehicle that controls more than a quarter of the shares in Singapore-listed healthcare company Asiamedic.

Their ties go back to the Asian financial crisis. When the Salims' flagship Bank Central Asia (BCA) ran into trouble a decade ago, it was Mr Chairul's Bank Mega that bailed out BCA with some crucial lending, he says, adding that he also lent funds to a couple of other Salim outfits.

The secret to Mr Chairul's near-perfect track record harks back to the solid grounding from his days in the shoe business, what he calls his industrial training.

He works hard, runs a tight ship in operations, and takes an extremely patient and long-term view in investment. 'In industry, you cannot collect profit immediately, but must always invest it back into your business, upgrade technology,' he says.

The self-confessed workaholic is stumped when asked to list his hobbies. Outside of work, he spends what free time he has with his wife, 11-year-old daughter and five-year-old son.

What about golf? 'Too many holes, too many balls, too many sticks.' His business associate translates this later as 'No time.'

But lest you pigeonhole him as someone who is driven purely by money-making, Mr Chairul reveals an idealistic core that reminds you of the reasons he became a student leader.

It was his faith in his country that kept him here during the financial crisis, a faith that was ultimately rewarded, he says.'For me, I'm always optimistic about this country. That's why I never left.'

Other bank owners panicked and fled to places like Singapore or Hong Kong, leaving bank managers and ground-level staff rudderless. Their panic sparked a mass exodus of customers.

At Bank Mega, however, Mr Chairul as head honcho rallied the troops and got the staff to work doubly hard at drawing customers and collecting deposits. 'Other banks were drained, but our bank kept collecting. And we had no competition at that time,' he recounts.

His nationalistic passion has led him to chair the Indonesia Forum Foundation (YIF), a grouping of the nation's top academics, bureaucrats and business leaders. Last year the YIF produced a Vision 2030 for Indonesia. Among the targets: Indonesia is to become a top five economies by the year 2030, and there will be at least 30 local companies in the Fortune 500 list.

While some critics have panned this as an ambitious pipedream, Mr Chairul prefers to see it as idealistic goal-setting. In fact, by May this year, the YIF is following up with an action plan for the mission.

For he lives by this creed: 'We have to be the best player. Otherwise, there's no need to play.'

Next stop, Singapore

CHAIRUL Tanjung has earmarked Singapore as the regional hub for the expansion of his CT Corporation. Teaming up with the Economic Development Board, he will start by introducing a series of luxury furnishing and accessories brands to Singapore.

The Trans Living group has about 10 brands currently, holding their distribution rights for the whole of Asia, not just Indonesia. It has already set up a showroom in Singapore for Baker furniture, an exclusive top-of-the-line handcrafted collection with clients drawn from the world's jet-setting crowd. Familiar names include Cindy Crawford and Tom Cruise. Other upcoming brands include Armani Casa, Molteni & C, as well as Donald Trump.

Trans Living falls under Trans Corpora, one of the three distinct arms of parent company CT Corporation. A second arm is CT Global Resources, a new venture started just last year to explore palm oil cultivation and agribusiness research.

The final arm, Mega Corpora, groups together all the financial services, such as Bank Mega, Bank Syariah Mega, and insurance and motorcycle-financing units.

Of the three arms, Trans Corpora is the most complex, as it covers a broad range of media, fashion, F&B, travel and property interests grouped into three divisions. Upcoming projects in Indonesia include a fully air-conditioned theme park the size of five football stadiums, as well as a luxury airline. Mr Chairul says fashion and F&B will follow the furnishing business soon in coming to Singapore. The idea is to grow these from Singapore to Hong Kong, China and other major Asian destinations.

Business aside, Mr Chairul is also planning to move his children to Singapore next year for their studies. He and his family are already permanent residents here, says the 45-year-old, who recently purchased a property in the Nassim Road area.

Ever the far-sighted man, he has already started his 11-year-old daughter and five-year-old son on Chinese lessons. Word is that he is eschewing the usual Ivy League route for his elder child, aiming instead to send her to the University of Beijing.

Eric Khoo up close and impersonal

There's plenty of stuff about his movies but very little about Eric Khoo the man and his family in the latest Raffles Conversation in The Business Times today.

There was a glimpse about his personal life: He did not look to his family to fund his films, how he got interested in films and his colourful description of his children. But it's hazy in this article as to what inspired the cinematic style of one of the richest men in Singapore.

According to a Wikipedia entry, Khoo's films explore a set of hard-hitting themes, including a sense of alienation in contemporary Singapore, nostalgia for a humane past, and the centrality and complexity of human sexuality.

"Influenced by Martin Scorsese's Taxi Driver, Khoo often features a complex anti-hero as the protagonist of his films: the lonely old man who commits suicide on his birthday in Symphony 92.4, the pork-seller in Carcass who takes comfort in television dramas and regular sex with a prostitute, the outcast necrophilic hawker in Mee Pok Man, the model citizen who breaks down in 12 Storeys - all dysfunctional individuals struggling to cope in a rigid and yet fast-paced society administered by harsh norms."

And why was the rich man so engrossed with marginalised characters in society? There's plenty of interesting characters in the upper crust of society too.

For instance, the Khoo family history is as colourful as Eric's movies. Eric was said to have inherited the lion's share of his family fortune following the death of Khoo Teck Puat, who was the richest man in Singapore, in 2004.

The bulk of the family wealth probably came from the sale of its 12% stake in Standard Chartered Bank to Singapore government investment arm for an undisclosed sum in 2006. The stake was estimated to be worth US$4 billion then. In addition, the family controls Singapore landmarks such as Goodwood Park Hotel.

Will Eric make a movie about the rich in Singapore as well?

Eric Khoo's movie magic
Award-winning filmmaker tells PARVATHI NAYAR why his movies are personal and always about Singapore

'I WOULD love my films to travel and all that, but why not keep it as something about ourselves, keep it local? We are, after all, a nation filled with 'tasty' characters,' says Singapore's celebrated filmmaker Eric Khoo, explaining why all his movies are personal, are centred on Singapore, and are filled with intriguing Singaporean protagonists, including his latest, in Tamil, titled My Magic.

As a director, Khoo is credited with jumpstarting the Singapore film renaissance in the mid-90s with his first feature film, Mee Pok Man (1995). He is also credited, as a producer, with helping keep alive Singapore's nascent film industry, by encouraging new Singapore talent such as Royston Tan.

Khoo's contributions to Singaporean cinema have not gone unnoticed. Born in 1965, Khoo was the first recipient of the Young Artist's Award for Film in 1997. Ten years later, he was awarded the nation's highest arts honour, the Cultural Medallion in 2007.

Talking about it makes him nostalgic. 'When I was told I had got the award, of course I was very happy. As someone who always looks at dates, timelines, and reflects on the past, it brought to mind the time when Haresh Sharma and I won the Young Artist's Award. The Cultural Medallion winners then seemed pretty old to me. I remember wondering whether we would have to wait so long to receive that honour, if we would ever receive it, and if we would still keep at our craft. As passionate as I am about film, you never really know if you can carry on. So the really important thing is that 10 years later, touchwood, we are still at it.'

In Khoo's books, it is first, foremost and finally, 'all about the work'. 'Making a film is like a father-and-son relationship, you do the best you can for your 'child', then it has to go out into the world, where you hope it will inspire people. So you don't make films to win awards, but, of course, it's great when you get them.'

From director to producer

Receiving the Cultural Medallion doesn't bring with it the burden of 'responsibility' - a word many creative people find anathema anyway - still, it is a validation that 'I've been on the right track'.

The cinematic track that Khoo has travelled has been somewhat unusual. He switched from direction to production despite his films doing well - his second feature, 12 Storeys (1997), picked up a clutch of awards, including the FIPRESCI Award, and was invited officially to participate in the 50th Cannes Film Festival.

'I took a backseat after that and turned to film production. Why? Because I was interested in the work of other Singapore filmmakers. I wanted to 'feel' what the younger crop here had, and how I could help them. As a producer, you have an interesting aerial perspective rather than being on the ground level, at the shoot.'

Through his company, Zhao Wei Films, founded in 1995, Khoo was executive producer for well received TV series like Drive (1998) and Seventh Month (2004); he was also the producer for a range of successful films such as Jack Neo's Liang Po Po (1999), One Leg Kicking (2001) and Royston Tan's 15 (2003) and 881 (2007).

Still, 'after an absence, you miss directing', he says. 'I was writing and looking at film projects in those seven years, but didn't want to direct them just yet.'

Khoo emerged from his director hiatus in 2004 with his third feature Be With Me. Friends and colleagues in the cinematic world such as film critic Tony Raynes were supportive. 'It was nice to have people on your side, a little group somewhere that wanted you to make another film,' says Khoo, but admits to feeling 'rusty' and not a little nervous at the time.

He needn't have worried. Be With Me received lots of positive reviews, awards and foreign distribution deals. Impressively, it was selected as the opening film for the Directors' Fortnight Cannes 2005. Khoo may not have been a prolific filmmaker, but all his films have made lasting impressions.

Be With Me weaves together three separate stories that interlock only through a desire shared by the different protagonists - to be with the one each loves. The stories are fictitious, except for that of Theresa Chan.

'The person who nagged me the most to make Be With Me was Theresa Chan, whom I met in the summer of 2003 at a wedding dinner. I could tell that she couldn't hear and see, but she was very animated and I thought, 'What an inspiring lady'. She asked who else was seated at the table and when it came to my turn, she was told I was a filmmaker. She had heard of me; then she looked towards me and said, 'you have to make a film about me'.'

Khoo said to the person who was 'translating' for Ms Chan: 'Tell her I'll make the film if she agrees to act in it. He writes this on her hand, right; within a second, she lifts her glass, points it in my direction and says 'Cheers, we're on'.'

It was an extraordinary moment. Before this incident Khoo had been thinking about silent movies; suddenly, an appropriate subject for such a film had fallen, unsought, into his lap.

Khoo shares with obvious affection Ms Chan's tenacity in pursuing the film. Eventually, 'her life story was so inspiring that I decided to make it, documentary style, and fit it with the two fictional strands I had in mind'.

'The actual inspiration for Be With Me came from a short conversation I had with my 13-year-old nephew from Paris, who told me how much he was in love. I thought it was so cute. I was a bit drunk at the time and it got me going, thinking about first loves - and of a story about love in youth, middle and old age, made as a silent film, to venture back to the style of my short films, which were basically silent.'

Khoo likes to follow the rhythm of the script, but, he laughs: 'I am quite lazy, I don't like writing dialogue. What I enjoy is coming up with the skeleton, and then let someone else flesh it out for me.'

A lot of the 'dialogue' in Be With Me is informed by the Singaporean passion for communicating via SMS, 'which means we can keep in touch easily, but as easily cut someone out of our lives'.

The success of Be With Me prompted an endless round of queries about Khoo's next film, on different occasions over the past few years, such as in South Korea during the release of Be With Me there, or at the retrospective of his films staged by the Seoul Independent Film Festival, or the Jeonju Digital Film Festival for which he made No Day Off, the story of an Indonesian maid.

Khoo decided he would first 'make a food film that revolved around three stories, including that of a food critic'. 'One night, when I was talking about my concept in my kitchen, my eldest son, 13-year-old Zhao Wei, walked in and overheard the conversation. He said, 'You are doing another three-story film like Be With Me. Dad, have you run out of ideas? You have to re-invent yourself.' Then he walked out.'

Khoo heeded the advice; appropriately enough, he went back to another story he had in mind, about the love between a father and son, about magic and fire-eaters.

My Magic, the film that Khoo is now working on, is based on a real person, a fire-eater named Francis Bosco. 'I met him some 10 years ago at a free booze party at Mohamed Sultan Road. I remember this mountain of a man coming through, eating fire; when he passed by us, I could feel the heat.'

Intrigued, Khoo bought him a drink, and kept in touch over the occasional beer. When Khoo brought him to Wagon Wheel - the noisy bar where we are talking - five years ago, 'he scared the patrons by eating glass and making a piece of paper fly; everyone asked me whether he had a toyol or tame ghost with him'.

When we first talked about the film, at the end of November last year, Khoo was getting ready to shoot in early December 'and the script is not yet done', he chuckled. As My Magic's dialogue is in Tamil, he says: 'I won't know what's going on, so I've told Francis and Jathis - who acts as his son - you better get it right.'

Khoo has always trusted the actors with the actual dialogue. 'We do some workshopping, but after that, as long as the actors get the point of what is happening in that scene, you must leave them to say it in their way. It turns out so much better.'

Fast forward to the end of December and he shares: 'It was my fastest shoot to date - we wrapped in eight days and will shoot one more day in January for the magical ending scene. It was a joy working on my first Tamil language film.'

As to why he is in the movies at all, he says: 'I blame it on my mother! Every week, she'd watch two or three movies, and drag me along to them, even though I was just two years old. My childhood was all about genre films such as James Bond, horror and spaghetti Westerns. A pivotal movie in my teens was Taxi Driver - I then realised cinema was more than just monsters or dinosaurs!

'As a little boy, I would draw comics, make up stories. One day, when I was looking around for my mum's old comics, I came across her Super8 camera. The camera still had a cartridge of film, so I just put in batteries and started to film.'

A breakthrough moment came when young Eric read about stop motion photography in a magazine. He decided to enlist the services of his fully articulated action figure GI Joe. 'I'd spend afternoons just tweaking the figure and filming it, to make a stop motion animation film where my GI Joe came alive. I'd show it to the old folks who would say 'How do you do it?' It was like my magic.'

Much later, all grown up, he pursued his story-telling passions through 'shooting commercials, and doing cartoons of a character called Condom Boy for Philip Cheah's Big O magazine. My cinematic career owes a lot to him and the Singapore International Film Festival (SIFF); without the Singapore Short Film Competition, I don't think there would be any of us filmmakers. All of us started by making shorts that won awards there. Importantly, foreign film festival programmers would attend and see our stuff. '

Khoo's Barbie Digs Joe became the first Singapore short to travel to festivals abroad, but the short that gained him instant headlines, a ban in Singapore, and a Special Achievement Award at the 1994 SIFF was Pain (1994), about a sado-masochist. The award came with a sponsorship deal for his next film. Rather than a short, he convinced his sponsors to let him make Mee Pok Man. Such incident-chains of cause and effect convince Khoo that 'there's such a thing as God and fate and destiny, things happen for a reason, and one thing does lead to another'.

Though born into a wealthy family - Khoo is the son of the late billionaire Khoo Teck Puat - he did not look to his family to fund his films. 'I could never get money from someone who did not believe in the medium, in my film project. That would be totally wrong,' he says, adding with a grin: 'I did ask my father for some money to make a film once, and he offered me $2,000!'

Khoo has always worked on tight budgets, thanks to short shoots and limited locations. Mee Pok Man was done for under $100,000; though investors were interested after its success, Khoo nevertheless made 12 Storeys in 14 days at a single apartment block for $280,000. Be With Me was about $300,000 and while My Magic is not finished, it is unlikely to exceed those figures.

As for the future, it sure looks busy. Last year, Khoo was appointed a board member of the Media Development Authority and the NYU Tisch School of Arts Asia. Projects beyond My Magic include a new comic called The Table, a series of vignettes - with a twist - based on an old coffee shop marble table, as well as plans to produce films for Royston Tan and Brian Gothong Tan.

'We will always support emerging directors of Singapore, but going forward, Zhao Wei films will also work collaboratively, with filmmakers outside Singapore as well.'

As to his own next film, perhaps horror is a genre he will try his hand at. 'I'm a real horror junkie,' he admits. In a nicely Singaporean blend of old and new, Khoo is both superstitious and a state-of-the-art techie. So, 'I wouldn't do a film with ghosts and spirits - I'm too scared. My biggest superstition is that it's too dangerous to direct a supernatural film, you never know what will go wrong with it.' But equally, 'I embrace technology', says the director who is a known advocate of digital film. 'For me, it's going to be high definition from now on.'

Leisure pursuits

Movies, music, visits to toy shops with his sons, cooking at the weekends - these are some of the ways Khoo unwinds. 'I love cooking,' says the director, who enjoys playing with sauces, stocks, soups, eggs. One Khoo special is a nutritious pasta with tomatoes, bacon, chillies, garlic and anchovies; another favourite is the perfect soft-boiled egg: 'I know how to make that, a lot of people don't,' he says with obvious relish.

Khoo has four sons, and he's very involved in their lives. 'They are gorgeous and I love being a Dad. My sons actually inspire me a lot. They are just like the Beatles - the eldest is like Paul McCartney and he is already making short films on his computer; the second, James is like John Lennon, the rebel; the third one, Christopher, is the dark horse like George Harrison; and Lucas is the joker who can get away with murder, just like Ringo Starr.'

Khoo's love for the movies is a passion he seeks to share with his kids: 'When my kids were small, I'd show them movies that made an impact on me, like Saving Private Ryan, and ask them to watch it for style and cinematic expression. And play Beach Boys music to it, so it was not scary.'

As his three older kids are into magic, they were the perfect sounding board for his newest film about real bonds and fake illusions. Khoo shares with pride how 10-year-old Christopher read the My Magic script, then 'before going to sleep, he came trotting in and said 'I like it. I can't describe why, Papa, but there's really something there.' Thanks to what he said, you know, I slept really well.'