Updated: DBS' Jackson Tai quits

Another CEO of a major Singapore corporation has thrown in the towel. Jackson Tai (pix from ST Interactive) will be stepping down from DBS Bank by the end of this year. The bank said in a statement that Jackson wants to spend more time with his family in the United States.

According to The Straits Times, the bank said Jackson's resignation was not due to its exposure to US subprime debt. The report said its shares fell last month after it said it had injected cash into a special-purpose vehicle that invests in risky debt such as collateralised debt obligations.

But not everybody is totally convinced about the official reason for his impending departure. The CEO position is definitely a hot seat. The Asian-American's predecessors - Frenchman Philippe Paillart and American John Olds - each didn't last more than 2 years. It's not bad that Jackson steered the largest bank in Asean for six years.

But many felt that the writing was already on the wall when Koh Boon Hwee was named chairman of the biggest bank in Singapore last year. Maybe it's a clash of personality. Maybe it's a clash of vision.

But could there be other factors? Could it have been a clash with the major shareholder of the bank, Singapore government investment arm Temasek Holdings? Could the management changes be a prelude to a merger between DBS Bank and another bank? The market has always touted Standard Chartered Bank, whose single biggest shareholder is also Temasek, as a potential bedfellow of DBS Bank.

One thing for sure: Jackson is not the first major Singapore CEO to quit in recent times. Lee Hsien Yang quit suddenly as CEO of SingTel last year and has since emerged in the unusual capacity as the new chairman/consultant of Fraser and Neave.

There's also a Temasek connection in the F&N story. Temasek is the second biggest shareholder of the soft-drinks bottler. Furthermore, Temasek's boss Ho Ching is Hsien Yang's sister-in-law.

Maybe, all roads lead to Temasek in Singapore.

Update (23 Feb 2008) -- DBS has since named another ang moh banker Richard Stanley to be the new CEO.

Double happiness

There is now another similarity between the political leadership of Singapore and Malaysia although the two countries split long time ago in 1965. Their current Prime Ministers, who assumed power after the turn of the millennium, have both remarried following the death of their first wives.

Singapore's Lee Hsien Loong, who succeeded Goh Chok Tong in 2004, married Ho Ching in 1985 following the death of his first wife. Malaysia's Abdullah Ahmad Badawi, who took over from Dr Mahathir Mohamad in 2003, and Jeanne Abdullah will hold their wedding ceremony this Saturday following the death of his wife two years ago.

While Hsien Loong's second marriage is old news, Badawi's badly kept secret has continued to hog the headlines. The Malaysian leader was cited today as saying: 'A happier PM can do a lot of good work.'

Can Badawi now do a lot of good work by resolving all the outstanding bilateral problems with Singapore?

The leaders of the two countries met on the Malaysian island of Langkawi last month as part of what was dubbed "durian diplomacy". There's been a lot of positive rhetoric on both sides of the causeway since then.

But there's been no concrete sign of a new political bridge to link the two countries that used to be one nation.

Singapore's Failed Coup?

So much has happened in Thailand ever since former premier Thaksin Shinawatra sold his flagship Shin Corp to Singapore government investment arm Temasek Holdings last year.

The deal sparked widespread protest over the non-payment of capital gains tax by Thaksin although it was a common practice in Thailand. Bangkok saw widespread protests and the unprecedented burning of effigies of Singapore PM Lee Hsien Loong and wife Ho Ching, who also heads Temasek. Incidentally, Temasek reports to the Finance Ministry, which is headed by PM Lee. The entire Singapore government machinery backed the Temasek deal despite the disastrous outcome.

That's not the end of the saga. The ageing Thai King backed the military in ousting Thaksin in yet another coup d'etat in the country's history. The military-backed government was incensed when Thaksin made a private visit to Singapore last week. Singapore defended its right to host Thaksin although it's highly questionable whether it was indeed a private visit.

While the saga unfolds, the basic question remains unanswered: Why did Temasek buy Shin in the first place? Although Singapore politicians have said ad nauseam that it was simply a commercial deal, nobody was convinced. Why did the Singapore government arm rush into a badly structured deal with the former Thai premier?

One sexy theory has since surfaced that could help explain the whole saga. According to the theory, the payment of $3 billion to Thaksin for his holding company was part of a quid pro quo to abandon Thailand's long-cherished dream to build the Kra Canal.

According to one wit, Thaksin had wanted to build the canal to resolve two issues at one go -- turn Thailand into a major shipping hub, and isolate the Islamic separatist movement in southern Thailand. A canal will literally divide Thailand into two distinct regions.

The canal project, which has been on the drawing board for more than 300 years, will have major impact on Singapore and even Malaysia should it take off. This is because ships can sail from South China Sea to Andaman Sea and Indian Ocean straight, bypassing Singapore and the Straits of Malacca. The role of Singapore as a shipping hub will be greatly diminished should the Thais finally build the canal.

But not everyone buys the theory. One counter argument: The costs outweigh the benefits of such a project. Furthermore, the time saved for shippers and liners is minimal, unlike the more crucial Panama Canal. Another counter argument: It would have been cheaper for Temasek's port operating arm PSA International to take a stake in the Kra Canal project should it materialise.

Whatever the truth is, events in Thailand are truly fascinating. It's got all the right ingredients for a Hollywood movie!