Singapore still searching for a star
By Paul Mackintosh - 22/06/12
Singapore looks to be star-chasing again. According to Bloomberg reports, charismatic Alibaba Group Holding Founder Jack Ma has laid down the carpet for Temasek Holdings to pick up more of his renowned e-commerce platform as part of the planned buyback of Yahoo Inc’s stake in his business. Yes, it may be a great opportunity for Temasek, but the SWF, and Singapore as a whole, has seen poor returns before when star struck.
In October 2010, Temasek, alongside SWF peer China Investment Corporation, bought US$500 million of convertible preferred shares in Chesapeake Energy Corp, investing alongside investee Hopu Investment Management Co, which picked up another $100 million. Yes, the same Chesapeake now under investigation for the entanglement of – also charismatic – founder Aubrey McClendon’s personal affairs with the company finances. In spring of that year, Temasek invested $150 million in South Africa-based platinum miner Plating Inc, controlled by Brian Gilbertson, former head of BHP Billiton Ltd and yet another charismatic company leader (interestingly, the same year it aborted the appointment of another BHP Billiton alum, Charles “Chip” Goodyear, to replace CEO Ho Ching).
Mr. McClendon has only just been deposed as Chesapeake’s CEO, while its shares have fallen 14% so far this year. But still chasing the stars, Temasek is now reportedly backing the new $5 billion+ Asia fund from RRJ Capital Ltd, run by former Goldman Sachs (GS) Group Inc banker Richard Ong, previously partner of Hopu founder Fang Fenglei. According to Bloomberg, Mr. Ong’s team includes his brother Charles, previously Temasek’s senior MD of special projects.
If Temasek needs one warning of the potential consequences of backing loosely controlled and highly assertive individuals, they need only look to the delayed SGX IPO of Formula 1, hitherto touted as a big win over listing rival Hong Kong. Former Bayern LB banker Gerhard Gribkowsky has just sensationally confessed to taking a bribe from F1 chief Bernie Ecclestone, who himself has testified about the same incident under an immunity agreement. Mr. Gribkowsky reportedly claimed that the bribe was paid to ensure that F1 went to CVC Capital Partners. And this is the listing client that the SGX, still tarnished by the S-chips scandal, sought so hard to attract.
Perhaps this Singaporean love of star chasing is understandable, though. For all its loud commitment to entrepreneurialism, has Singapore produced one iconic business leader to match Mr. Ma, or Mr. Ecclestone, or Hong Kong’s Li Ka-shing? On the other hand, given such figures’ power to destroy as well as create value, that may be just as well.