Hotel Property LTD Scandal
- Lets refresh some momeries.....my brothers and sisters
THE HPL SAGA -- Part 1: All in the LEE Family
The Hotel Properties Limited episode that sparked off a political
storm in Singapore in 1996 has been buried alive by the PAP. But its
ghost will continue to haunt those involved.
It all started when the Stock Exchange of Singapore (SES) censured a
publicly listed property development company called Hotel Property
Ltd (HPL) for not seeking shareholders' approval for the sale of
some of its condominium developments at a discount price.
Dr Lee Suan Yew, Lee Kuan Yew's younger brother, was on the board of
directors of the company. He had purchased a unit in a condominium
project developed by HPL called Nassim Jade.
Shareholders of HPL had been grumbling about the way business was
conducted in the company especially when it came to dealings with
the Lee family. Many of the shareholders were waiting to buy units
at the said project. When the launch of the property never came to
pass, the shareholders saw red and demanded an explanation.
The stock exchange authorities quickly announced that HPL had
breached regulations. One day later, Lee Kuan Yew and his son, Lee
Hsien Loong, publicly revealed that they too had bought HPL
condominiums. The story made headlines and started tongues wagging.
The story was then traced back to one Ong Beng Seng, a property
tycoon in Singapore, and Managing Director of HPL.
Ong had developed two condominium projects at the choiciest
districts of Singapore. One was the abovementioned Nassim Jade
situated where opulent and expansive embassies and mansions were
located around Nassim Road. The other, Scotts 28, was at the heart
of Singapore's shopping and tourist district Scotts Road. Both
projects consisted of condominum apartments valued at millions of
dollars per unit before the property slump.
More red faces
It was also revealed that not only had Lee Kuan Yew, his brother and
his son purchased these apartments, they were offered substantial
discounts to boot. The apartments were due to be put on sale on the
open market on 17 April 1995. Three days before the official launch,
HPL conducted a "soft launch" where a select group of potential
customers were invited to have first go at the apartments. This was
not exactly an unheard of practice amongst property developers. The
problem was that because HPL was a publicly listed company, it had
shareholders to account to. Rules under the SES Manual Listing
stated that approval had to be sought for transactions
involving "connected persons" of the company involved and those
persons' associates. The HPL did not seek the permission of its
shareholders. Suan Yew, Lee's brother, was a non-executive director
of the company.
At the soft launch, Madam Kwa Geok Choo, chose an apartment to buy.
She was quoted a price of $3,578,260 (or $1,583 per square foot) for
the apartment. This was a seven percent discount on the list price.
Buyers at soft launches are usually given only a five percent
Later, Kwa Geok Choo contacted her son, Hsien Loong, and told him of
the Nassim Jade apartments upon which he called Aunty Pamelia Lee,
wife of Uncle Suan Yew, and said that he and his wife, Ho Ching,
were interested in buying the property as well. Aunty Pamelia then
later came back to her nephew and offered him an apartment for
$3,645,100 a discount of 12 per cent or $437,412 on the asking
price. The Deputy Prime Minister accepted the offer.
This was not all. On the Scotts 28 condiminiums, similar offers and
purchases were made. Lee Kuan Yew and son bought two more units and
paid $2,791,500 and $2,776,400 respectively for them, each bagging a
five percent discount.
All in all, Lee Kuan Yew received from HPL a total of $416,252
whilst Lee Junior got $643,185 in discounts. All the purchases
amounted to more than $10 million and were carried out without
mortgages and loans.
It must be remembered that all this while, decisions of sales and
the discounts were carried out at the directors' level which
involved Lee Suan Yew. None of the shareholders nor the SES had the
slightest idea of what was going on.
And yet, this was just the tip of the iceberg.
It was later found out that Lee Kuan Yew's entire family was in on
the purchases. Daughter Lee Wei Ling, a medical doctor in a
government hospital; sister Lee Kim Mon; and his two other brothers
Freddy and Dennis; Kwa Kim Li, a niece of Lee; and Gloria Lee, Lee's
sister in law, all bought the condos at hefty discounts. Wei Ling
bought two apartments at Nassim Jade and was reported to have sold
one off for a tidy profit. Again, all these transactions were
carried out without the approval of the shareholders of HPL.
News was leaking out about the Lee family's purchases of the HPL
condominiums and the shareholders were getting increasingly alarmed
and disgruntled. When pressure was brought to bear on the
management, HPL decided to belatedly seek the approval of its
shareholders a full eleven months later.
The SES had no choice but to issue a statement censuring HPL for the
breach of regulations. It noted that some of the discounts given to
directors and their relatives in respect of the Nassim Jade units
were higher than those given to non-related buyers and that the
publicly listed companies have a duty to obtain the best price so as
to maximise the return to its shareholders.
In spite of this, there was no investigation nor inquiry, merely a
censure for the company. Meanwhile, Lee Suan Yew quietly resigned as
a director with HPL.
To date, many questions remain unanswered:
1. Who made the decisions to sell the apartments at such discounts
to the Lee family?
2. Who authorised Pamelia Lee to sell the units to her relatives?
3. How many more relatives or friends, apart from those readily
identifiable, bought the units through such connections?
4. Why did Ong Beng Seng, owner of HPL, offer the units, and
presumably the discounts, to the Lee family?
5. Why was there no enquiry into Lee Suan Yew's involvement in
The HPL SAGA -- Part 2: The Big Cover-Up
(Continued from Part 1: All in the LEE Family)
As the story began to build up and as more revelations came to
light, the pressure and embarrassment to Lee Kuan Yew mounted.
Dr Richard Hu, the Minister for Finance, then announced that he had
recommended to Prime Minister Goh Chok Tong that Lee Kuan Yew and
his son, Lee Hsien Loong, consider giving back the money they had
received in the discounts. Sensing that this might ease public
disquiet, the Lees agreed. The move backfired. People were now
asking why were the Lees returning the money unless they felt that
they had done something wrong. To make matters worse, Goh Chok Tong
refused to accept the money and instructed the Accountant-General to
return it back to the Lees. Talk was that Goh did not want the
Government to be involved with the money which might bring
complications later on.
Goh knew he had to do something about the situation if he was going
to remain untarnished. He then appointed the Finance Minister
Richard Hu and Monetary Authority of Singapore Deputy Managing
Director Koh Beng Seng to investigate the matter.
Despite the fact that Hu and Koh were not the most independent and
appropriate persons to look into the affair, the "investigation"
It was then that Goh Chok Tong announced that a parliamentary
hearing would be conducted for the matter to be debated "openly." At
the same time, Goh announced that if anyone made any inappropriate
comments about Lee Kuan Yew's purchases, in or out of Parliament,
Lee would not hesitate to sue. So much for an open debate.
The debate that never was
Just before the hearing took place however, HPL owner Ong Beng Seng
was reportedly forced by Lee Kuan Yew to call for a press
conference. He also defended the transactions saying that it was
good advertisement for HPL to have Lee Kuan Yew as a buyer.
If that was the case, why then did all the rest of Lee's family and
relatives also buy into the properties with substantial discounts?
Was there any marketing value to this? Why was there a need to offer
discounts to the Lee family when shareholders were straining to buy
In light of the property boom at that time, it would have been a
silly move to sell units at less than maximum price. Did he know
that Lee Suan Yew was offering units at discounts to his relatives?
Who approved these sales? Why were the shareholders' permission not
sought? It would seem that Ong would be asked to answer these
questions. But Ong invited only Singapore's local media to his press
conference so that troublesome questions by the foreign media could
Then came the parliamentary debate. Goh Chok Tong got up and
proclaimed that there was no impropriety on the part of Lee Kuan Yew
and Lee Hsien Loong in their purchase of the condos. Richard Hu
echoed Goh's sentiments and exonerated the Lees of any wrong doing.
During the parliament session, Lee started going on and on about how
much his wife was worth ($20 million in his estimate), how a hawker
selling char kuay teow would upon seeing him give two eggs intead of
one, and how tailors would be falling head over heels to tryito
clothe him. He said almost everything except answer the real
questions about the involvement of his whole family in the purchases
and the breach of regulations by HPL. He so intimidated the four
opposition members of parliament that none of them dared ask any
No questions allowed
At about the same time, a Chinese weekly magazine called Yazhou
Zhoukan (Asiaweek) interviewed Tang Liang Hong (who later joined the
Workers? Party to contest in the 1997 elections) for his comments on
the affair. Tang questioned, "Why wasn't this matter handed over to
the professional body like the CAD [Commercial Affairs Department]
or the CPIB [Corrupt Practices Investigation Bureau]? They are
government departments not only rich in experience, but also well-
known for being ?iron-faced with selfishness? [a Chinese phrase
meaning firm and impartial]. They would be more detached and their
reports would have been more convincing to the people. Koh Beng Seng
and Finance Minister Richard Hu are after all not experts in this
The result: both Kuan Yew and Hsien Loong sued Tang for making the
But Tang had made a significant observation. Richard Hu had not
submitted a written report as to the scope or the findings of their
investigation despite the gravity of the matter. Both he and his
assistant Koh Beng Seng failed to report the following:
Why father and son had not checked the size of their discounts, as
they claimed, despite the fact that they had bought the properties
for investment purposes,
Why Lee Hsien Loong said he did not know of the size of the
discounts he received depite the fact that he had in his possession
at the time he bought the unit a copy of the price list of Nassim
Why they did not obtain information from Lee Suan Yew or his wife
Pamelia as to what their roles were in the sales of the units,
Why they did not investigate into the circumstances of the purchases
of the units by Lee Kuan Yew's extended family,
Why the HPL had not sought the approval of the shareholders to sale
the apartments to the Lee family. This was despite the fact that the
SES had censured HPL for failing to do just that.
One country, two laws
Lee Kuan Yew has never failed to brng anyone under the glare of the
CPIB if there is a hint of corruption on his/her part. The late Teh
Cheang Wan, then Minister for National Development, was driven to
commit suicide when it was revealed that he had taken bribes for the
construction of Housing and Development Board flats. Another
official Wee Toon Boon was also punished severely for his role in a
corruption case. Glenn Knight, a former public prosecutor, was
charged and convicted for corruption in a business deal. During his
case, Knight suffered a massive heart attack and was incapacitated
for a period.
In the HPL instance, there is more than ample evidence for the
relevant authorities to commence an investigation into Lee's family.
When news broke about the Whitewater affair concerning U.S.
President Bill Clinton, an independent counsel was set up to
investigate the matter. No one was above the law. At least, not in
the U.S. In Singapore, however, Lee Kuan Yew cannot even tolerate
calls for investigation into his family matters. Alas, he and his
family are above our Singapore law.
Perhaps, the PAP should stop telling the world that it is so