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Hotel Property LTD Scandal

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  • pauljrt
    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
    Message 1 of 2 , Apr 9, 2006
      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.

      Shareholders' anger

      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.

      Unanswered questions

      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
    • pauljrt
      More...... 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
      Message 2 of 2 , Apr 9, 2006

        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"
        went ahead.

        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
        the units?

        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
        be avoided.

        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
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