Singapore's heavy brigade

Singapore's heavy brigade holds foreign media to ransom with
litigation threats

MICAHEL BACKMAN
903 words
22 September 2004
The Age
© 2004 Copyright John Fairfax Holdings Limited. www.theage.com.au

'Uncompromising views, without fail" promises The Economist magazine in its advertising. Well, The Economist has failed.

On August 14, the London-based magazine published an unremarkable piece titled "First Singapore, next the world" on Temasek Holdings, the Singapore Government holding company that controls some 40 listed companies in Singapore. These companies have a market worth of around $S60 billion ($A51 billion), about a quarter of the local stock exchange's market capitalisation.

In turn, the companies have assets in Australia. Among them are the electricity transmission network for the entire state of Victoria and Optus, the country's second biggest telecommunications operator.

The Economist said in its piece that Temasek lacks transparency, that listed Temasek companies have significantly underperformed the stockmarket and that they typically operate in protected markets with favourable regulation. All of that is true. It also said that Temasek operated with a "whiff of nepotism". That may be true too, but who is to say?

Two weeks later, on September 1, The Economist printed an apology to the Lees. The offending article, the magazine explained, could have been taken to mean that the new Prime Minister Lee Hsien Loong and/or Lee's father Lee Kuan Yew were responsible for having Hsien Loong's wife, Ho Ching, appointed to head up Temasek, not on merit but "for corrupt nepotistic motives for the advancement of the Lee family's
interests". It went on to apologise and mentioned that damages had been paid to Lee Hsien Loong and Lee Kuan Yew. Those damages totalled an astonishing $S390,000.

Personally, I would not have said that Ho Ching's appointment owes anything to nepotism because I have no evidence that it does. The Economist was careless to suggest it. Ho Ching is certainly well-qualified. It might be fair to question whether nepotism played a role in her appointment but not fair to assert it.

But whether the assertion of nepotism is worth S$390,000 particularly when the Prime Minister, the Minister Mentor (as Lee Kuan Yew is now known) and the head of the Government's main holding company are all close relatives is another matter. The issue did not go to court. Lee family lawyers complained to The Economist and within two weeks the magazine had paid up. By any measure the sum is obscene. And ridiculous.

In Australia this inference of nepotism would be taken as fair comment, particularly with politicians for whom public scrutiny is part of public office. It would also need to be demonstrated that The Economist had been acting maliciously. Of course it was not.

In 2002, the two Lees and then Prime Minister Goh Chok Tong picked up $S595,000 from the Bloomberg wire service in settlement over an article that the men had deemed offensive. It was on the same matter - Ho Ching's appointment to Temasek. Other media organisations have also been threatened with defamation. Several have paid out.

Huge out-of-court payments such as these are now part of the cost of doing business in Singapore for news organisations. Principle has been sacrificed for commercial considerations.

If the Singapore Government is not appeased then the risk is that media outlets' distribution in Singapore will be curtailed. Several prominent foreign newspapers and magazines learned the hard way in the 1980s and '90s when their distribution in Singapore was cut back.

Not surprisingly, The Economist is not commenting on the matter. Perhaps it is embarrassed. It ought to be. At what point does an out-of-court payout become a pay-off?

Britain has made it illegal for its registered companies to make improper payments to foreign officials. It would be interesting to know whether the payments to the Lees, which appear to be excessive, are not court-awarded and which appear to be made to head off controls on the magazine's distribution, would constitute bribery of foreign officials under British law. What would be made of a western company (which is what The Economist is) giving such a large sum without apparent consideration to say, a pair of Indonesian ministers? There wouldn't be a whiff of nepotism so much as the stench of corruption.

Singapore Government officials defend their right to take defamation action and to be awarded huge payouts on the basis that their personal integrity is vital. But acting like sensitive control freaks would detract from their integrity such that over time, compensation for damage to their reputations should decline with the value of those reputations.

No doubt media organisations will defend their payouts to head off legal action by saying that legal costs in Singapore can be enormous. Certainly they are, and the Lees themselves have been significant beneficiaries. Lee & Lee is one of the largest law firms in Singapore. It's little wonder that litigation has become a powerful tool for the family. It's what they know best.

But the real problem is that foreign news organisations allow themselves to be so readily picked off by the Singapore Government. Multinational companies have started to initiate joint strategies to combat intellectual property rights abuses. It's about time that foreign media organisations did the same to combat the litigious excesses of the Singapore Government.

michaelbackman@yahoo.com