At the height of the Internet bubble, every Tom, Dick and Harry wanted a listing on Nasdaq or some other bourse. Never mind that they didn't have a decent business model or would never make any money. All that was needed was an eager investment banker who was willing to provide as much hype as possible and the idea would take off. Hey, if pigs can fly, so can portals.

Having being beaten in the Internet game by Korea and Hong Kong, where the sector took wings almost at the same time it did in the US, Singapore found itself in the position of having to play catch-up. Entrepreneurs lobbied for listing rules to be amended so that Internet companies could list on the local bourse without the headache of explaining their business model. Before the Singapore Net bubble burst last year, a bunch of "Internet" companies had rushed to list. Some, like eWorldofSports.com, weren't even Internet companies. They were normal retailers who simply started selling on the Web. No matter. Hype was what counted and there was freely available in Singapore.

Two years later, it is time to poke around in the rubble. I-one.net, which ran those interactive terminals along Singapore shopping boulevards, went broke a while ago. Panpacmedia.com, having lost tens of millions of dollars, is still around mainly because it made some money selling shares of Chinadotcom that it acquired in a swap. Wizoffice.com, which did its IPO at 20 Singapore cents just 12 months ago is now trading at 3 cents, despite having revamped its business model several times and dramatically curtailed its grand vision. Internet Technologies Group, which was backed by the local glitterati, including Singapore Airlines chairman Koh Boon Hwee, trades at eight cents, down from a high of 65 cents. Only eWorldofsports has done relatively well -- six cents from an IPO price of 42 cents-- because of real, rather than virtual, stores.

The only real portal to list on the bourse was SPH AsiaOne -- the Internet arm of Singapore Press Holdings, which has a virtual monopoly of print media in the republic. SPH AsiaOne raised S$88 million from the public in its June 2000 IPO. Unlike other newspapers in Asia that sell their content or are happy to make it available to other portals, Singapore Press Holdings has a policy of putting all its contents through AsiaOne.

SPH AsiaOne started with over S$100 million cash in the bank, but it didn't take too long for the share price to drop from an IPO of 60 Singapore cents to 10 cents. At a burn rate of over S$2 million a month (later reduced to S$700,000), it became clear the company was more a lemon than a successful portal. Losses kept mounting. There was no light at the end of the tunnel. The company lost S$14.9 million on turnover of S$9.6 million in the fiscal year ending last August.

Last week, the parent SPH, which already owns two-thirds of SPH AsiaOne, announced it would privatize the company. Huh? Yes, you heard it right. SPH is paying 30 cents a share to buy the one-third of SPH AsiaOne that it doesn't own. SPH AsiaOne shares had been trading at around 12 cents before SPH announced the privatization move. The buy-out sounds like a good deal for those investors who bought at 12 cents or thereabouts, but most of them came in at 60 cents a year ago. SPH executives say that 30 cents is better than what minority shareholders would have gotten had they sold in the market last week. And it's a lot better than what they'd get in six months. That's technically true, but it was SPH itself which floated AsiaOne off in an IPO at 60 cents, hyped up its Internet vision, said this was the thing of the future, and said it needed the IPO money to give oxygen to its Internet strategy. The problem is the poor guy who bought the IPO at 60 cents has no recourse.

The apparent reason SPH is bringing SPH AsiaOne into the fold is to get access to the subsidiary's remaining S$44 million cash. That's the money SPH AsiaOne still has in the kitty after having blown everything else. The exercise enhances SPH's own net asset value by 10 cents a share. Not bad for a day's work. And it's all within the rules.

I could go on about what SPH could or should have done -- such as a share buyback or return AsiaOne's cash to all its shareholders rather than to just the majority or give AsiaOne shareholders cheap SPH shares in a share swap (though that would have got SPH shareholders screaming) -- but it won't serve any purpose. It's too late. But let's just say that Singapore regulators might want to tighten up the rules they loosened last year in the name of encouraging entrepreneurship. Otherwise more minority shareholders might get hurt.

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