Well, Singapore Inc. clearly has been shaken. Since June 23, more than a dozen top brass at troubled companies controlled by Temasek have left--including the CEOs of Development Bank of Singapore, Chartered Semiconductor Manufacturing, and ST Assembly Test Services, as well as chairmen, CEOs, and directors at other Temasek companies. The latest: On Aug. 20, Thomas Kloet, CEO of Singapore Exchange Ltd., the manager of the local bourse, announced plans to leave at yearend, four months before his contract expired.

What's going on? Ho, her husband, the prime minister, and almost all the departed executives declined requests for interviews for this story. Temasek released a statement saying it "is not involved in the recent management changes" and said the boards of the companies it controls decide on management issues. Kloet says he's leaving because he has accomplished what he set out to do, and says of Ho: "I'm a big admirer of hers."

Yet few outsiders believe the rash of departures is entirely a coincidence. And at least some of the chief executives who left ran companies that have come under criticism. Yeo Ning Hong, for instance, was granted early retirement as chairman of the Port of Singapore Authority Corp. Over the past year, the PSA indefinitely postponed plans to go public and lost two important clients--Denmark's Maersk Sealand and Taiwan's Evergreen Marine Corp.--to a competing port in neighboring Malaysia.

Then there's Development Bank of Singapore, the island's largest bank. DBS has been in turmoil since 1997 due to overpriced acquisitions of consumer banks in Korea, Hong Kong, and Thailand. The bank is still recovering from a botched merger in 2000 with POSBank that preserved two competing networks of retail branches and ATMs. Philippe Paillart resigned as CEO on June 23 after only 19 months on the job, leaving the bank in the hands of its fourth chief executive in four years.

Among the state-controlled companies that remain untouched thus far is one of the city-state's largest: Singapore Telecommunications. The company's net profits fell by 17 percent last year. Some investors say SingTel overpaid when it spent $8 billion for the Cable & Wireless Optus cellular network in Australia in April, 2001. Shares of SingTel--which is headed by Ho's brother-in-law, Lee Hsien Yang--have fallen by half since the deal was announced, although they have stabilized of late. Lee Hsien Yang and other SingTel officials declined to comment.

Ho, meanwhile, appears to be shaking things up elsewhere. In recent weeks, long-stalled restructuring schemes have been revived to merge redundant companies inside Temasek as well as spin off noncore assets. Merger plans between Temasek's two colossal shipyards, SembCorp Industries Ltd and Keppel Corp, appear to be sailing again. Disagreements over pricing that stymied negotiations last year now seem forgotten, say fund managers. Then there's NatSteel Ltd, Temasek's steel mill. CEO Ang Kong Hua is getting encouragement to revive a planned management buyout, with the help of an inexpensive loan from DBS. "If this gets a company off Temasek's back and away from its stewardship, we think it's a great thing for Singapore," says a fund manager in the city-state.

So far, Ho's appointment has done little to help many of the publicly traded companies that Temasek controls: DBS is off by 13 percent since May, and Chartered Semiconductor has plunged by 48 percent. "It's still early days yet," says Mark Mobius, who runs Templeton Asset Management Ltd. in Singapore. Nonetheless, Mobius says Temasek, under Ho, is finally making some of the right moves. It looks like this ultimate insider has gotten inside Temasek--and is starting to turn it inside out.

                                                    Home