So who do you believe about the Singapore-ASX takeover (it is not a merger, it’s a takeover because the Singapore Exchange is acquiring the ASX)?

Fairfax columnist Richard Ackland who wrote this morning:

“The takeover of the Australian Securities Exchange by its Singaporean counterpart would have to be one of the most awful ideas to be forced down our throats in yonks.

“The Lee family, which runs Singapore’s faux democracy, has proved one of the region’s most consummate oligarchs.

“The Singapore government’s paws are over every big enterprise in the island state, which has been described unkindly as a shopping mall with a vote in the United Nations.”

Or Rowan Callick, who wrote glowingly of the deal in The Australian on Thursday:

“The critical mass of Singapore’s financial sector is a crucial lure for Australia’s industry, according to a leading Singaporean banker.

“Whether the Australian and Singapore stock exchanges eventually merge or not, the trend is unlikely to change: more Australian companies, operations and professionals shifting to Asia.

“Singapore is Australia’s largest trade and investment partner among the 10 ASEAN countries.

“Lim Say Boon, the chief investment officer (private banking) of leading bank DBS, who spent several years working in Australia, yesterday said the tie up between the SGX and ASX was logical.”

What Callick didn’t report is that Boon is a former workmate on The Australian Financial Review from the 19080s. Callick was a top-notch Asia-Pacific expert working out of Sydney and Boon was a solid business journalist operating out of Melbourne.

It’s instructive that when Boon returned to Singapore, he moved into the banking and investment area rather than pursue his career in financial journalism. In fact some of his reporting in Australia would have been impossible in Singapore. The same comment can be made about some of Callick’s reporting down the years for the AFR, the Australian and other media. He is among the top writers on Asia Pacific.

So it is a little curious that Boon seems to support this deal when he full knows that reporters and media outlets do not have the same sort of freedom they do in Australia to report on business and political affairs in Singapore.

Business runs away from human rights and associated issues, and yet they always emerge to bite them on the bum. Think BHP at OK Tedi in PNG, links between Australian companies and the junta in Burma, the links to racist South Africa in the 1970s through to the late 1980s, the AWB’s efforts in Iraq. Business refuses to criticise governments (Singapore and Malaysia have been examples in recent years) that limit or take away rights that business boasts about what makes Australia good place to live in and invest: the right of law, a general ability to criticise its leaders (as Mike Smith of the ANZ did yesterday. Let’s see him have a go at Singapore when there’s an infringement of human rights) and to be able to invest without a domineering government or ruling family knowing what you are doing, which is the case in Singapore.

Rowan Callick forgot the latter point, but here’s a reminder from Richard Ackland in the SMH this morning:

“When you add up the arms and agencies with holdings and cross-holdings in the exchange, the Singapore government owns more than 30 per cent of the SGX. The exchange’s annual report lists as a director Lee Hsien Yang, the second son of old Harry Lee and brother of the Prime Minister, Lee Hsien Loong.

“The state’s sovereign investment arm Temasek Holdings has a big stake in the exchange, and its chief executive is Ho Ching, the Prime Minister’s wife. Temasek is basically owned by the Ministry of Finance.

“The regulator of the exchange is the Monetary Authority of Singapore, which doubles as the central bank. It is chaired by the former prime minister Goh Chok Tong.

“Immediately, there are legitimate perceptions of a conflict of interest as one government instrumentality is supposed to be having oversight of the stock exchange which, in turn, is required to deliver a healthy return to investors, including the government. It is into this carefully confected fiefdom that our securities exchange is being foisted.”

And a further reminder for all business writers (on The Australian Financial Review and in the News Ltd papers, especially Terry McCrann, plus on The Australian) from Richard Ackland:

“We are all familiar with the shoddy human rights record of Singapore. Australia’s is not perfect, either, as Lee Kwan Yew delights in pointing out. But we have yet to get to the stage of government ministers suing opposition leaders for defamation and driving them out of parliament with petitions for bankruptcy. Newspapers and magazines have also had expensive verdicts against them for criticising the government.

“The Lees say they have brought these actions to protect ‘democracy’.

“Still, if we refused to do business with every regime that used ruthless tactics to hold power, we would be doing very little business at all.”

The latter point is right, so that’s why we have to protect Australia’s interest and business writers shouldn’t roll over on to their backs and say, ‘Tickle me Elmo’ at every deal. They should maintain their scepticism about all sides in the deal and keep the bastards honest, not just poor Joe Hockey and Julia Gillard.

Peter Fray

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