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1984: Taking Jardine Fleming to task

Birth of newspaper monopoly, Pan-Electric woes also hogged the headlines.
Monday, February 29, 2016 - 05:50

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ONE of the major tenets of a well-governed financial market is its ability to uphold professional and ethical standards and hold its financial intermediaries accountable for their lapses in exercising professional competence.

A test case emerged in 1984 when Jardine Fleming (Singapore), then-jointly owned by Jardine Matheson Holdings (JMH) and Robert Fleming & Co of London, was alleged to have committed gross mistakes in its advisory work for at least two major corporate transactions here. In an unprecedented move, the Monetary Authority of Singapore (MAS) revoked the merchant banking licence of Jardine Fleming, citing lack of professional competence and care in its work. The merchant bank was taken to task particularly for overvaluing Straits Steamship when advising Keppel Shipyard in its S$400 million takeover of Straits Steamship.

There was also inadequate advice offered to minority shareholders of Singapore Land back in 1981 on the valuation of five cargo vessels that SingLand had proposed to buy from Ocean Shipping Group, MAS said.

The year 1984 also saw the landmark merger of Times Publishing Bhd, The Straits Times Press, Singapore News and Publications Limited and Singapore Newspaper Services Pte Ltd. This marked the end of newspaper competition in Singapore and the creation of the present-day Singapore Press Holdings monopoly (Times Publishing Berhad later de-merged from the group in October 1988). The amalgamation was borne out of a choice for long-term economies of scale over the costs of a circulation war, wasteful competition and duplication of resources. SPH's incorporation in 1984 set the stage for its growth into a media conglomerate with close to S$6 billion in market capitalisation currently.

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Meanwhile, one Singapore-listed company that was increasingly mired in controversy in 1984 was Pan-Electric Industries. More than a year before it became synonymous with Singapore's biggest stock market crisis, signs of trouble were already brewing with concerns over irregularities in the stock. Despite a surprisingly strong set of half-year results released by Pan-Electric in August 1984, the Stock Exchange of Singapore made Pan-Electric a ''designated stock'' amid suspicions of insider trading, a move that drew flak from some investors. The market regulator eventually decided to let market forces take their course.

The Business Times has been there to report and analyse the most significant news since 1976. Every week, this feature will showcase excerpts from the biggest stories for each year that the paper has been in operation. The full text of all the stories can be found online at bt.sg/bt_40

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