Conflict of Interest Unlikely, Says SPH (BT)

BackDec 13, 2011

LEE Boon Yang, recently named non-executive chairman of Singapore Press Holdings (SPH), is unlikely to face a conflict of interest even if the property arms of SPH and Keppel Corp compete for land, SPH said.

The question arose because Dr Lee is currently also chairman of Keppel Corp, the majority shareholder of property developer Keppel Land.

"Keppel Land is a public listed company run by an independent board and management which acts in the best interest of Keppel Land in the discharge of its fiduciary duties," an SPH spokesman said in response to a query from BT. "Dr Lee Boon Yang is not involved in Keppel Land board deliberations nor the management of Keppel Land and he is not privy to its tender plans."

Dr Lee would also exclude himself from discussions and decisions should a conflict arise, the spokesman added.

The question is not completely hypothetical, because SPH and Keppel Land have gone after the same land parcels before. In September 2010, SPH's $651 million bid for a plot in Bedok came in second behind CapitaLand's $789 million winning offer, according to one research note from OCBC Investment Research. Keppel Land's $640 million bid was in fourth place.

In February, Keppel Land had the third-highest bid for a mixed-use site at Punggol Walk with a $786 million tender. SPH's $693 million bid came in fifth.

Securities Investors Association (Singapore) president David Gerald said that investors should trust their boards to act properly and also consider the background of the directors concerned.

"These institutions are run by men of integrity, and shareholders will believe that these men will not compromise their integrity," Mr Gerald said.

Associate professor Mak Yuen Teen told BT that because Dr Lee is not on Keppel Land's board, it was unlikely that he would influence tender decisions.

"I would say that a potential conflict of interest is not really an issue here," Prof Mak said.