Good call from Sin Boon Ann

BUSINESS TIMES 26 Nov 1998 


GLCs should focus on core areas, be more transparent: MPs


GOVERNMENT-LINKED companies (GLCs) should restructure, get rid of peripheral
interests and be single-minded in focusing on their core businesses if they
want to compete on the world stage, Sin Boon Ann (Tampines GRC) said
yesterday. 

Indeed they should "take a step backwards and re-examine their mission
statements", said Mr Sin, one of several MPs who this week took GLCs to task
for straying beyond their core areas into businesses in direct competition
against smaller, local firms. 

"We have GLCs, for instance, that have interests ranging from shipbuilding and
repair to food retail outlets. And in recent years, it became fashionable to
form property development companies," said Mr Sin. "The fact is, many of our
GLCs are into property development and are often in direct competition with
each other. This has resulted in needless waste of resources." 

Mr Sin urged caution on the Committee on Singapore's Competitiveness'
recommendation that GLCs lead Singapore's efforts to produce world-class
companies. In particular, he and other MPs cited the relative lack of
accountability and transparency among unlisted GLCs. 

"I would say that these concerns have been generated in recent months by the
high-profile failures and acquisitions of some of our government-linked
companies," said Mr Sin. "Unless we can impose a framework for greater
discipline among these companies, we may be exposing ourselves to greater
weaknesses by encouraging these companies to become world-class companies." 

Responding later, Trade & Industry Minister and CSC chairman Lee Yock Suan
said some of the criticisms are valid. "The GLCs have in fact strayed from
their core business. That's why the CSC has come out with this recommendation
that they should focus on one area," he said. 

The GLCs should refocus and spearhead Singapore's efforts into particular
areas. "Hopefully they will be able to lead us in our regionalisation drive as
well by bringing along the supporting industries," said Mr Lee. "This is an
area which I believe Temasek Holdings will be looking carefully into."