by Joseph Nathan

Singapore Press Holdings (SPH) has just reported a 25.7% drop in 2Q19 earnings to S$29.7-million, with a 5.2% decline in revenue. It cited higher costs as its core print advertisement revenue decline further, while it’s operating income dropped by 31.6% to just S$4.5-million. I was surprised that its CEO, Ng Yat Chun, was quick to point out how diversified SPH has become and the drop from advertising revenue is of no real concern.

SPH, the owner of our national broadsheet and 50 over publications, has unrivalled advantages operating in Singapore all these years. While it is true that digitalization and online news portal are eroding away its profit, it is equally true that SPH has to blame itself when its news, which is its end products, are becoming more like the newsletters of the government rather than an engaging-platform, where people will want to go to for factual, investigative and comprehensive reporting.

While it may be investor-friendly to be reporting that two-thirds of its profits are now coming from property instead of its core business, these property investments were largely attributed to its UK student accommodation and elderly care in Singapore, where it owns the Orange Valley Healthcare. Under Ng, it has also recently acquired the Figtree Grove Shopping Centre in Australia.

During the 1997 Asian Financial Crisis, our government stepped in and rescued several of our titans from collapsing with public fund. It directed our GLCs and related entities to divest away non-core businesses and to streamline their operations so that they can focus on their core business as part of the rescue package. Smaller banks were forced to merge while new entities like CapitaLand were formed to take over the portfolio of DBS Land and those of Pidemco Land. It was logical and there was no real public outcry.

Why is SPH, like many of our GLCs, are now allowed to return to diversifying beyond their core businesses? In the case of SPH, their diversification looks random at best, totally out of sync with its core business, brand name and may even put its journalists and publications at risks of conflict of interest. Should they encounter another financial crisis, will our government be coming to their rescue again?

Ethically, can our government even consider rescuing them since they are going against our government’s earlier advice – to stay focus on their core businesses? Are they even being led by competent corporate leaders? Have we forgotten about the essence of this hard lesson of 1997?

Ng was formerly the Chief of Defence Force in the SAF before he retired in 2007 and held the rank of Lieutenant-General. He then joined Temasek for four years before being appointed as the Group President and CEO of NOL in 2011. Personally, I have no issue with him as a person or as an ex-soldier.

As we know, NOL suffered massive losses. In February 2015, its prized-asset, APL Logistics was sold to Kintetsu World Express for US$1.2-billion. As the bleeding continues, NOL was finally fully divested in June 2016 to the French group, CMA CGM, for US$3.38-billion and was delisted from our stock exchange in September 2016. There was a public outcry as NOL was seen as a national icon of our prized shipping industry.

The Straits Times reported in an article on June 2016 where Ng stated that “we have made good progress in that aspect, and every year we’re managed to reduce our losses. Unfortunately, we haven’t been able to cut costs fast enough to offset the collapse in freight rates”. He even cited candidly that “in this environment of extreme overcapacity and severe freight rate erosion, competition is based on cost” to justify the divestment of NOL.

In a nutshell, in the professional view of Ng, NOL was as good as a gone case and in that article, it seems that he was also giving himself some credits for reducing its losses. Many questions were asked as to why Ng was appointed and whether he was even qualified to be heading NOL in the first place.

Miraculously, BT reported on May 2017 that the new French owner managed to turn NOL around in just under a year of its acquisition, reporting a profit of US$86-million against a loss of US$105-million in the same period of 2016. There were a second massive public outcry and more questioning. As we know, Ng subsequently joined SPH on September 2017.

Now that SPH is again facing a challenging business environment, some Singaporeans like me are getting concern if SPH will end up like NOL as Ng has no experience in the media industry, just like he has no experience in the shipping industry when he headed NOL. Some Singaporeans even questioned why he was not fired for his failings at NOL but was seen to be promoted instead. As usual, many of such questions will never be answered by our ministers for reason unknown.

As a national broadsheet, its core revenue is derived largely from government grants and spending, advertising revenue and concessions. Like any MSMs, today readers are spoilt for choice and institutional news, like government newsletters, are a big turn-off for the new generation of readers. There are many competing news sites and the quality of their reporting simply outgunned that of SPH’s news platforms. Being the mouth-piece of the government, some readers naturally viewed its reporting with scepticism.

SPH needs a competent leader who knows the delicate balance of journalism, both as an art form and as a discipline, to nurture its pool of journalistic talents, and appreciate its editors sufficiently to empower them, and not curtail them from pursuing Hard Truths. In its totality, it must be engaging and be the platform to go to for any informative, investigative and comprehensive news. Need more proof – will any journalist in its own stable of publications be writing an article like this and question its CEO? Truth hurts and in the case of SPH, will it ever learn and accept the fact that it is no longer relevant in today’s world of journalism?

Instead of innovating to entice and engage the changing demographics of the reader, why is SPH allowed to take an easy way out of its core challenges? If corporate discipline is to be ignored, why not then issue SPH with a Capital Market licence and allow it to structure bonds and derivatives? Its 50 over publications can be roped in lucratively to help flush out much glossier analysts’ report while its broadsheets in the various languages can reinforce their “buy” recommendations without consequences. Is our government allowing or encouraging our GLCs to act without corporate discipline?

With so many of these generals helming our businesses and operations in both the private and public sectors, there is a need to be asking how qualified are these ex-generals as many of them have polished CVs but no real world experience. There are already many blunders attributed to them, from NOL to SMRT. What is troubling is that most of them are being “manufactured” and fast-tracked for political careers with the PAP instead of being discarded upon their expiry from the SAF.

If true, this begets the question – is the PAP struggling to recruit real talents with real-world experience to renew itself? What real values can these ex-soldiers offer – to the country, our businesses, investments and our economy, and the well-being of Singaporeans? Are we witnessing the making of another Hard Truth?

It is so obvious that we have just too many ex-generals who are being fast-tracked into our private and public sectors and we know most of them will be further fast-tracked into parliament via the backdoor of GRCs. Is this the new direction as to how PAP renews itself and is such calibre reflective of PAP’s political leadership renewal – as in how PAP will be governing our country, directing our public, private sectors and protecting our investments and reserve?

Some Singaporeans are already struggling to come to term with the endless arrogance and stupidities of the PAP’s current 4G political leaders. If these are indications of what is to come in the foreseeable future, I am afraid that these “Toy Soldiers” may just bring our country to its knee. When that day comes, we cannot divest away Singapore like how we had divested NOL but would have to start cleaning up their mess and rebuilding our country from scratch.

I would shudder when I think about hoping for any of the foreign investors or talents to be around as they would be long gone from our shore. I don’t think we will be bothered about our CPF or the value of our HDB Flat as by then, they will be meaningless. I reckoned that even our millionaire-ministers will be long gone as we can no longer afford them.

My concerns may sound like a page from the novels of 1884 or A Brave New World. But once our financial reserve and comparative advantages have been severely eroded or compromised, the Hard Truth is that it may just become a reality. In an era of great global uncertainty, things can go terribly wrong very quickly. The recent Hyflux saga is just another timely reminder.

In the case of Singapore where our government has not been actively creating real economic values to sustain our First World economy diligently these past years, we are also at risks of experiencing the “Lost Decades” syndrome that Japan has been experiencing over the past 20 over years. Everything that we had created or worked for over the past 50 over years will be deflated, slowly but surely. I am concern as I seriously think Singapore deserves better

This was first published on Joseph Nathan-Hard Truths SG’s Facebook page and reproduced with permission.

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