Thai Purchase of Stakes in F&N and Asia Pacific Breweries: The Singapore Connections

The Straits Times had reported today that Thai Beer baron Charoen Sirivadhanabhakdi of Singapore-listed Chang Beer has bought over OCBC Bank’s and Great Eastern (GE)’s stakes in Fraser & Neave (F&N) and Asia Pacific Breweries (APB). OCBC and GE own 18.1% of F&N and about 8% of APB.

It was also reported that, “While analysts believe F&N’s drinks units is the key draw for Thai Beverage, its property division Frasers Centrepoint would have an appeal, given Mr Charoen’s already substantial investments in Singapore real estate.” The Straits Times report that this substantial investment refers to the “47 of the 48 units in luxury condominium Hoi Hup’s Suites @ Cairnhill (and that) he would have bought the remaining one if laws did not prevent a foreigner from owning all units in a development.”

However, what was not reported was Mr Charoen’s connections with the Singapore government, that stretches further back.

Frasers Centrepoint wouldn’t have been Mr Charoen’s first venture into Singapore’s real estate market. Mr Charoen is the owner of TCC Capital Land, where CapitaLand used to have a 40% stake in. TCC Capital Land was “joint venture company formed (by CapitaLand) with TCC Land in late 2003, an established real estate company in Thailand.” In 2008, TCC Capital Land was said to have “undertake(n) local residential projects on its own as its Singaporean joint-venture partner is reluctant to commit more funds to Thailand.” CapitaLand was said to be “very cautious about launching new projects as they are overseas, watching news from outside and not knowing that the Thai property market has significantly improved in the past month… Decision making at TCC Capital Land was also slowed by the fact that members of its board of directors were based in different countries. This led to delays in launching or developing new projects.” Last year, TCC Capital Land had “paid cash to buy the THB2.33 billion stake from CapitaLand… beverage tycoon Charoen Siriwattanabhakdi, will hold 100 per cent of TCC Capital Land. It was reported that, “Although CapitaLand has sold a major stake in TCC Capital Land Ltd, the relationship between TCC Land and CapitaLand remains strong,”

Also, it is already know that one of the two investment arms of the Singapore government, Temasek Holdings, has a 20% stake in CapitaLand Limited. Thus Mr Charoen already has links with the Singapore government way back since 2003. Mr Charoen’s relationship and interest in Singapore, and the real estate market in Singapore, is not new, or sudden.

It should also be noted that Asia Pacific Breweries is also connected to F&N, as a beer company where F&N is a major stakeholder. Thus Mr Charoen’s decision to purchase a stake in F&N and APB was made jointly. Furthermore, it is of note that Mr Lee Hsien Yang, the brother of Mr Lee Hsien Loong, Singapore’s current Prime Minister, and the son of Mr Lew Kuan Yew, Singapore’s first prime minister, is the chairman of F&N. Thus there are already links there as well.

Also, in 2003, in a speech to the 12th Teochew International Conference, Mr Lee Hsien Loong had said, “Till today, many leading Thai businessmen and politicians are Teochew. I recently met Mr Charoen Sirivadhanabhakdi, who owns the famous Chang Beer in Thailand. Mr Charoen’s Chinese surname is Su and he is a Teochew. He was visiting Singapore with a Thai deputy prime minister, Dr Somkid Jatusripitak, who is also a Teochew.”

Thus the Singapore government already has ties with Mr Charoen since 2003, and have invested in each other’s businesses.

What was also not reported is that Mr Charoen is Thailand’s second richest man, with an estimated wealth of US$5.5 billion.

The question then is what has changed? The Straits Times had reported that Mr Charoen’s interest in the stakes of F&N and APB could be because his real estate interests in Singapore. Is this true? The question is, is Mr Charoen really hoping to expand his real estate business in Singapore, through F&N, which Mr Lee Hsien Yang is head of? Furthermore, Mr Charoen had previously jointly-owned TCC Capital Land with CapitaLand, where Temasek Holdings also had a 40% stake in. Does Mr Charoen need to go through such extensive measures to invest in real estate? Or perhaps, is it really that difficult for him to invest in Singapore anyway?

The other question, which I do not know how to answer here, is this: How can the purchase of stakes in Singapore companies by wealthy foreign investors, benefit Singapore and increase the wealth of the Singapore government? How are these links to these wealthy foreign investors, as this article has shown, beneficial to Singapore? For example, Mr Charoen is Teochew and so is Lee Hsien Loong, as are some other political leaders in Singapore.

I do not know the answer, nor do I have an answer. Recently, I have been thinking, why does the government refuse to implement a minimum wage law? Why has the government refuse to spend more on healthcare for Singapore, for example, when we already spend one of the lowest proportionate expenditure of GDP on healthcare in the world? Why does the government refuse to increase its spending on Singaporeans, not only because it needs to, but because it can afford to. Why? Who is the government keeping all the money for? Who are our leaders keeping the money for?

Recently, the government in Myanmar has started transiting from one ruled by a minority who had held onto the wealth to one which hopefully will be a more transparent government. Had the government in Myanmar changed its stance because it realised it they cannot just hold on to the wealth among a privileged few without causing the growing resentment among its people? Or did it realise that by opening up its borders, it can grow the wealth of the richest in Myanmar more effectively? One wonders if we can draw parallels from that.

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