New Reporter
31-01-24, 12:03
Will Ong Beng Seng’s links to Iswaran case undermine his ability to effectively lead HPL?
Leslie Yee
Jan 31, 2024
ONG Beng Seng is synonymous with Singapore-listed hotel and property group Hotel Properties Limited : H15 -0.56% (HPL).
The Malaysian tycoon is HPL’s co-founder and managing director, and has been instrumental in running the group since its incorporation in 1980.
Notwithstanding his many contributions to the group, the time could be right for the long-serving Ong to leave his executive role at HPL.
In light of the latest developments following a probe by the Corrupt Practices Investigation Bureau (CPIB) into Ong and former transport minister S Iswaran, the board of HPL cannot afford to remain silent any longer.
Iswaran and Ong were arrested in July 2023, when the criminal probe was revealed to the public.
Since then, Iswaran has stepped aside from performing his duties as a Cabinet minister and a Member of Parliament. He resigned from these roles on Jan 16, after he was formally notified by CPIB of various charges.
On Jan 18, Iswaran appeared at the State Courts where he pleaded not guilty to 27 charges, including two charges of corruption, for allegedly obtaining over S$384,000 worth of flights, hotel stays, tickets to shows, musicals and English Premier League matches, as well as Singapore Grand Prix tickets from Ong.
Ong has not been charged. The Attorney-General’s Chambers said it will take a decision on the investigations against him after Iswaran’s case is completed.
Beyond a statement shortly after Ong’s arrest last year – when HPL said its nominating committee deemed Ong suitable to continue carrying out his duties and responsibilities as managing director – the board of directors at HPL has been conspicuously quiet on the matter.
Greater transparency
Good crisis management and governance call for HPL’s board to be upfront in sharing with shareholders and the public its reactions and plans following the latest developments in the CPIB matter.
For financial year 2022, Ong was not HPL’s highest paid executive. He received remuneration and benefits of between S$1.75 million and S$2 million.
Larger sums went to group executive director Christopher Lim, who received between S$2.5 million and S$2.75 million; and executive director Stephen Lau, who received between S$2 million and S$2.25 million.
Ong is, nevertheless, HPL’s most senior executive who bears executive responsibility for managing the group.
He holds a direct and deemed interest amounting to over 60 per cent of HPL.
Shareholders of the remaining 40 per cent of the group will want their interests to be protected, too.
Ong could be distracted by Iswaran’s court case. A cloud could also hang for a long time over whether Ong will ultimately face criminal charges, and the outcome of those potential charges.
Given all the above, should Ong voluntarily step back from his executive role at HPL?
If the answer is “no”, the board and the nominating committee should minimally shed more light on why they may still be backing OBS to continue in his executive role and what, if anything, has changed in how Ong performs his role.
Also, more colour can be provided on the succession and/or contingency plan should Ong get charged subsequently.
Best man to lead
Ultimately, HPL’s board and nominating committee need to be sure that Ong is the best man to hold HPL’s top executive role despite the CPIB matter.
Sure, Ong may be an accomplished deal maker with an extensive network of contacts.
He may be deeply knowledgeable on luxury hospitality and possess an enviable business track record. Counterparties may like to deal with Ong as the face of HPL given he holds a large stake in the group.
Iswaran’s corruption case and Ong’s alleged involvement may, however, create complications in HPL’s dealings with regulatory authorities in various jurisdictions, as well as with business partners at home and abroad.
Furthermore, the court case may sap staff morale at HPL and impede the group’s ability to attract talent.
HPL appears to be progressing on its proposed redevelopment of the Voco Orchard Singapore hotel, Forum The Shopping Mall and HPL House in the Orchard Road area into a mega mixed-use development comprising retail, office, hotel and residential components.
While potential returns from the above proposed redevelopment may be high, so are the risks.
Ong has to be laser focused in ensuring this mega redevelopment succeeds. To get outstanding results from the possible redevelopment, HPL likely needs Ong to be at the top of his game.
Corporate leaders today are being challenged to do more as the world faces high interest rates, heightened geopolitical tensions, massive technological disruptions and the green transition.
To survive and thrive, businesses need effective leaders who are fully committed.
The fates awaiting Iswaran and Ong because of their dealings will need time to be resolved. Meanwhile, Ong’s fitness to hold office as HPL’s managing director is questionable.
https://www.businesstimes.com.sg/opinion-features/columns/will-ong-beng-sengs-links-iswaran-case-undermine-his-ability-effectively
Leslie Yee
Jan 31, 2024
ONG Beng Seng is synonymous with Singapore-listed hotel and property group Hotel Properties Limited : H15 -0.56% (HPL).
The Malaysian tycoon is HPL’s co-founder and managing director, and has been instrumental in running the group since its incorporation in 1980.
Notwithstanding his many contributions to the group, the time could be right for the long-serving Ong to leave his executive role at HPL.
In light of the latest developments following a probe by the Corrupt Practices Investigation Bureau (CPIB) into Ong and former transport minister S Iswaran, the board of HPL cannot afford to remain silent any longer.
Iswaran and Ong were arrested in July 2023, when the criminal probe was revealed to the public.
Since then, Iswaran has stepped aside from performing his duties as a Cabinet minister and a Member of Parliament. He resigned from these roles on Jan 16, after he was formally notified by CPIB of various charges.
On Jan 18, Iswaran appeared at the State Courts where he pleaded not guilty to 27 charges, including two charges of corruption, for allegedly obtaining over S$384,000 worth of flights, hotel stays, tickets to shows, musicals and English Premier League matches, as well as Singapore Grand Prix tickets from Ong.
Ong has not been charged. The Attorney-General’s Chambers said it will take a decision on the investigations against him after Iswaran’s case is completed.
Beyond a statement shortly after Ong’s arrest last year – when HPL said its nominating committee deemed Ong suitable to continue carrying out his duties and responsibilities as managing director – the board of directors at HPL has been conspicuously quiet on the matter.
Greater transparency
Good crisis management and governance call for HPL’s board to be upfront in sharing with shareholders and the public its reactions and plans following the latest developments in the CPIB matter.
For financial year 2022, Ong was not HPL’s highest paid executive. He received remuneration and benefits of between S$1.75 million and S$2 million.
Larger sums went to group executive director Christopher Lim, who received between S$2.5 million and S$2.75 million; and executive director Stephen Lau, who received between S$2 million and S$2.25 million.
Ong is, nevertheless, HPL’s most senior executive who bears executive responsibility for managing the group.
He holds a direct and deemed interest amounting to over 60 per cent of HPL.
Shareholders of the remaining 40 per cent of the group will want their interests to be protected, too.
Ong could be distracted by Iswaran’s court case. A cloud could also hang for a long time over whether Ong will ultimately face criminal charges, and the outcome of those potential charges.
Given all the above, should Ong voluntarily step back from his executive role at HPL?
If the answer is “no”, the board and the nominating committee should minimally shed more light on why they may still be backing OBS to continue in his executive role and what, if anything, has changed in how Ong performs his role.
Also, more colour can be provided on the succession and/or contingency plan should Ong get charged subsequently.
Best man to lead
Ultimately, HPL’s board and nominating committee need to be sure that Ong is the best man to hold HPL’s top executive role despite the CPIB matter.
Sure, Ong may be an accomplished deal maker with an extensive network of contacts.
He may be deeply knowledgeable on luxury hospitality and possess an enviable business track record. Counterparties may like to deal with Ong as the face of HPL given he holds a large stake in the group.
Iswaran’s corruption case and Ong’s alleged involvement may, however, create complications in HPL’s dealings with regulatory authorities in various jurisdictions, as well as with business partners at home and abroad.
Furthermore, the court case may sap staff morale at HPL and impede the group’s ability to attract talent.
HPL appears to be progressing on its proposed redevelopment of the Voco Orchard Singapore hotel, Forum The Shopping Mall and HPL House in the Orchard Road area into a mega mixed-use development comprising retail, office, hotel and residential components.
While potential returns from the above proposed redevelopment may be high, so are the risks.
Ong has to be laser focused in ensuring this mega redevelopment succeeds. To get outstanding results from the possible redevelopment, HPL likely needs Ong to be at the top of his game.
Corporate leaders today are being challenged to do more as the world faces high interest rates, heightened geopolitical tensions, massive technological disruptions and the green transition.
To survive and thrive, businesses need effective leaders who are fully committed.
The fates awaiting Iswaran and Ong because of their dealings will need time to be resolved. Meanwhile, Ong’s fitness to hold office as HPL’s managing director is questionable.
https://www.businesstimes.com.sg/opinion-features/columns/will-ong-beng-sengs-links-iswaran-case-undermine-his-ability-effectively