Tuesday, March 19, 2013

Wizard or Lizard?

I joined Genting after KS had already left the company. He was fondly missed by many of his former colleagues there. There were many anecdotes about his generosity and kindness. Before I knew him, I had always wished I could have the chance to work with him. He was a larger-than-life corporate genius to me.

Towards the late 70s, the Chinese community was rediscovering itself. Multi-Purpose became the rallying point of the Chinese. The name KS was synonymous with Multi-Purpose and Multi-Purpose was in the headlines every other day.

I attended one of his luncheon talks one day. He was a very confident speaker but certainly not a particularly eloquent one. His command of English was average. The circumstances leading to some of the prized acquisitions, he admitted himself, were more situational than anything else.

However my admiration for him continued unabated until sometime in 1983, when I had the opportunity to know him in person. Things were already not going quite right for him in Supreme, the group he controlled. High & Low was invited to take a look into two of its subsidiaries – Supreme Refinery and Supreme Chemical. Their balance sheets were atrocious. You really had to pay one to take the companies over; they had net liabilities! Nevertheless, we were more interested in their businesses than their assets.

The state of affairs at Supreme Chemical was pathetic. We thought we should not waste anybody’s time.

Supreme Refinery was more presentable. The plant manager, a pleasant-looking lady, in her thirties, received me. “Why were the losses so huge?”

The answer was in the management accounts!

There were obviously some margins to be had in the business, but the company had lost millions in doing hedging. Did the big boss know about it?

* * * * * 

I could not help relating this observation to friends: The staircases or the bridges in refineries were usually the see-through type. And ladies beware! If you have to visit one, make sure you wear pants. On this particular day, the pretty plant manager was wearing a not-too-long skirt. Could you really blame her colleagues for exercising their neck each time we made a climb?

When I discussed the two companies with the Yang Berhormat, the honorific to which he was entitled then, he said he did not seem to have good fengshui apart from Finance and Properties. In my audacity, I wrote him a small note: Yang Berhormat, you have to go beyond good looks in management.

There was no way bosses in High & Low would pick up these two companies, I had to tell him. He was a gentleman. Over the telephone, he said, “Yu Bok, it is alright.”

* * * * *  

Through a broker, we came to know that a 5,500-acre palm oil estate in Paloh, Johor was for sale. “Whose estate is that?”

The answer: “Supreme’s”

That was in 1984.

Not a bad estate, our plantation controller Lee King Wat concluded. Since High & Low was also anxious to pick something to show shareholders, the deal was soon closed. The consideration: RM46 million  - everything therein and thereon, including the palm oil mill in the middle of the estate.

The assets had to be checked against the records.

“How come some 2-3 million dollars worth of equipment was not in the books?”

“They were acquired under leased financing from XXX”

A legal point arose. The assets acquired under lease financing were strictly not Supreme’s. Under the circumstances, could High & Low demand Supreme to surrender them? Or should High & Low redeem them from the leasing company?

KS called me from the Subang Airport; he said he was on his way to Europe. “Could we come to a compromise?”

“Very difficult, Yang Berhormat. The High & Low board have already made the decision. And you have agreed on therein and thereon basis, haven’t you?”

“Alright, let’s conclude it early.”

He gave up so easily! I could not believe it.

If the Yang Berhormat had kept a Mercedes 500 there and we had also insisted that it should be High & Low’s, possibly YB Tan might also say, “Okay, it is all yours.” After all, we were talking about therein and thereon and YB was a man of principle.

* * * * *   

The physical take-over was a three-day affair. Personnel Department had to issue letters of continued employment to those who wanted to stay behind; the Accounts and Audit people had to take stock of the assets; and Plantations had to comb through the statistics. I, as the corporate planner, had only to follow up with the legalities. But everyone had a good outing in the midst of the jungles of Johor, where cobras sunbathe themselves right in the middle of the estate roads.

“How come there are seven mini-tractors when the book says there are four?”

It is a fact!

* * * * *  

Chinese are worshippers of heroes. KS was certainly a hero to many.

He has a very pleasant personality. He can make his guests, no matter how ordinary they are, feel at ease. A great student of management, he knows all the SWOT*1 stuff at his fingertips.

Tan Sri Lim told me this one morning over tea at Genting. KS was first introduced to him when Tan Sri was having some difficulty with his tax returns. He had certainly contributed a great deal to the growth of Genting. Essentially a doer, KS was able to help convert Tan Sri’s dreams into realities. But with or without KS, Genting would always be a formidable name under Tan Sri Lim Goh Tong.

The exposure KS had in Harvard must have been a watershed in his career. Famous for its case study method of imparting entrepreneurship into bright-eyed mavericks, HBS, among other things, teaches the use of high-sounding jargons and the art of “getting things done”.

KS saw business as a big jigsaw puzzle – you must have all the pieces to form a picture. He had had big visions for the Chinese community. But what happened to Multi-Purpose?

Also what about Matang, Aik Hua and P’ng Hua?

He was billed as the financial wizard of the time. But having interacted with him before, I came off very unsure of the depth of his wizardry.

* * * * *   

“R” and “L” are used interchangeably by some Chinese in pronouncing English. “Wizard” and “lizard” also sound quite alike. Maybe it was “lizard” they had in mind when they said “wizard”. Was the recent Singapore Airlines disaster in Taipei’s Chiang Kai-shek airport a result of this interchangeablity – R- or L-runway?

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