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From: AFP
Date: 06 May 1999
Time: 05:40:08
SINGAPORE, May 6 (AFP) - Singapore Deputy Premier Lee Hsien Loong on Thursday pressed Malaysia to resolve a multi-million dollar stock problem which threatens to blow up into another bilateral row. Lee told parliament that the impasse over Malaysian shares held by Singaporeans caught in limbo by the imposition of Kuala Lumpur's capital controls should be overcome, as part of an agreement reached between their two prime ministers.
Lee cited the agreement between Singapore Prime Minister Goh Chok Tong and Malaysian Prime Minister Mahathir Mohamad in December to resolve the Malaysian shares issue along with other sticky bilateral problems such as water supply, and customs and immigration procedures at a railway station.
Some 100 Malaysian issues were traded here over the counter under a system called Central Limit Order Book (CLOB) International until September 15 last year, when trading ceased after Malaysia imposed capital controls.
Lee is the first senior government leader to comment on the share controversy amid anger from Singapore investors over a private offer made by a Malaysian firm to buy the CLOB shares at a discount.
Lee said Malaysian government officials, in meetings with their Singaporean counterparts in March and April, requested that the CLOB issue be removed from the package of issues to be resolved.
"Singapore's response on both occasions was that the CLOB issue should not remain outstanding when the package is finally resolved. This remains Singapore's stand," Lee said.
He also urged the Kuala Lumpur Stock Exchange to act immediately on an agreement signed in September 1998 between the Malaysian exchange's subsidiary and the Stock Exchange of Singapore allowing holders in Singapore of Malaysian shares to trade in the Malaysian stock market.
"CLOB investors who do not wish to sell their shares on the terms offered by Mr. Khan, or to accept any other offers, do not have to do so," Lee said, adding however that the Stock Exchange of Singapore could not advise investors on whether to accept or reject the offer.
The Stock Exchange of Singapore on Wednesday criticized Khan's offer, saying it fell short of generally accepted standards.
Lee however ruled out a proposal that a counter offer be made by the Singapore state investment arms the Government Investment Corp. or Temasek Holdings, saying it would set a "dangerous precedent."
"Individual investors invested on CLOB on their own. This is over-the-counter, these are not shares that are listed on the Singapore stock exchange. They were shares listed elsewhere not subject to our disclosure rules or corporate governance standards," he said.
The Stock Exchange of Singapore had studied Khan's offer since "we had reason to believe and, we satisfied ourselves, that Mr. Akbar Khan was acting with the endorsement of the Malaysian authorities," Lee said.
Lee, citing figures, also rejected Malaysian charges that CLOB investors were responsible for the plunge of the Malaysian stock market.
He noted that Singapore stock investors, nearly all of them individuals, had doubled their holdings to 11.7 billion Malaysian shares from December 1996 to the eve of the imposition of Malaysian capital controls.
They accounted for the huge turnover even as Malaysia's economic crisis deepened then, he said.
Mahathir was quoted saying earlier this week that investors here had short-sold CLOB shares, triggering the Kuala Lumpur stock index's plunge from 1,400 points to a low of 260 last year.