Umbrage Bandwagon

While people are making fun of SPH CEO bringing the somewhat archaic lingo back into mainstream, I think the real reason is that people are taking umbrage at what was announced about SPH. There’s generally a sense of socialisation of losses as the media substance of SPH is being packaged into a CLG to be held by the government.

I guess that move simply make the “state ownership” of the media outlets involve a little more explicit per se. The listed status is probably problematic but I’d think there is no need to cave in to investor pressure. The company itself is unique being regulated by special laws – that should already warrant it special status and allow shareholders to self-select. There is no need for them to compete with others for capital. In fact, 99.9% of the company is in the hands of public shareholders and they themselves signed up for it fully aware this is a regulated company by the government. Maybe the regulated status made it hard to innovate its business model?

Nevertheless, that is not an excuse to get a bail-out. Imagine a bank who says they can’t compete because of the central bank’s capital adequacy ratios and hence will transfer all the non-performing loans to a vehicle which will be guaranteed by the government. Hmm. Being regulated does not mean the public can be made responsible for losses.

What is for sure about this move though, is that it takes a loss-making business out of the hands of CEO Mr Ng. The same thing happened when NOL was divested to CMA CGA under Mr Ng’s leadership. Perhaps like NOL, the business may come back to turn a profit when it is led by someone else.

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