Khoo death a twist to StanChart stake saga
Shortly after Khoo Teck Puat made the US$100 million decision to come to the aid of hostile takeover target Standard Chartered Bank in 1986, he triggered one of the longest-running rumours in financial history: that he was on the brink of selling out.
In Asia, potential bidders touted have ranged from Guoco Group chairman Quek Leng Chan to Singapore's DBS Group. Globally, the names included Citigroup, JP Morgan and Barclays.
For 18 years, Khoo resisted the temptation to offload his 13.5 per cent holding. The sudden death of the 89-year-old Malaysian-born tycoon on Saturday, however, puts this epic conjecture in a new light.
The spotlight will be on his family - he leaves behind 14 children - which, according to Standard Chartered, has given no indication of its intention for the bank's largest single shareholding.
The most recent speculation has centred on Barclays - which is seeking a pan-Asian presence - and Citigroup.
The bank's market position was attractive to a large European bank looking to expand in Asia, BNP Paribas Peregrine Securities analyst Patrick Ho said.
'If there's a bank buying the whole stake, the ultimate aim should be getting control,' Mr Ho said.
The lender - Britain's best-performing bank stock - makes more than 60 per cent of its profit in Asia, and recently reported a 20.6 per cent rise in net profit for last year to US$1.01 billion.
A sale of Khoo's stake would end a colourful chapter in the bank's history. Khoo was one of three financiers who foiled a hostile bid by Lloyds Bank - which subsequently became Lloyds TSB Group - by collectively buying 37 per cent of Standard Chartered.
His fellow investors eventually sold out. Shipping magnate Sir Yue-kong Pao disposed of his 10 per cent stake in June 1989, at a loss. The late Australian financier Robert Holmes a Court sold his holding to Alan Bond, who also subsequently disposed of the stake, in 1988.
While Khoo maintained his stake in Standard Chartered, he quit the board. Although no reason was given for his resignation, it came at a tumultuous time in Khoo's life.
The tycoon became embroiled in a scandal at the National Bank of Brunei, in which his family had a controlling interest. In November 1996, the bank was raided by police and Khoo's son, Khoo Ban Hock, was jailed for conspiracy to defraud and false accounting. The senior Khoo was accused of being the mastermind behind the siphoning off of funds but was never charged.
The episode eroded his net wealth as he repaid cash owed by the bank to Bruneian creditors and authorities. Nevertheless, he gained the title of Singapore's richest man, making it on to the Forbes rich list last year with an estimated wealth of US$2.6 billion.
