14 July 2005

How Now, Brown Cow?

"Just ask Mr Wang, lor. He knows everything."

Haiyah. Mr Wang Zhen likes to be respectful to Singapore's most senior and respected blogger, Mr Brown, but today cannot tahan lah. Mr Brown is really missing the point. Let's see what Mr Brown has to say on the NKF issue:

    Allow me to play Devil's Advocate. If you think about it, a CEO who manages $200 million and is making $500 to $600k a year, is really underpaid. VCs who handle that kind of money are usually paid much much more, usually more than a million a year. Heck, I know of Creative Directors, who are not responsible for this kind of money, being paid more than $25,000 a month.

    Of course, if you don't consider the NKF a business, then this point is moot. But I do think that it is rather naive to expect $200 million to be managed by someone being paid $60k a year. I'd be worried if that were so.
The point is not that TT Durai makes $600,000 a year. The point is that TT Durai makes $600,000 a year by running a charitable organisation; his money all came from donors who thought that their money was going to help kidney patients; AND most importantly of all, TT Durai kept his salary a secret.

Now if every year, TT Durai told the world, "Hey, I am going to give myself 12 months' bonuses this year, okay? After all, this year I worked very hard and collected X million dollars in donations for kidney patients!" -

then that would be a different story. People who feel that TT Durai deserved it would continue to donate to the NKF. People who feel that TT Durai did not deserve it would stop donating to the NKF. But no one would feel that TT Durai or the NKF was being dishonest.

Mr Brown's comparisons of NKF with companies are not valid. Companies, especially listed companies, are subject to strict rules about disclosure. They are required to have annual reports, get external auditors to report on their accounts, hold annual shareholders' meetings where any shareholder can question them, and so on. Most listed companies will also indicate how much their top people are paid (that is how we know Wee Cho Yaw was paid $4 million last year by his bank UOB and Jackson Tai was paid 3 point something million by DBS).

Let me tell you that if you are a director of a listed company and you play any funny games, you can definitely end up in jail. Too bad NKF is not a listed company, although it tries to act like one sometimes.

    Please hor, just looking at it from another angle. Don't stop calling my 1-900 number, ok? And I am surprised so much firepower attention was focused on the CEO, but not that much on the board that granted him his expenditure, pay and perks. Maybe that was planned for Day 3, but now we'll never know.
Haiyah. Mr Brown obviously does not understand court procedure. (Okay fine, he's not a lawyer, can't expect him to know court procedure). Firstly, this trial is about NKF suing SPH for defamation. Not SPH suing NKF for paying Durai too much money.

It is NKF which is unhappy about SPH writing about Durai's toilet bowl and gold tap in 2004. So to defend SPH, Davinder Singh must of course focus on Durai's gold tap and toilet bowl, mah. Remember who is suing who. Davinder Singh is out to defend SPH by showing that its 2004 article is "fair comment". Davinder Singh is NOT in court to show that the NKF board acted wrongly in giving Durai all those fat paychecks and perks.

And what else did Mr Brown write?

    The transcript of their lawyer aggressively cross-examining NKF CEO TT Durai was a good read too, but I had trouble finding the transcripts or even reports of the NKF lawyer's cross-examination of SPH and of Durai in the ST. Maybe they ran out of space in the ST, and could not cover that. Or on Day 1, it was all SPH's lawyer talking. I'm not sure.
Since Mr Brown is not sure, Mr Wang will tell him. NKF is suing SPH. So in court, NKF witnesses will go first. SPH witnesses, such as the journalist Susan Long, will not go on the witness stand until all the NKF witnesses are finished.

However, since NKF withdrew its case as early as Day Two, SPH witnesses never needed to go on the stand. So obviously NKF's lawyer Michael Khoo never got to cross-examine anyone from SPH.

And how come the newspapers reported nothing about NKF's lawyer asking Durai anything? Because in a civil trial like this, Durai would have told his story long ago. Even before the trial starts, Durai would have already stated his full complaint in a long written document called an affidavit. This affidavit would then have been given to the judge and to the defendant SPH, so that they know what Durai is unhappy about.

When the trial starts, the NKF's lawyer will hardly have anything much to say. It would have gone like this:-

Khoo: Please state your name and occupation.

TT Durai: My name is TT Durai. I am the CEO of the National Kidney Foundation.

Khoo: Please refer to the Affidavit. Please confirm that this is your Affidavit and the signature on page 18 is yours.

TT Durai: Yes.

Khoo: Your Honour, please may the Affidavit be marked.

Judge: Affidavit of TT Durai marked P1.

Khoo: No further questions, your Honour.

Davinder Singh: May I commence cross-examination, your Honour?

Judge: Yes.

[Next 2 days are fun & games for Davinder Singh.]

So what is there to report about what Michael Khoo said? Nothing much. Very boring lah. Michael Khoo will have hardly anything to say until SPH witnesses testify (the trial never came to that).

Michael Khoo would have a chance to question Durai again (it's called "reexamination") after Davinder finishes the cross-examination. But Durai withdrew his case even before Davinder finished. So at the end of the day, Michael Khoo hardly got to say a thing in court.


Anonymous said...

Heh, once again Mr Wang saves the day by shining the light into our collective darkness. But seriously, your little court procedure tutorial was indeed enlightening.

Heavenly Sword said...

Haha, very interesting post :)

Anonymous said...

Mr Wang Zhen, in my mind, your most excellent post raises a more fundamental question about the governance of charities in Sg - that is should be, but is not, as transparent as listed companies. It seems that NKF did not have a legal obligation to disclose TT Durai's salary whereas UOB had to disclose Wee Cho Yaw's renumeration. Link: IRAS guidelines on charities.

Also your use of the word "dishonest" is rather brave. Not scared kena sue meh?

Agagooga said...

After a failed defamation suit which turned into a humongous PR disaster, I doubt they're going to sue anyone for a while. Especially since Mr Wang Zhen is anonymous.

Anonymous said...

there is actually a full transcript of the case on ST Interactive and it did look like what you mocked up ;)

Anonymous said...

Oh, forgot to put this other link: Charities Act : for info.

I sincerely hope agagooga is right but I am also paranoid.

akikonomu said...

We should NEVER forget that Durai and the NKF was publicly held by our million-dollar ministers as the poster boys for the new "free market charity" model of welfare organisations. And then, NEVER forget that the same ministers refused to hold these charities to the same corporate/financial governance standards required of any market enterprise entity.

I fear people have forgotten that Durai didn't succeed on his own, but through the active support of Singapore's elite leaders...

Gilbert Koh aka Mr Wang said...

"Could Durai have refused to answer Davinder on the question on whether the suit should be dropped?"

Not answering doesn't help, because by then, silence would simply be taken by the judge to mean:

"Ha, the fella can't even think of anything helpful to say for his own case."

... which would, of course, be exactly the case.

Frankly, Davinder was just being a showboat and going for the "drama" effect, when he asked Durai whether he thought that the case should be dropped.

One doesn't need to ask questions like that during cross-examination. In fact, technically it is an "irrelevant" question.

Of course, by then, Durai was already feeling quite devastated so it was probably with some relief that he said, "Ok, I drop the case."

Frankly, legally it was probably all over much earlier, when Durai admitted (earlier in the cross-examination) that SPH was not motivated by malice in publishing the article.

This is because thus admission would have allowed SPH to rely on the defence of "fair comment" on a matter of public interest.

The "fair comment" defence doesn't work if the defendant had acted maliciously. But since Durai admitted under Davinder's ferocious cross-examination that SPH was not acting maliciously, SPH would already have been able to establish that defence.

Possibly, Durai also decided to drop the case because he realised that if he didn't, Davinder would simply cross-examine further and further, and dig up more dirt ...

... and horrors, after finishing with Durai, Davinder would demand to cross-examine the other members of the NKF board, one by one, and systematically murder them in cross-exam.

My suspicion in this case was that Michael Khoo's (thin) hope was that he could confine the trial to the SPH article strictly - ie no questions about anything not mentioned in the article. Then when Davinder started to talk about the financial statements etc, Michael probably objected violently and said these were not relevant as the statements etc were not even mentioned in the SPH article. Davinder and Michael probably then argued the point before the judge, and Lee Meng probably ruled that Davinder's line of questioning was relevant, and permitted Davinder to continue. At that point, Michael probably realised it was game over. A short time later, Durai threw in the towel. Frankly, I think SPH could have won even if Lee Meng had been stricter and had disallowed Davinder from asking so many questions. But the win wouldn't have been so dramatic, so exciting and not so much dirty linen would have appeared in public.

Anonymous said...

OMGosh. Brilliant piece. Has mr brown seen wat u wrote?? He relli shd, or else he'll continue to hv misplaced sympathy, as many others hv currently. Question of integrity at stake, not the amt TD is earning - though tts anot story altogether, whether CEOS of non-profit orgs shd be earning tt much. Again, aptly explained by u -if such orgs r subjected to same regulatory practices as commercial orgs r under, then i'm sure the anger of many wud be appeased.. Thanks for writing such well-articulated thoughts, which echo wt many think but du not hv the capacity to express. ~Leste

Anonymous said...

You must the Brownie that "You cannot compare an apple to and an orange and says that apple is better than orange"
afterall apple and orange are 2 different things. Just as a charity organisation comparing to a profit-maximising company

Anonymous said...

Mr Wang also miss point lah...

in reporting an Incident, it is only fair for both sides to be given the chance to air their views.

No doubt in court, much was said by Singh and few my Mic, but newspaper cannot simply have tunnel vision and never give background and balanced reporting to the whole thing.

Morever, by admitting the Affidavit, it is tantamount to those words being "spoken" in court, so by right SPH should have also stated out the points made in the affidavit to provide balanced reporting.

kapish? :)

Sheepish said...

Thank you. I'm sure we gained a crucial piece here!

Anonymous said...

There is a difference between for-profit and not-for-profit. In a for-profit company, it is appropriate for the directors to be paid high salaries when business is good, because the company is there to make money for the shareholders, and employees should be rewarded for doing a good job.

But in a not-for-profit, the aim is to help the poor, sick, etc. The CEO is not just there to manage a few millon dollars and run an organisation, he is also there to lead, to spread the vision, to carry on the mission. I would say if he does not have a heart for the needy, he should not be the CEO. If he feels he needs the $600k for himself, instead of giving it to the needy, he is an unsuitable leader.

Anonymous said...

I wrote an article defending Durai's pay too. I think what Mr Brown and I believe is that 600K is not too ridiculous a sum for a CEO of a non-profit.

However, I believe that we are similarly outraged at the lack of transparency and other indiscrete spending. However, I believe that the rage is wrongly directed at the salary and not so much the disturbing lack of transparency.

Anonymous said...

You pay for quality, for profit or not for profit...

What about our Government then? You begrudge them their pay too? :)

dogfather said...

But the point still remains that the ST coverage was excessive, and the word for word transcripts were unprecedented.

Anonymous said...

This issue makes one question the integrity of the NKF management.

jeffyen said...

hahaa, I think what's even more unprecedented was the Mrs Goh's comments were allowed to be published uncensored! Truly, some levee somewhere has broken...

Anonymous said...

Honestly, half-a-million for a CEO is not much. Although it would have been in better taste if he had 'donated' his entitlements instead of maximising them.

Let's remember though that the issue we should take up is corporate governance.

Not just for the NKF but all the other charities like the ComChest, etc. How much do we really know about the espense and surplus ratios in these organisations?

Practically zilch.

ps. btw, Mr Wang, great piece :)

Sleepless in Singapore said...

If Mr Brown wanted to compare NKF with commercial organisation, then we the donors are the shareholders. Do shareholders have a say on things like salaries and perks of CEO?\ etc.

Anonymous said...

mr wang, it's been an enlightening piece at times, as usual.

and for those who feel the sph coverage is excessive, think the casino debate. if not for the super-high level of interest, would they have bothered?

as for putting up the transcript, they can't win can they? picking choice quotes to illuminate their stories would have lent them to accusations of biased reporting.

Anonymous said...

it is sad that after having done so much the man has to take some much flak. I would suggest that we look at all the good things he had almost singlehandedly done from the time NKF was located alongside Kwong Wai Shiu Hospital at Serangoon Road to its present premise at Kim Keat Road. Do we know how many thousands of KIDNEY FALURE PATIENTS benefitted from NKF?
Remember, Before we throw the first stone look at the mirror and ask, are we really all saints that we now start a hatred campaign. Let Us move on please for heaven's sake.
Need I say more

Anonymous said...

There is such a thing as personal ethics and self check.If any person in his/her own perspective thinks that s/he has done no wrong,then,there needs no self doubt.However,s/he knows that as long as this issue is kept secret,so much the better!
In this case,if a person is chosen to run a charitable organisation and using the hard earned cash of donors to be part of his salary and thinking $600,000 is ok,then,it's ok for him.
Again,as long as this fact is hidden,all is OK.But now it is public knowledge.Fortunatedly for us,the public,we have a different set of perspectives and do have a say in what we donate,hence the huge outcry against such nonsense.
It is all about knowledge(or lack of it) and the decisions we make.I am sure TT would be very happy if nobody knew the truth.
There is another case in point.On a global scale,there is another organisation ,which i won't mention,that collects money from donations of it's folowers.It is very,very rich and the money it collects are seldom used for helping the poor around the world.It has huge collections of fine arts worth millions hidden in it basements and some are displayed publicly.It is supposed to do good for humanity and yet,while the poor and sick suffer,the assets that it accumulated thru the centuries has seldom be used for this purpose.
What can the follower's do? Continue donating?Let local governments make the fact known as to how much is collected and where it is sent to and how much is actually used for helping mankind?
I know it needs deep soul searching and will incite anger and denial if the fact is known but,in this hard times,starting to do what is right and wrong will make our lives better.

andrew said...

hey Mr Wang, you rock! Thanks for all that explanation on court procedures...makes me wonder if I should've studied law instead of lor

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