No one wants to talk about the big elephant standing in the room. But we are. And we are not just going to talk about it, but we are going to put a name to it as well. The one question media organisations have been skirting around, but which must be answered, is why CEO Dr Han Cheng Fong left Fraser & Neave so suddenly. Amazingly, despite all that’s been written about his departure, no one has been game to say why. Least of all, F&N itself.

The media has correctly made the connection between the fact that the CEO of six years is leaving just before former SingTel CEO Lee Hsien Yang takes over from Michael Fam as Chairman on October 15. At best, this is sheer coincidence. There are plenty of people at F&N who've officially denied that CEO Dr Han Cheng Fong's surprise departure last Friday was due to the personalities involved.

But how come no one has dug deeper and asked, if not personalities, then what?

The company announced last Friday that "the cessation arises from differences of opinion with the Board which are unconnected with the financial position or performance of the Company or its subsidiaries". The reason the company announced this much is because the Singapore Exchange forced it to, under new regulations where companies can't just say "for personal reasons", or similar meaningless sweeping statements, which simply open the floor for wild speculation. Because, we all know no one ever leaves a job just "for personal reasons".

But it didn't say why he left. It just listed why he didn't leave. He didn't leave because of personality clashes. He didn't leave "because of the financial position of the Company or its subsidiaries".

Why did he leave, then?! Is this supposed to be some sort of guessing game? The point of the SGX's new regulations was for companies to become more transparent, not to keep investors guessing. F&N may have followed the letter of the law with its original disclosure. But did it follow its spirit? Afterall, by keeping the market guessing, you now have the rumour mill going strong.

For example, here are some theories floating around in the market for why Dr Han left. For the litigious among you, no, we have no evidence any of these are correct or incorrect.

1. He left because he's long had an acrimonious relationship with the board. I've heard this a couple of times, one person even quoting conversations overheard in a Silver Kris lounge. But why is this only blowing up now, after six years in the job? And so shortly before Lee Hsien Yang's arrival?

2. He left because he couldn't work with incoming chairman Lee Hsien Yang. Despite this being the obvious implication of all the speculation, I find this hard to believe. Afterall, Lee managed Singapore's largest company before taking on the appointment of Chairman at F&N. His management team motto at SingTel was, "we're a star team, not a team of stars". Doesn't sound like the sort of person who elbows other people out just because he doesn't like them, or because they have different views.

3. Dr Han left because Lee wants to be CEO of F&N, not just the Chairman. This is more interesting. Afterall, the Chairman is taking on the role of CEO until a replacement for Dr Han is found. When Michael Fam leaves October 15, that "Chairman & CEO" will be Lee Hsien Yang. Could it be that Lee wants an executive appointment, in addition to Chairman? He already stirred controversy by being paid a consultant's fee, in addition to becoming Chairman.

I am also disinclined to believe this theory. The Chairman & CEO's roles at SingTel were split. SingTel has won awards for strong corporate governance. I find it hard to believe Lee Hsien Yang will implement anything short of the same standards at F&N. Therefore, this theory will be disproved the moment a successor in the CEO's seat is found, separate to the Chairman.

Questions, questions, questions.

And all of these could have been avoided if F&N just laid out the facts. Instead, it is going to be the subject of more and more speculation. Is this the sort of start Lee Hsien Yang wants at the company?


Mark Laudi

Labels: F N, Fraser Neave, Han Cheng Fong, Lee Hsien Yang, Michael Fam