Post-IPO Firm Valuation and Corporate Governance of Politically

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					                    Post-IPO Firm Valuation and Corporate Governance of
                           Politically Connected Firms in Singapore




                                          James S. Ang
                                       College of Business
                                     Florida State University
                                   Tallahassee, FL 32306-1110
                            Tel: (850) 644-8208; Fax: (850) 644-4225
                                        jang@cob.fsu.edu


                                         David K. Ding*
                               Lee Kong Chian School of Business
                               Singapore Management University
                                 Singapore 178899, SINGAPORE
                            Tel: (65) 6828-0245; Fax: (65) 6828-0427
                                      davidding@smu.edu.sg

                                              and

                                       Tiong Yang Thong
                                       School of Business
                                        SIM University
                                Singapore 599491, SINGAPORE
                                      Tel: (65) 8113-8252
                                    tythong@unisim.edu.sg




JEL Classification: G32; G34; O53

Keywords: Political connection; Corporate governance; IPO; Singapore

*
    Corresponding author. All comments are welcome.




                                                                          i
                   Post-IPO Firm Valuation and Corporate Governance of
                          Politically Connected Firms in Singapore


                                            ABSTRACT

       In this paper, we explore the relationship between political connection and firm value of

newly listed companies in Singapore from 1997 – 2002. Using Tobin’s Q as a proxy for firm

value, the objective of this paper is to investigate whether there is a significant difference

between politically connected firms and those that are not. We find that, in Singapore where

corruption is low, political connection does not contribute significantly to firm value. These

results are consistent even after we have controlled for firm specific characteristics such as firm

size, leverage ratio, profitability, year of listing and industry type. At the end of the report, we

also find that corporate governance in Singapore is not an important factor in explaining the

variation of firm value in the short run. Robustness checks are performed, showing that a

number of alternative political connection variables produce similar results.




                                                                                                  ii
                  Post-IPO Firm Valuation and Corporate Governance of
                         Politically Connected Firms in Singapore

I      INTRODUCTION

1.1    Research Objectives and Main Findings

       While the value of political connection to firms has received considerable research

(Goldman, Rocholl and So, 2006; Imai, 2006; Mian and Khwaja, 2004; Ang and Boyer, 2000) in

recent years by academics, results on whether political connection enhances firm value however,

are mixed. Intuitively, the nature of institutional environment in the country seems to be the

main influencing factor. Are the benefits accompanying politically connected directors greater

in countries characterized by high level of corruption, or are politicians the same everywhere?

As such, given Singapore’s reputation of being corruption-free, the objective of this paper is to

examine the impact of political connection on firms operating in such an environment.

       Politically connected firms may benefit through easier access to debt financing, lower tax

and stronger market power. Such benefits are generally larger when the firm operates in a

country with high corruption, low protection of property rights, a highly interventionist

government or a non-democratic government (Faccio, 2003). However, the extent to which

political connection enhances firm value remains a question to be asked. Evidence from the

regime of President Suharto indicates that investors deem political connection with the President

to be valuable which accounts for a quarter of the firms value (Fisman, 2001), as opposed to

China where firms with political connection underperform their counterparts by 37% in the three

year post-IPO stock returns (Wong and Fan, 2004). Moreover, political connection is a risky

investment in countries with macroeconomic and political instability because it can lose its value

overnight when the government fails to get re-elected (Leuz and Oberholzer, 2006; Goldman,

Rocholl and So, 2006). More than just gaining economic benefits, firms may appoint politically

connected directors for their vast knowledge and experience of government procedures as well as
                                                                                                1
their insights in conjecturing government action or simply, their ability to enlist the government

in the firm’s interest or to forestall governmental action inimical to the firm (Agrawal and

Knoeber, 2001).

        Another concern which this paper addresses is the relationship between political

connection, corporate governance and firm value. If politically connected directors influence

their firms’ governance structure to align it accordingly to the government’s initiative, it serves

as a platform demonstrating that they are exposed to appropriate monitoring mechanism, which

may boost investors’ confidence and thus translating to higher firm value. Moreover, credible

corporate governance is also a prerequisite for firms to access global capital markets and reap the

full economic benefits.

        In the context of Singapore, it is interesting to investigate the impact of political

connection on firm value.         Not only was Singapore ranked 5th in the 2006 Transparency

International Corruption, it is perceived as having the highest standards of corporate governance

in Asia.1 Furthermore, the International Monetary Fund (IMF) indicated in their financial system

stability assessment of Singapore that a competent judiciary was one of the cornerstones for

Singapore’s well-regarded efficient legal system, giving it top marks for the reliability of

Singapore’s legal, supervisory and institutional framework.2 The results of our research would

give a hint to the extent to which political connection makes a worthy investment in such an

environment like Singapore.

        We define a company to be politically connected if at least a member of the Board of

Directors that are listed in the company statutory filings is (1) minister of the Singapore Cabinet,

(2) serving as a member of parliament (MP) or (3) a military leader or ambassador of Singapore3.

First, we investigate the relationship of political connection and the valuation of newly listed
1
  “Political and Economic Consultancy” June 2006
2
  “Singapore Judiciary & Legal System Stays at the Top” Subordinate Courts Media Release
3
  Details of politically connected directors can be found in Appendix 3.
                                                                                                  2
companies from 1997- 2002. We employ Tobin’s Q as a proxy for the valuation of newly listed

firms in Singapore for each of the three years after their issue and compare the difference

between companies with and without political connection. In the final part of our research, we

explore the relationship between political connection, corporate governance and firm value.

       The results of our paper show that political connection does not affect the valuation of

firms significantly. These results remain consistent even after we have controlled for firm

specific characteristics such as size, leverage ratio, profitability, varying time differences and

industry characteristics. Robustness checks are also performed using a number of alternative

political connection variables, namely political connection dummy variable, political connection

percentage variable, current and former political connection variable, as well as levels of

political connection variables, which eventually produce similar results.

       The remainder of this paper is organized as follows. In Section III, we give a brief

introduction of the corporate governance in Singapore. Section II reviews the prior literatures on

political connection as well as our hypothesis. Next, we present our data and methodology in

Section IV. Our research outcomes and results are documented in Section V, before we sum up

our research and provide a conclusion in the final section VI.



II     CORPORATE GOVERNANCE OF SINGAPORE

       Following loosely the Anglo-American model, the Singapore corporate governance

system revolves around capital market controls of managerial behaviour (Prowse, 1998). Capital

market in Singapore is thin (less than 500 listed companies were on the Singapore Stock

Exchange in 2002), and equity is firmly held among a small group of investors including the

Government of Singapore, multinational and regional corporations, wealthy individuals and

entrepreneurial families. The supremacy of government-linked corporation (GLCs) is a highlight

                                                                                                3
of the Singapore economic landscape, accounting for approximately 24% of the stock’s market’s

total capitalization of US$287 billion and controlling over a tenth of the country’s economic

output (Ang and Ding, 2006). Therefore, a study of corporate governance in Singapore would

not be comprehensive without understanding the role and governance structures of the GLCs.

Typically, the boards of directors of the GLCs are populated by senior civil servants and political

appointees, making board appointments an oblique method for controlling and monitoring

corporate activities and business practices by the government.                This government centred

corporate governance system can be potentially effective if strong governance is regarded as

being in keeping with effective industrial policy (Phan and Yoshikawa, 2005). To buttress this

view, Singaporean GLCs have been shown to have higher valuations and better corporate

governance than a control group of non-GLCs, even after controlling for firm specific

characteristics such as profitability, leverage, firm size and foreign ownership (Ang and Ding,

2006).

         Since 4 April 2001, Singapore has enforced a range of reforms to improve governance.

The Council on Corporate Disclosure and Governance 4 is established to accentuate the

importance of having good corporate governance in Singapore in order to give investors

confidence and position Singapore as a leading business and financial hub. On top of that, the

Singapore Exchange Listing require listed companies to describe in the annual reports their

corporate governance practices with specific reference to the principles of the code of corporate

governance, as well as disclose and explain any deviation from any guideline.5 Indeed, this is

the impetus for Singapore being perceived as having the highest standards of corporate

governance in Asia.6



4
  Council on Corporate Disclosure and Governance www.ccdg.gov.sg
5
  Code of Corporate Governance 2005, Disclosure of Corporate Governance Arrangements
6
  “Political and Economic Consultancy” June 2006
                                                                                                   4
        In the context of Singapore, it is interesting to investigate the extent of widespread

phenomenon of preferential treatment of companies due to their political connections.

Government officials who abuse their powers to influence economic value of public corporations

for private agendas without public merit risk serious legal and political sanctions.7 On top of that,

Singapore was ranked 5th in the 2006 Transparency International Corruption Perceptions Index

out of 163 countries polled, making it the least corrupted country in Asia. The index defines

corruption as the debasement of public office for private gains and measures the scale to which

corruption is deemed to exist among a country's public officials and politicians. This clearly

demonstrates the exemplary level of integrity displayed by the officials and politicians in

Singapore.

        There are a few anecdote stories to buttress the view that politically connected firms in

Singapore do not enjoy favouritism treatments from the government. From April 2007, the

postal sector will witness new players to be introduced in both domestic and international mail

services, after a 15 years monopoly hold by SingPost. 8 Also, corporate tax rate is applied

uniformly across all businesses and industries, including the recent reduction of at two

percentage point. These are evident that politically connected firms are not specially protected

by the government to reap economic benefits.

        Furthermore, a survey of U.S. corporate headquarters by Political and Economic Risk

Consultancy (PERC) reflected that businessmen do not regard political risks in Singapore as an

exceptionally major concern, ranking it the lowest relatively to its Asian peers.9 A report by

PERC also states that Singapore Legal System is effective, impartial and responsible in dealing

with business issues. The Singapore Legal system is viewed to be highly efficient, effective and


7
  “Prevention of Corruption Act” www.statutes.agc.gov.sg
8
  Mr Lee Hsien Yang, the brother of Prime Minister Lee Hsien Long, currently serves as an independent director in
SingPost’s Board of Directors.
9
  “The Importance of Political Risk” by Robert Broadfoot, Political and Economic Risk Consultancy, Ltd
                                                                                                               5
professional in dealing with business disputes, while contractual arrangements are secure and

easily enforceable with no favouritism shown to local companies.

       In an environment where corruption is low, coupled with the existence of frameworks

and an effective legal system, we investigate the impact of politically connections on firms. In

this vein, we consider two issues, namely, post-IPO firm valuation and corporate governance.



III    LITERATURE REVIEW AND HYPOTHESIS

3.1    Political Connection and Firm Value

       Political connection is a double-edged sword; it can either jeopardize or enhance firm

value. In China, firm performance is positively affected by the curtailing of political control by

increasing the firm’s flexibility in labor deployment and enforcement of more effective corporate

governance mechanisms (Xu, Zhu and Lin, 2002). Likewise, political connection of CEOs

seems to have a deleterious effect rather than help firm performance. Firms with politically

connected CEOs underperform those without politically connected CEOs by 37% in the three

year post-IPO stock returns (Wong and Fan, 2004). In addition, performance measures (market-

to-book assets and return on assets) of state controlled firms are negatively related to the level of

state ownership (Chen, Fan and Wong, 2002). Similarly, evidence from 47 countries shows that

politically connected firms underperform non-politically connected firms on an accounting basis,

notwithstanding the fact that they are able to derive considerable benefits from the political

connections (Faccio, 2006).

       One possible explanation is that such practices where politicians channel resources

towards favoured firms can lead to distortion of incentives, misallocation of investments and

increase in the extent of corruption (Shleifer and Vishny 1994).          Furthermore, if political

connection was used as a prime determinant of profitability, this would induce distorted

                                                                                                   6
investment decisions (Faccio 2006), and consequently, lead to lower firm value. Investments in

political ties are also notably risky and are less likely to be a source of long-term value in

environments with macroeconomic and political instability because the value of political

connection can be lost over night when the government fails to be re-elected into the parliament.

This is evident in Indonesia, where firms face difficulties building connections with a new

government when their patron falls from power, leading them to underperform under the new

regime and subsequently to turn to foreign financing (Leuz and Oberholzer, 2006). The same

phenomenon is also observed when companies connected to the Republican Party increase in

value following the Republican Party win in the 2000 Presidential Election while companies

connected to the Democratic Party experienced a negative stock price plunge (Goldman, Rocholl

and So, 2006).

       On the other hand, politically connected companies may benefit through easier access to

debt financing, lower tax and stronger market power (Faccio, 2003). There are several anecdote

stories relating to favouritism towards politically connected firms. According to a working paper

issued by International Monetary Fund, the new economic policy in Malaysia gave priority to

Bumiputras for government contracts, in addition to other benefits such as increased access to

capital (Johnson, Kochhar, Mitton and Tamirisa, 2006). Also, Malaysian bankers are often

compelled to extend loans for projects (undertaken by politically connected firms) even if they

are forecast to be unprofitable (Friedman, 1999). This is further supported in a research on

Pakistan, where political firms borrow twice as much and have 50% higher default rates (Khwaja

and Mian, 2004). Sapienza (2002) similarly purports that discrepancy in the lending behaviour

of state-owned banks is affected by the electoral results of the party affiliated with the bank.

       Besides an easier access to credit, politically connected firms enjoy other forms of

benefits. Public officials and politicians clandestinely sell underprovided goods and a spectrum

                                                                                                   7
of rent-generating advantages to individual firms, often allowing firms to shape the rules of the

games to their advantage at considerable social cost (Hellman, Jones and Kaufmann, 2000).

Alternatively, directors may be appointed for their rich knowledge and experience of government

procedures and their insights in anticipating government policy or their ability to enlist the

government in the firm’s interest or to forestall governmental action pernicious to the firm

(Agrawal and Knoeber, 2001).

       Moreover, companies with political connection are more likely to win a tender as a result

of protection of corrupted politicians or bureaucrats. Ex-prime minister of Thailand, Thaksin

Shinawatra and his party enjoyed private gains from political connection by transferring

government wealth to his family business under Thailand’s reformed institution. Consequently,

powerful business groups strive to directly hold influential public offices in order to change

economic policies in their favour (Imai, 2006). The intricacy of bureaucratic procedures and the

poor planning competence of public administrative lengthen completion times for public works,

legitimating the use of such favouritism practices in the awarding of contracts. The awarding of

government contracts to companies without basic qualifications, resources and expertise is, not

surprisingly, often with direct link to political parties (Donatella and Vannucci, 1997).

Additionally, politically connected firms are disproportionately more likely to receive relief

when the International Monetary Fund or the World Bank provides financial aid to the

government, suggesting that the mechanism of financial assistance economic distress is another

avenue where political connection can influence the allocation of capital (Faccio, Masulis and

McConnell, 2006). Similarly, empirical evidence from Korean firms and their cross-border

alliance partners show that investment in political connection is one of the most economically

and imperative determinants of access to cross-border alliances, indicating that socio-political

network investments in regional ties are of paramount importance (Siegel, 2004).

                                                                                               8
        However, it is important to note that companies that form political connections with

government officials to obtain perks or preferential treatment are characteristic not only of

countries traditionally labelled as corrupt, but are generally found in countries known for their

transparent systems.10 In the United States, about half the people who leave government jobs,

including those who served in Congress, end up working as lobbyists, which pay more. They

work for corporations trying (often successfully) to influence the decisions of the government

agencies they left. 11 This is evident that political connected directors have the power and

capability to bring benefits to firms by influencing the laws under which the firms operate, as

well as the possibility of winning government contracts for the firms, and therefore, enhancing

firm value.

3.2     Political Connection and Corporate Governance

        Corporate governance provides the structure through which the objectives of the

company are set, and the means of attaining those objectives and monitoring performance are

determined. Good corporate governance should also provide proper incentives for the board and

management to pursue objectives that are in the interests of the company and its shareholders

and facilitate effective monitoring. 12 Serving as a direction and control for companies to

enhance their wealth generating capacity, one of the main goals of corporate governance is to

protect minority shareholders from expropriation by managers or controlling shareholders. It is

intuitive to think that with high standards of corporate governance, its corollary is enhanced firm

value. Indeed, not only have good and effective corporate governance practices been suggested

to lead to higher valuation of firms (Chong and Lopez-de-Silanes, 2006; Black, Jang and Kim,

2003; Morck, Shleifer and Vishny, 1998), the OECD and its member governments have


10
   “Vanderbilt Study Shows Strong Ties between Companies and Politicians Worldwide” Vanderbilt Owen Graduate
School of Management, 2003-2004
11
   “In Bed with Business” Caribbean Business, 4 August 2005
12
   OECD Principles of Corporate Governance, 2004
                                                                                                          9
increasingly recognized the synergy between macroeconomic and structural policies in achieving

fundamental policy goals, where corporate governance is one key element in improving

economic efficiency and growth.13

           Corporate governance of a company may strengthen with the introduction of politically

connected directors. This occurs when such directors influence the company’s governance

structure to align it with the government’s initiative. A research by Ang, Chew and Lee (2004)

purports that politically firms in Malaysia have more active boards (proxied by board meetings

held) and more directors possessing business expertise in accounting, finance and law. By

selecting such strong corporate governance structures, politically connected firms show that they

are exposed to appropriate and adequate monitoring mechanisms and therefore, are less likely to

expropriate shareholders’ wealth.          Besides, effective corporate governance reduces “control

rights” stockholders and creditors confer on managers, increasing the probability that managers

invest in positive net present value projects (Shleifer and Vishny, 1997) while firms with

separate CEO and chairman positions are shown to be more valuable (Yermack, 1996).

However, it is important to note that within the range of board composition present today in large

public companies, there is no convincing evidence that greater board independence correlates

with greater firm profitability or faster growth (Bhagat and Black, 1999).

           The second school of thought purports that having a politically connected director who is

highly influential may suggest a conflict of interests when he strives to exploit the firm for his

political, social and economic interests, thereby directing benefits to himself. Chang and Wong

(2003) show that the decision-making power of local party committees relative to managers is

negatively associated with firm performance, suggesting that political costs associated with party

control over managers is more inimical to firm performance than are managers’ agency problems.


13
     OECD Principles of Corporate Governance, 2004
                                                                                                 10
A research by Fan and Wong (2004) purports that a detailed examination of the board

composition at IPO shows that firms with politically-connected CEOs are more likely to appoint

bureaucrats to the management teams and boards of directors, while they appoint fewer directors

with germane professional background or prior business experience, nor any representative of

minority shareholders. This drastically lowers the level of corporate governance as the firm

where management will be monitored lightly so as to ease scrutiny of their rent-seeking activities.

           The degree to which companies observe basic principles of good corporate governance is

an increasingly important factor for investment decisions. In order to reap the full benefits of the

global capital market, firms must have credible corporate governance and adhere to

internationally accepted principles. 14          As such, firms operating in a weak institutional

environment are less inclined to access global capital markets because of the additional scrutiny

and expanded disclosures that might be at odds with close political ties at home since these ties

can be best exploited when little is disclosed about the firm (Leuz and Oberholzer, 2006).

3.3        Hypotheses: Political Connection and Firm Value

           Essentially, there are two competing hypotheses which we will be testing. On one hand,

we have qualms that political connection in Singapore can lead to an accretion of firm value. On

the other hand, if political connection summons high standards of corporate governance, it has a

potential to indirectly enhance firm value.

           It is argued in the literature that politically connected firms enjoy benefits such as easier

access to debt financing, lower taxation and stronger market power (Faccio, 2002). Additionally,

it is suggested that politically connected directors, with their knowledge of government

procedures and associations with key government decision makers, can help their company

benefit from preferential treatment in competition for government contracts and greater


14
     OECD Principles of Corporate Governance, 2004
                                                                                                     11
efficiency in regulatory administration. However, in Singapore where corruption is low, coupled

with the existence of frameworks and an effective legal system, the probability of political

connection to bring such potential economic to the company, which could translate into higher

corporate value, is doubted. Our empirical test basically involves investigating the Tobin’s Q

valuation between firms that are politically connected and those that are not in the post-IPO

years, ceteris paribus.

           Hypothesis 1a: Firm value is not related to the degree of political connection.

           Next, we are interested in finding out if political connection has any relation with

corporate governance which would indirectly affect the firm value.              Politically connected

directors influencing their firms’ governance structure to align it with the government’s initiative

may result in credible and strong standards of corporate governance. These can translate into

higher valuation of firms (Chong and Lopez-de-Silanes, 2006; Black, Jang and Kim, 2003;

Morck, Shleifer and Vishny, 1998), as corporate governance is one key element in improving

economic efficiency and growth.15 As such, we formulate the following hypothesis to test if

political connection indirectly enhances firm value through stronger corporate governance.

           Hypothesis 1b: Corporate governance is positively related to firm value.



IV         DATA AND METHODOLOGY

4.1        Definition of Political Connection

           In this research, we examine only the Board of Directors that are listed in the company

statutory filings. A company is defined to be politically connected if a member of the board is (1)




15
     OECD Principles of Corporate Governance, 2004
                                                                                                  12
minister of the Singapore Cabinet, (2) serving as a member of parliament (MP) or (3) a military

leader or ambassador of Singapore.16



4.2     Data and Sample Design

        Financial and IPO information of firms are mainly garnered from the Singapore

Exchange website 17 , OSIRIS database, individual IPO prospectus, and the annual financial

statements of the companies. From the IPO prospectus and the annual financial statements, we

obtain the profile of each of the directors. A total of 989 directors are covered in our sample of

150 companies. We manually identify directors who have political connection according to our

definition in Section 4.1.

        Table 1 presents summary descriptive statistics of the entire sample of the newly listed

companies. Our sample consists of 53 politically connected companies and 97 non-politically

connected companies which are newly listed over a six year period from 1997 – 2002.18 This

translates to 35.33% of our sample IPO companies that have political connection. In addition,

from the profile of the 66 politically connected directors we have identified, 81.5% are acting as

independent directors in the board, while 56.1% are former political appointees. Also, 9.1% are

ministers of the Singapore Cabinet, 16.7% are either military leaders or ambassadors of

Singapore, and the largest proportion, members of the parliament, forms 74.2%.

        Companies are grouped according to three board industry categories, namely (1) hotels/

restaurants, properties and construction, (2) manufacturing and (3) services, utilities, multi-

industry and transportation.       There are 25, 67 and 58 companies in the various sectors

respectively. Of these, the services, utilities, multi-industry and transportation sector has the


16
   Details of politically connected directors can be found in Appendix 3.
17
   “SGX. Tomorrow’s Market, Today” www.sgx.com.sg
18
   As we require financial information of companies 3 years after the listing of IPO, we can only conduct our
research up to 2002.
                                                                                                          13
highest percentage of political connection (43.10%), whereas the manufacturing sector has the

lowest percentage (26.87%).

        Data of government contracts is collected from the Government Electronic Business

(GeBIZ) website19. The Singapore Government buys goods and services amounting to S$10

billion each year. Hewlett-Packard had been awarded contracts, worth more than $10million, to

manage the information technology requirements of seven Singapore government organisations

for three years 20 . From 1 April to 31 December 2004, 90% of the 594 government tender

contracts valued up to S$100,000 each went to small and medium enterprises with net assets less

than S$500,00021. Also, we should take note that there are certain contracts which relate to

national security are only open to invited firms for tender.            Availability of information is

confined to tenders and quotations made in year 2006 only. In addition, considering the costs

involved in appointing politically connected directors, we believe that companies would have

less incentives or motivation to invest their efforts if the accompanying benefits from the value

of government contract awarded as a result of political connection is not considerable. As such,

from a population of 17172 awarded government contracts, we eliminate contracts which have a

size of less than S$500,000, obtaining a representative and relatively reasonable sample of 152.

Of which, 44.7% of the companies are in the industry of hotels/ restaurants, properties and

construction, 15.8% in manufacturing and 39.5% in services, utilities, multi-industry and

transportation.

4.3     Computation of Tobin’s Q

        Tobin’s Q is an important and widely accepted measure of corporate performance. As

such, we make use of Tobin’s Q as a proxy for firm value, which is the ratio of the market value



19
   “GeBiz Partner: Tenders and Quotations” www.gebiz.gov.sg
20
   “HP wins Singapore Government Contracts” Reuters News, 11 January 1999
21
   “Contracts and Tenders” EnterpriseOne www.business.gov.sg
                                                                                                   14
of a company’s assets (measured by the market value of outstanding stock and debt) to the

replacement costs of the company’s assets, and is approximated by:

              MV (CS ) + BV ( PS ) + BV (CL) + BV ( LTD ) − BV (CA)
         Q=
                                     BV (TA)

where MV(CS) is the market value of common shares, BV(PS) the book value of preferred

shares, BV(CL) the book value of current liabilities, BV(LTD) the book value of long term debt,

BV(CA) the book value of current assets, and BV(TA) the book value of total assets. This

simplified formula of Q value accounts for at least 96.6% of the variability of Tobin’s Q (Chung

and Pruitt 1994).

         A Tobin’s Q value of greater than one indicates that the company has a market value

greater than its recorded assets, which can be attributed to intellectual capital or positive market

sentiment of the company. As such, a higher Tobin’s Q value is associated with superior firm

value.



4.4      Methodology

         The main objective of our research is to investigate the firm value of Singapore listed

companies that are politically connected in comparison to those that are not. By means of

univariate and multivariate analysis, we test our hypotheses with respect to control variables.

Robustness checks are also performed using a number of alternative political connection

variables. Other than using political connection as a dummy variable which takes on the value of

one when at least one of the directors is politically connected, we also make use of the political

connection percentage variable, which is basically the number of politically connected directors

expressed as a percentage of the total directors in the Board. Additionally, in place of these

variables, we insert dummy variables to reflect if the directors are current or former political


                                                                                                 15
appointees and lastly, in the last regression, we similarly use dummy variables to represent the

levels of political connection.

        In order to avoid multi-collinearity in our multivariate analysis, we first run the Pearson

correlation for all the independent and dependent variables. Table 2 presents the results. We

identify strong correlation between two variables if they share a high linear relationship which

are significant at the 1% level. As it can be seen from Table 2, the dummy variable of political

connection is highly correlated to the percentage of political connection variable at 0.886 (1%

significant level). In fact, all the alternative types of political connection variables are correlated

to each other at statistically significantly levels, indicating that we should run regressions on

each of these variables separately to avoid multi-collinearity.

        Next, to examine the association between company value and political connection, we

perform linear regressions with Tobin’s Q for each of the three years after the listing of IPO as

the dependent variable against the alternative political connection variables individually. Four

main models of regression will be utilized.22 The full regression model with all the control

variables is shown below.         To test for robustness, we will run different variations of the

regression.

        Value      = β 0 + β 1 Polconnect + β 2 LnTA + β 3 Leverage + β 4 ROE + β 5 GLC +
                      β 6 IPO98 + β 7 IPO99 + β 8 IPO00 + β 9 IPO01 + β 10 IPO02 +
                      β 11 Mfg + β 12 Svc + β 13 NonDual + β 14 ID% + ε
                                                                                           (1)
where the dependent variable is Value, which refers to the Tobin’s Q valuation of the company

after its IPO listing for 1, 2 and 3 years respectively.               Polconnect refers to the political

connection variable used. Control variables used in the regression models are as follows. LnTA,

refers to the natural logarithm of total assets. DEratio and ROE refer to debt-equity ratio and



22
  Other models we experimented with produce the same results. As such, in this research, we only highlight these
selected four models.
                                                                                                             16
return on equity ratio respectively. GLC is a dummy variable used, which takes on the value of

one when it is a subsidiary of Temasek 23 , and zero otherwise.                 The varying years in the

regression model are dummy variables which take on a value of one for the year in which the

IPO occurred, and zero otherwise. 24 The variables manufacturing and service represent the

dummy variable for which industry the company belongs to. Lastly, the variables NonDual

refers to non-duality while ID% refers to the percentage of directors in the Board who are

independent directors. ε is a random error term. The definitions of these regression variables are

presented in Appendix 1.

        Several control variables included in our research have been supported by anteceding

researches (Ang and Ding, 2006; Chong and Lopez-de-Silanes, 2006; Leuz and Oberholzer-Gee,

2003). We group our control variables into three sets, which would separately be introduced into

the regression models. The first regression model controls for firm specific differences, such as

firm size, leverage and profitability. LnTA, the natural logarithm of total assets, is used as a

measure of firm size. Together with the second variable, leverage, they are used as proxies for

mapping the risk profile of the companies. Next, ROE, return on equity, is also used as the third

variable to control for company’s profitability.              The second set controls for industrial

characteristics, namely, Mfg and Svc. The last set of control variables account for time varying

differences, which uses dummy variables to indicate the years in which the IPO is issued.

Through the use of a dummy variable, which takes on the value one when it is a company under

the Temasek umbrella, and zero otherwise, we also control for the company if it is a government




23
   These are firms in which Temasek Holdings, the investment holding arm of the Singapore Government, has at
least 20% stakes.
24
   As the total number of years examined is six years, we only need five dummy variables in order to avoid the
problem of serious multicollinearity. The Year1997 is left out because we feel that being the year in which the
Asian Financial Crisis occurred, the variable would be qualitatively different from the rest.
                                                                                                            17
linked company25, GLC. GLCs provide superior returns (on both assets and equity) and are

valued more highly through their better management of expenses than non-GLCs. Investors in

the Singaporean market do value the higher standards of corporate governance found in the

GLCs (Ang and Ding, 2006).

        Two variables, the percentage of independent directors variable and non-duality dummy

variable, are used as proxies for corporate governance. The former variable is an indicator of the

presence of a strong and independent element on the Board, whereas the latter variable illustrates

an appropriate balance of power, increased accountability and greater capacity of the Board for

independent decision-making, if the chairman and CEO positions are held by separate person.26

With an effective board, the opportunities for controlling shareholders and management to

expropriate funds are reduced.

        As mentioned earlier, four different regression models will be utilized, with a battery of

variables progressively added in. The first model regresses firm value on political connection in

the absence of all control variables. In the second model, we introduce firm specific differences

and industry differences as control variables. Next, we build on the previous model and add in

corporate governance variables. In the fourth model, we include the final set of control variables,

which is the time varying difference for the issue of IPO. Lastly, to examine the relationship

between corporate governance and political connection, we run regression of the political

connection variables on the non-duality variable, which is used as a proxy.




25
   These are firms in which Temasek Holdings, the investment holding arm of the Singapore Government, has at
least 20% stakes. Some examples of the largest companies include Singtel, DBS Bank, Singapore Airlines, PSA
International, SMRT Corporation, Singapore Power and Neptune Oriental Lines.
26
   Code of Corporate Governance 2005, Board Matters
                                                                                                         18
V       RESULTS AND ANALYSIS

5.1     Univariate Analysis

        By means of Levene’s T-test of independent means, we examine the difference in means

of the Tobin’s Q valuation for each of the three years after their IPO listing between politically

connected firms and those that are not. Our findings for Tobin’s Q valuation are presented in

Table 3. Tobin’s Q on average displays a slight incremental over the three years. Politically

connected firms on average enjoy a higher but statistically insignificant Tobin’s Q compared to

firms that are non-politically connected until the third year after IPO listing, with the largest

difference of 0.181 in the second year. This preliminary result indicates that in Singapore,

political connection does not necessarily contribute to higher firm value and the benefits such

connection may bring is limited in the short run.

5.2     Multivariate Analysis

        In Tables 4 - 7, we present the statistical results of ordinary least squares (OLS)

regressions using Tobin’s Q, a proxy for firm value for each of the three years after IPO listing,

as the key dependent variable. The estimated coefficients of OLS models and their respective t-

statistics are provided.

        Tobin’s Q is first regressed solely against the political connection variable in model 1

without any control variables. Consistently shown in Tables 4 - 7, model 1, in the absence of all

control variables, have negative adjusted R-square value, coupled with an insignificant F ratio.

This preliminary regression testing hints that political connection may not have strong predictive

power in explaining firm value. We then progressively add a battery of control variables to

perform various robustness checks shown in models 2 – 3, and finally a full set of control

variables in model 4. Political connection is found not to be significant in each of these

regressions.

                                                                                               19
       With reference to Table 4, models 2 - 4 show that adding control variables scarcely

changes the coefficient on political connection and the t-statistic remains insignificant even when

the regression becomes more representative with the increase in the value of adjusted R-square.

Moreover, F-ratio is reported to be significant at 1% level for the three subsequent models. We

also observe that albeit insignificant, political connection is positively related to Tobin’s Q in all

the models for all three years, suggesting that political connection may have a positive impact on

firm value. Model 4 implies that the incidence of political connection results in a greatest

increase of 0.203 in Tobin’s Q in the second year after the issue of IPO with a t-statistic of 0.928.

       We next test how the degree of political connection impacts Tobin’s Q. Similar results

are obtained when political connection dummy variable is replaced by the political connection

percentage variable, which expresses the number of politically connected directors as a

percentage of the total members in the Board. The same methodology for regression is exercised

here, introducing partial sets of control variables into the regression, and finally a full set of

control variables in model 4. The results are presented in Table 5, displaying similar results as

Table 4.    Even with the introduction of control variables in the subsequent models, the

coefficient of political connection variable does not change drastically and the t-statistic remains

insignificant. F-ratio is also reported to be significant at 1% level for the three subsequent

models. Model 4 predicts that an increase in political connection by 1 point results in an increase

of Tobin’s Q by 0.313, 0.566 and 0.549 respectively for one, two and three years after the issue

of IPO, albeit insignificantly.

       Both our regression results above hint that the existence of political connection and the

degree of political connection may have a positive impact on firm value, albeit insignificantly. A

general positive relationship is displayed, where the coefficient of political connection is the

largest in two years after the listing of IPO. This leads us to believe that political connection

                                                                                                   20
may be a contributing factor to firm value in the long run but our research is too short a term for

the economic benefits to materialize significantly.

       Next, we utilize alternative political connection variables as adjunct tests for robustness.

Table 6 presents our findings when current and former politically connected directors are

regressed against Tobin’s Q in place of the political connection variable. These are dummy

variables which take on the value of one when at least one of the directors fit into the description

of the above categories, and zero otherwise. Consistent to the previous results, these regressions

shows that being former or current political appointee does not have a significant difference in

firm valuation. Furthermore, the coefficients of both the variables display a mixture of positive

and negative values with the introduction of new sets of control variables, suggesting that they

are consistently not strong factors in explicating the variation of firm value.

       We test if the impact of the different levels of political connection on Tobin’s Q. Three

categories of political connections are used, namely, ministers of the Singapore Cabinet,

members of the parliament, and lastly, leaders of military and ambassadors of Singapore. These

are dummy variables which take on the value of one when at least one of the directors fit into the

description of the above categories, and zero otherwise. Similarly, four models are used with the

same sets of control variables developed earlier. Table 7 presents our findings. Model 1, in the

absence of all control variables, hints that being in the position of a leader of military or

ambassador of Singapore has a statistically significant impact on Tobin’s Q for the first and third

year after the listing of IPO with a coefficient of 0.734 and 1.014 respectively. The t-statistic is

significant at 5% and 10% levels. This result persists even after adding various control variables.

In model 4, with the full set of control variables, the variable has a coefficient of 0.921 and is

statistically significant to Tobin’s Q one year after the issue of IPO at 1% level.             The

corresponding adjusted R-square is 25.5%. On the other hand, the other two levels of political

                                                                                                 21
connection, ministers and members of parliament remain statistically insignificant to firm value

for all the regressions run. This leads us to conclude that there is insufficient evidence to show

that political connection is a strong variable to explain the variation of firm value in general.

       Summing up our result, model 4, with the full set of control variables, constantly has the

highest adjusted R-square value. The strongest explanatory power shows that as independent

variables are added to the model, each of them will explain some of the variance in the

dependent variable. In addition, we also observe that model 2 constantly shows decent adjusted

R-square that is higher than model 3 although the latter consists of more control variables. This

suggests that firm specific differences are essential control variables in order to reliably predict

firm value.

       Our results support hypothesis 1a. Robustness checks show that alternative political

connection variables give rise to similar results and the addition of control variables do not

drastically change the coefficients. In contrary to our literature reviews, we show that political

connection in Singapore relates neither positively nor negatively to political connection

significantly. In the literature, it is postulated that political connection can transfer wealth from

the government and channel resources to their firms in several avenues. Not only can political

connection influence the allocation of capital through the mechanism of financial assistance

economic distress (Faccio, Masulis and McConnell, 2006) or the awarding of government

contracts (Imai, 2006; Donatella and Vannucci, 1997), it can also successfully coerce banks to

grant unprofitable loans to their firms (Khwaja and Mian, 2004; Friedman, 1999).

       However, in Singapore, due to the government’s efforts to iron out public sector

corruption, directors may not be able to exploit their connections to bring economic benefits to

their firms, or abuse their power in the firm for their own economic, social or political interests.




                                                                                                    22
Offences and sanctions on corruption27 are set out in the Prevention of Corruption Act (Chapter

24).28 As such, with such stringent regulations in place to uphold the integrity of the business

environment, it is relatively difficult for firms with politically connections to be highly valued as

a consequence of preferential treatment bestowed onto them.

        As an auxiliary test, we assay if politically connected firms have a higher tendency to be

awarded government contracts. Despite a sample size of 152, as shown in Appendix 2, 96.7% of

the contracts are awarded to privately held companies. As such, due to informational limitation29

we can only conduct our analysis on six companies. Arriving at a rough estimate from our

sample30 that 16.7% of the publicly listed companies are politically connected, this bolsters our

previous analysis that political connection does not result in any economic benefits for the firms,

specifically to the tendency of being awarded government contracts.

        Moreover, from Appendix 3, it can be seen that 81.5% of the directors who are politically

connected act as (independent) non-executive directors in the board.                      As the role of non-

executive directors is to focus on board matters by providing objective criticism in the

formulation of strategies and plans devised by the executive team, they are usually appointed to

bring impartiality and wide experience to the board.31 They can give a wider and clearer view of

the external factors enveloping the company and its business environment than the executive

directors.    This is consistent with our explanation that politically connected directors in

Singapore may be appointed based on their vast experience and knowledge, rather than to bring

economic benefits to the firm.


27
   Punishment on corruption includes a fine not exceeding S$100,000 or imprisonment for a term not exceeding 7
years or both.
28
   “Prevention of Corruption Act” www.statutes.agc.gov.sg
29
   Privately held companies do not necessarily disclose their Board of Directors.
30
   Due to informational limitation, we can only conduct our analysis on six companies. Although we recognise that
the results we obtain can be a relatively misleading and inaccurate portrayal of the actual picture, the analysis is
continued to get a rough estimate.
31
   “The Independent Director Initiative” Ernst and Young 2005
                                                                                                                23
       Finally, we test the relationship between political connection, corporate governance and

firm value. First, we run regression on non-duality as a proxy for corporate governance, with

political connection variables as independent variables. The results presented in Table 8 show

that non-duality, with coefficient 0.14 and adjusted R-square of 1.1%, is positively but

statistically insignificantly related to political connection. This hints that political connection

does not promote higher standards of corporate governance in the company.

       Next, using non-duality and the percentage of independent directors in the Board as

proxies for corporate governance, these two variables are introduced into regression models 3

and 4. With reference to Tables 4, 5, 6 and 7, we observe that the non-duality variable is

positively but insignificantly related to Tobin’s Q.      The independent directors percentage

variable, however, is consistently in all regressions, positively and statistically significant to

Tobin’s Q in the third year after IPO listing. Together, our results show there is insufficient

evidence to show that corporate governance can be used to explain the variation in firm value.

Nonetheless, it does hint that effective and good corporate governance structure may potentially

contribute positively to firm value in the long run.

       Therefore, there is insufficient evidence to support hypothesis 1b. Our results show that

political connection does not lead to higher corporate governance, and corporate governance

does not lead to higher firm value in the short run in Singapore. This result can give us some

insights to the reasons why politically connected directors are still appointed despite the lack of

economic advantages they bring. In the context of Singapore where politicians are well-known

to display integrity and honesty, management may believe that having a politically connected

director in Board can signal to investors that they have high standards of corporate governance,

thereby boosting investors’ confidence in them. Additionally, the statistically significant and




                                                                                                24
positive coefficient of corporate governance in the third year after IPO listing hints that having

strong corporate governance may contribute to firm value in the long run.



VI     SUMMARY AND CONCLUSIONS

       Political connection is a double-edged sword. On one hand, it can jeopardize firm value

if exploiting such connections distort incentives, misallocate investment and increase the extent

of corruption (Shleifer and Vishny, 1994). On the other hand, politically connected companies

may benefit through easier access to debt financing, lower tax and stronger market power

(Faccio, 2003).

       In this paper, we study the effects of political connection on the valuation of the company

by examining the Tobin’s Q of newly listed companies from 1997 - 2002. We find that firm

value, within three years since the issue of IPO, is independent to political connection, after

controlling for several differences such as profitability, company’s size, leverage, varying time

differences, industry characteristics and lastly, whether the company is a subsidiary of Temasek.

Robustness checks performed show that a number of alternative political connection variables,

such as political connection dummy variable, political connection percentage variable, current

and former political connection variables, as well as the levels of political connection variables,

produce similar results. In an environment where corruption is low, it is unlikely for a politically

connected director to channel resources towards their favored firms to realize economic benefits

for the company.     Moreover, we believe that politically connected directors, with a huge

proportion of them acting as non-executive (independent) directors in the board, are valued based

on their vast knowledge and experience of government procedures and their insights in

predicting government action (Agrawal and Knoeber, 2001), providing objective, multi-




                                                                                                 25
dimensional perspective criticism to the executive directors in the formulation of strategies and

planning.

         We also find that political connection does not lead to higher corporate governance, and

corporate governance does not lead to higher firm value in the short run. This result can give us

some insights to the reasons why politically connected directors are still appointed

notwithstanding the lack of economic advantages they bring. In the context of Singapore where

politicians are well-known to display integrity and honesty, management may believe that having

a politically connected director in Board can signal to investors that they are subjected to

appropriate and adequate monitoring mechanisms, thereby boosting investors’ confidence in

them.

         In this paper, both the issues discussed pave the direction for future research to be done,

with regards to firm value and corporate governance in relation to political connection. Our

results hint that longer span of study may be useful in examining the impact of political

connection and corporate governance, whose benefits may not fully materialize in just three

years.

         In conclusion, we find that in Singapore where corruption is low, political connection

hardly has a significant impact on the value of newly-listed firms from 1997 - 2002.

Government officials found using their powers to affect economic value of public corporations

for private agendas without public merit risk serious legal and political sanctions, justifying the

reason to the lack of economic advantages, such as a lower tax rate, easier access to credit or a

higher tendency to be awarded government contracts, typically associated with political

connections in countries with weak institutional environments and high level of corruption. Our

research suggests that despite the lack of economic value political connection brings to the firms,

it is undeniable that politically connected directors can still contribute meaningfully and be

                                                                                                 26
valuable to firms with their wide span of relevant experience and rich knowledge. Lastly, since

our research hints that strong corporate governance may contribute to higher firm value in the

long run, firms may be better off investing in political connection as a form of signal to investors

of their management quality.




                                                                                                 27
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                                                                                            29
TABLES AND APPENDICES

Table 1: Descriptive Statistics of Newly Listed Companies in Singapore between 1997 and 2002

This table presents the descriptive statistics of companies which were newly listed in Singapore between 1997 and 2002.
Panel A categories the sample by the year in which the IPO was issued. Panel B reports the sample by industry sector. Panel
C reports the politically connected directors by whether they are current or former political appointees. Panel D reports the
politically connected directors by their levels.


                                                         The sample IPO firms               Politically connected companies



                                                                As a percentage of                         As a percentage
Panel A: By year                                     Number      total IPO firms       Number               of the sample
  1997                                                 5             15.63%               2                    40.00%
  1998                                                 8             42.11%               3                    37.50%
  1999                                                 26            54.17%              11                    42.31%
  2000                                                 59            80.82%              22                    37.29%
  2001                                                 28            87.88%               6                    20.69%
  2002                                                 24            85.71%               9                    37.50%

                                                                                                           As a percentage
Panel B: By sector                                              Number                 Number               of the sample
  Hotels/restaurants, properties, and construction                 25                     10                   40.00%
   Manufacturing                                                   67                     18                   26.47%
   Services, utilities, multi-industry, and
                                                                   58                     25                   43.10%
transportation
Total                                                             150                     53                   35.10%
Mean of politically connected firms                               0.35
Standard Deviation                                                0.48

                                                                           Politically Connected Directors
                                                                                                  As a percentage of
Panel C: By Current/ Former Political Appointees                Number                      politically connected directors
 Current Political Appointees                                     29                                     43.9%
 Former Political Appointees                                      37                                     56.1%

                                                                                                   As a percentage of
Panel D: By Levels of Political Connection                      Number                       politically connected directors
 Minister                                                          6                                       9.1%
 MP                                                               49                                      74.2%
 Military/ Ambassador                                             11                                      16.7%
Total                                                             66




                                                                                                                                30
Table 2: Pearson Correlation Matrix of Independent and Dependent Variables

This table reports the Pearson correlation coefficients between pairs of the variables used in the regression studies. PC dummy refers to political connection dummy variable, which takes on the value of
one when at least one of the directors in the Board is politically connected, and zero otherwise. PC% is the political connection percentage variable which expresses the number of political connected
directors as a percentage of the number of directors in the Board. Current and Former are dummy variables which take on the value of one when at least one of the directors is a current or former
political appointee respectively, and zero otherwise. Minister, MP and Military are dummy variables which take on the value of one when at last one of the directors is a minister of the Singapore
Cabinet, a member of the parliament, a military leader or ambassador of Singapore respectively, and zero otherwise. NonDual is another dummy variable used if the company has separate person
appointed for the chairman and CEO position. ID% represents the percentage of independent directors in the Board of Directors. GLC is also a dummy variable which represents a Temasek
subsidiary. Dummy variables equal to one if it is the relevant year of IPO listing. Mfg and svc are dummy variables which takes on the value of one when the firm belongs to that industry, and
zero otherwise. LnTA is the natural logarithm of total assets, leverage is the debt-equity ratio, and ROE is return on equity, all measured at the first year after IPO listing. Asterisks denote levels
of significance: ***1%, **5% and *10%.
                           PCdummy




                                                                                                                                                                                                                                                          Leverage1
                                                                                                               NonDual
                                                                          Minister




                                                                                                 Military
                                                 Current



                                                              Former




                                                                                                                                                                                                                                          LnTA1
                                                                                                                                                  IPO98


                                                                                                                                                            IPO99



                                                                                                                                                                           IPO00



                                                                                                                                                                                          IPO01



                                                                                                                                                                                                         IPO02




                                                                                                                                                                                                                                                                             ROE1
                                        PC%




                                                                                                                                          GLC
                                                                                                                                 ID%
              TQ1




                                                                                                                                                                                                                    Mfg



                                                                                                                                                                                                                                 Svc
                                                                                        MP
TQ1         1.00    0.04             0.03     -0.05        0.11        0.03          0.05     .164*         0.13         0.06          0.01     0.15      -0.06     -.173*         -0.02          .161*          -0.15    .198*        -.195*     -0.05               -.380**
PCdummy             1.00             .886**   .718**       .590**      .276**        .872**   .342**        0.13         -.160*        0.10     0.01      0.07      0.03           -0.14          0.02           -0.16    0.13         0.05       0.16                0.07
PC%                                  1.00     .662**       .619**      .357**        .797**   .383**        0.10         -.186*        0.07     0.03      0.07      0.02           -0.10          -0.03          -0.16    0.08         0.02       0.14                0.07
Current                                       1.00         -0.06       0.06          .683**   .205*         0.10         -0.12         0.11     0.02      0.01      0.03           -0.01          -0.06          -0.02    -0.06        0.02       0.05                0.02
Former                                                     1.00        .375**        .438**   .273**        0.10         -0.12         0.08     -0.02     0.09      0.02           -.162*         0.06           -.209*   .214**       0.08       .166*               0.08
Minister                                                               1.00          0.09     -0.05         0.06         -0.01         -0.05    -0.05     -0.09     -0.03          -0.01          0.10           -0.12    0.05         0.00       0.03                -0.01
MP                                                                                   1.00     0.02          0.04         -0.12         0.00     0.04      0.13      -0.04          -0.12          0.00           -0.14    0.09         -0.02      0.14                0.04
Military                                                                                      1.00          .190*        -.182*        .210**   -0.06     -0.04     0.14           -0.05          -0.03          -0.06    0.09         0.11       0.02                0.05
NonDual                                                                                                     1.00         -0.06         .215**   -0.13     0.02      -0.04          -0.05          0.13           -0.12    0.06         .180*      0.00                -0.08
ID%                                                                                                                      1.00          -.197*   -0.04     -0.15     -0.03          0.08           .223**         0.06     -0.07        -.182*     0.05                -.196*
GLC                                                                                                                                    1.00     -0.05     0.07      0.15           -0.11          -0.10          -0.07    0.08         .494**     0.01                0.05
IPO98                                                                                                                                           1.00      -0.11     -.191*         -0.11          -0.10          0.09     -.188*       -0.01      -0.06               0.05
IPO99                                                                                                                                                     1.00      -.369**        -.219**        -.200*         -0.06    0.00         .186*      -0.02               0.11
IPO00                                                                                                                                                               1.00           -.386**        -.351**        -.174*   .201*        0.02       0.02                -0.06
IPO01                                                                                                                                                                              1.00           -.209*         .258**   -.205*       -0.07      -0.12               -0.11
IPO02                                                                                                                                                                                             1.00           -0.03    0.06         -0.14      0.15                0.04
Mfg                                                                                                                                                                                                              1.00     -.713**      0.05       -0.14               0.13
Svc                                                                                                                                                                                                                       1.00         -0.12      0.07                -0.14
LnTA1                                                                                                                                                                                                                                  1.00       0.06                .248**
Leverage1                                                                                                                                                                                                                                         1.00                .163*
ROE1                                                                                                                                                                                                                                                                  1.00




                                                                                                                                                                                                                                                          31
Table 3: Univariate Analysis between Politically Connected Firms and Non-Politically Connected Firms

This table presents the results of mean comparison test of the Tobin’s Q value for each of the three years after
IPO listing. Each result compares firms that are politically connected and those that are not. No statistical
significance has been found.

                                                           Mean
                                Politically         Non-Politically          Mean                     Sig. (2-
             Total sample                                                                  t-stats
                                Connected            Connected             Difference                 tailed)
TQ1          0.974          1.037                0.940                   0.098             0.540     0.590

TQ2          0.980          1.097                0.916                   0.181             0.727     0.468

TQ3          0.998          0.958                1.020                   -0.062            -0.229    0.819




                                                                                                                   32
Table 4: Regression Results of Political Connection Dummy Variable on Post-IPO Tobin’s Q

The dependent variable is Tobin’s Q, measured for each of the three years after the listing of IPO. The independent variables, in the order of listing, are as follows: Polcn refers to political connection
dummy variable, which takes on the value of one when at least one of the directors in the Board is politically connected, and zero otherwise. LnTA is the natural logarithm of total assets, leverage is the
debt-equity ratio, and ROE is return on equity, all measured at their respective years. Mfg and svc are dummy variables which takes on the value of one when the firm belongs to that industry, and zero
otherwise. GLC is also a dummy variable which represents a Temasek subsidiary. Non-duality is another dummy variable used if the company has separate person appointed for the chairman and CEO
position. ID% represents the percentage of independent directors in the Board of Directors. Lastly, dummy variables equal to one if it is the relevant year of IPO listing. The regressions apply the
ordinary least squares method. Four models are utilized, each introducing a partial set of control variables. Asterisks denote levels of significance: ***1%, **5% and *10%.

                                                            Model 1                                                                                        Model 2
                               TQ1                            TQ2                           TQ3                              TQ1                             TQ2                              TQ3
                      Coefficient t                   Coefficient t                Coefficient t                   Coefficient t                   Coefficient t                    Coefficient t
Constant                   0.940 8.734***                  0.916 6.2***                 1.020 6.346***                  1.856 2.308**                   2.148 2.177**                    2.654 2.509**
Polcn                      0.098     0.54                  0.181    0.727              -0.062    -0.229                 0.131      0.764                0.163       0.737                0.111      0.440
LnTA                                                                                                                   -0.086     -1.239               -0.115      -1.372               -0.158 -1.715*
Leverage                                                                                                                0.000     -0.115               -0.003      -1.350               -0.003     -0.832
ROE                                                                                                                    -0.007 -4.235***                -0.011 -5.741***                 -0.007 -4.824***
Mfg                                                                                                                     0.006      0.025                0.055       0.175                0.114      0.317
Svc                                                                                                                     0.286      1.208                0.317       0.977                0.232      0.638
GLC
NonDual
ID%
IPO98
IPO99
IPO00
IPO01
IPO02

N                             150                            150                           150                            150                             150                              150
Adjusted R-square          -0.005                         -0.003                        -0.006                          0.143                           0.238                            0.173
F ratio                     0.292                          0.529                         0.052                     5.134***                        8.747***                         6.201***




                                                                                                                                                                                                         33
Table 4: Regression Results of Political Connection Dummy Variable on Post-IPO Tobin’s Q (continued)

                                                      Model 3                                                                          Model 4
                             TQ1                       TQ2                         TQ3                           TQ1                     TQ2                      TQ3
                    Coefficient t              Coefficient t              Coefficient t                Coefficient t           Coefficient t            Coefficient t
Constant                 2.231 2.317**              2.433 2.073**              2.610 2.158**                2.776 2.763***          4.114 3.221***           2.005      1.459
Polcn                    0.094     0.539            0.176     0.780            0.124     0.492              0.074      0.443        0.203       0.928        0.181      0.722
LnTA                    -0.132    -1.623           -0.174 -1.712*             -0.230 -2.197**              -0.118     -1.507       -0.172 -1.698*           -0.195 -1.833*
Leverage                 0.000    -0.067           -0.003 -1.334              -0.002    -0.642              0.000     -0.149       -0.003      -1.444       -0.002     -0.528
ROE                     -0.006 -3.894***           -0.010 -5.178***           -0.007 -4.588***             -0.007 -4.352***        -0.010 -5.305***         -0.007 -4.517***
Mfg                      0.028     0.121            0.059     0.186            0.187     0.525              0.055      0.244       -0.004      -0.012        0.072      0.200
Svc                      0.273     1.143            0.294     0.895            0.247     0.680              0.411 1.765*            0.360       1.098        0.279      0.757
GLC                      0.290     0.642            0.552     0.903            0.630     0.963              0.497      1.147        0.826       1.376        0.570      0.859
NonDual                  0.229     1.362            0.125     0.574            0.400     1.648              0.199      1.216        0.092       0.429        0.398      1.619
ID%                      0.015     0.034            0.623     1.117            1.229 1.980**                0.059      0.137        0.881       1.546        1.139 1.758*
IPO98                                                                                                       0.200      0.370       -1.548 -2.153**           0.126      0.155
IPO99                                                                                                      -0.764 -1.662*          -1.990 -3.270***         -0.072     -0.104
IPO00                                                                                                      -1.069 -2.415**         -2.068 -3.532***          0.244      0.365
IPO01                                                                                                      -0.798 -1.718*          -1.516 -2.471**           0.873      1.245
IPO02                                                                                                      -0.425     -0.897       -1.811 -2.885***          0.059      0.082

N                          150                        150                        150                          150                     150                      150
Adjusted R-square         0.14                      0.233                      0.198                        0.225                   0.285                    0.209
F ratio             3.691***                   6.035***                   5.093***                     4.086***                5.238***                 3.808***




                                                                                                                                                                       34
Table 5: Regression Results of Political Connection Percentage Variable on Post-IPO Tobin’s Q

The dependent variable is Tobin’s Q, measured for each of the three years after the listing of IPO. The independent variables, in the order of listing, are as follows: Polcn refers to political connection
percentage variable, which expresses the directors who are politically connected as a percentage of the Board of Directors. LnTA is the natural logarithm of total assets, leverage is the
debt-equity ratio, and ROE is return on equity, all measured at their respective years. Mfg and svc are dummy variables which takes on the value of one when the firm belongs to that industry, and zero
otherwise. GLC is also a dummy variable which represents a Temasek subsidiary. Non-duality is another dummy variable used if the company has separate person appointed for the chairman and CEO
position. ID% represents the percentage of independent directors in the Board of Directors. Lastly, dummy variables equal to one if it is the relevant year of IPO listing. The regressions apply the
ordinary least squares method. Four models are utilized, each introducing a partial set of control variables. Asterisks denote levels of significance: ***1%, **5% and *10%.


                                                              Model 1                                                                                          Mode l 2
                                TQ1                            TQ2                             TQ3                              TQ1                              TQ2                               TQ3
                      Coefficient     t               Coefficient    t               Coefficient     t               Coefficient    t                 Coefficient     t                 Coefficient    t
Constant                    0.951     9.19***               0.943    6.63***               1.033     6.691***              1.837    2.276**                 2.115     2.130**                 2.647    2.484**
Polcn                       0.350         0.411             0.559        0.479            -0.528         -0.416            0.504         0.627              0.443          0.429              0.223            0.189
LnTA                                                                                                                      -0.084        -1.208              -0.110        -1.310             -0.155    -1.685*
Leverage                                                                                                                   0.000        -0.090              -0.003        -1.379             -0.003         -0.834
ROE                                                                                                                       -0.007    -4.223***               -0.011    -5.743***              -0.007    -4.782***
Mfg                                                                                                                        0.010         0.045              0.051          0.159              0.109            0.301
Svc                                                                                                                        0.298         1.259              0.328          1.007              0.241            0.662
GLC
NonDual
ID%
IPO98
IPO99
IPO00
IPO01
IPO02


N                             150                            150                             150                             150                              150                               150
Adjusted R-square           -0.006                         -0.005                         -0.006                           0.142                            0.236                             0.172
F ratio                     0.169                           0.229                          0.173                     5.095***                         8.665***                          6.167***




                                                                                                                                                                                                           35
Table 5: Regression Results of Political Connection Percentage Variable on Post-IPO Tobin’s Q (continued)


                                                       Model 3                                                                                 Model 4
                             TQ1                         TQ2                           TQ3                             TQ1                        TQ2                        TQ3
                    Coefficient    t            Coefficient    t            Coefficient      t              Coefficient   t            Coefficient   t            Coefficient   t
Constant                 2.220     2.291**            2.398    2.021**            2.592      2.119**             2.760    2.732***          4.071    3.154***          1.978         1.425
Polcn                    0.371         0.452         0.526         0.498          0.384          0.326           0.313        0.400         0.566        0.553         0.549         0.467
LnTA                     -0.131        -1.609        -0.168    -1.656*           -0.227      -2.163**            -0.117       -1.492        -0.165       -1.627        -0.191   -1.788*
Leverage                 0.000         -0.051        -0.003        -1.369        -0.002          -0.657          0.000        -0.142        -0.003       -1.492        -0.002        -0.553
ROE                      -0.006    -3.885***         -0.010    -5.185***         -0.007      -4.565***           -0.007   -4.348***         -0.010   -5.319***         -0.007   -4.487***
Mfg                      0.032         0.138         0.057         0.178         0.186           0.520           0.060        0.263         -0.007       -0.021        0.071         0.198
Svc                      0.282         1.178         0.306         0.928          0.256          0.706           0.418    1.794*            0.372        1.128         0.292         0.791
GLC                      0.294         0.650         0.547         0.893         0.630           0.962           0.499        1.152         0.818        1.360         0.570         0.857
NonDual                  0.233         1.390          0.134        0.617          0.406      1.676*              0.201        1.234         0.103        0.477         0.407    1.656*
ID%                      0.018         0.040         0.610         1.086         1.222       1.960*              0.062        0.143         0.857        1.497         1.124         1.730
IPO98                                                                                                            0.204        0.376         -1.538   -2.135**          0.137         0.167
IPO99                                                                                                            -0.762   -1.657*           -1.985   -3.256***         -0.067        -0.096
IPO00                                                                                                            -1.067   -2.409**          -2.062   -3.513***         0.251         0.374
IPO01                                                                                                            -0.799   -1.720*           -1.523   -2.478**          0.868         1.236
IPO02                                                                                                            -0.420       -0.886        -1.794   -2.853***         0.070         0.098


N                          150                         150                         150                             150                        150                        150
Adjusted R-square        0.139                        0.231                       0.197                          0.225                      0.282                      0.207
F ratio             3.679***                    5.979***                    5.073***                        4.082***                   5.177***                   3.778***




                                                                                                                                                                                    36
Table 6: Regression of Current and Former Political Connection Variables on Post-IPO Tobin’s Q

The dependent variable is Tobin’s Q, measured for each of the three years after the listing of IPO. The independent variables, in the order of listing, are as follows: CurrentP and FormerP are dummy
variables which takes on the value of one when at least one the directors are currently and formerly politically connected respectively. LnTA is the natural logarithm of total assets, leverage is the
debt-equity ratio, and ROE is return on equity, all measured at their respective years. Mfg and svc are dummy variables which takes on the value of one when the firm belongs to that industry, and zero
otherwise. GLC is also a dummy variable which represents a Temasek subsidiary. Non-duality is another dummy variable used if the company has separate person appointed for the chairman and CEO
position. ID% represents the percentage of independent directors in the Board of Directors. Lastly, dummy variables equal to one if it is the relevant year of IPO listing. The regressions apply the
ordinary least squares method. Four models are utilized, each introducing a partial set of control variables. Asterisks denote levels of significance: ***1%, **5% and *10%.


                                                            Model 1                                                                                       Model 2
                               TQ1                            TQ2                            TQ3                             TQ1                             TQ2                            TQ3
                     Coefficient     t               Coefficient    t               Coefficient    t              Coefficient   t                 Coefficient   t                Coefficient    t
Constant                   0.950     8.987***             0.929     6.371***             1.025     6.46***             1.952    2.430**                2.133    2.155**                2.714    2.547**
CurrentP                  -0.111         -0.532           0.272         0.946           -0.194         -0.618         -0.070        -0.364             0.224         0.883             0.000         0.000
FormerP                    0.304          1.29           -0.056         -0.172           0.100         0.283           0.356         1.563            -0.025        -0.084             0.263         0.788
LnTA                                                                                                                  -0.092        -1.332            -0.113        -1.349            -0.163    -1.760*
Leverage                                                                                                               0.000        -0.204            -0.003        -1.384            -0.003        -0.827
ROE                                                                                                                   -0.007    -4.318***             -0.011    -5.609***             -0.007    -4.818***
Mfg                                                                                                                    0.008         0.034             0.051         0.161             0.121         0.336
Svc                                                                                                                    0.241         1.011             0.352         1.072             0.207         0.562
GLC
NonDual
ID%
IPO98
IPO99
IPO00
IPO01
IPO02


N                            150                            150                            150                           150                             150                             150
Adjusted R-square          0.000                         -0.007                         -0.010                         0.149                           0.234                            0.17
F ratio                    1.014                          0.473                          0.242                    4.728***                        7.495***                       5.355***




                                                                                                                                                                                                     37
Table 6: Regression of Current and Former Political Connection Variables on Post-IPO Tobin’s Q (continued)


                                                        Model 3                                                                              Model 4
                               TQ1                         TQ2                         TQ3                           TQ1                        TQ2                        TQ3
                    Coefficient      t            Coefficient    t            Coefficient    t            Coefficient   t            Coefficient   t            Coefficient   t
Constant                 2.380       2.465**           2.388     2.023**           2.699     2.205**           2.884    2.867***          4.076    3.177***          2.114         1.530
Current                  -0.117          -0.589        0.228         0.883         -0.014        -0.049        -0.090       -0.475        0.256        1.024         -0.023        -0.081
Former                   0.327           1.423         -0.012        -0.042        0.298         0.901         0.291        1.324         0.018        0.063         0.392         1.189
LnTA                    -0.143       -1.752**         -0.169     -1.663*           -0.238    -2.253**          -0.127       -1.616        -0.168       -1.648        -0.204   -1.910*
Leverage                 0.000           -0.152        -0.003        -1.374        -0.002        -0.630        0.000        -0.231        -0.003       -1.492        -0.002        -0.511
ROE                      -0.006      -3.976***         -0.010    -5.070***         -0.007    -4.574***         -0.007   -4.411***         -0.010   -5.213***         -0.007   -4.492***
Mfg                      0.027           0.118         0.055         0.173         0.194         0.545         0.054        0.241         -0.003       -0.008        0.077         0.216
Svc                      0.221           0.916         0.330         0.993         0.215         0.586         0.367        1.561         0.397        1.197         0.240         0.645
GLC                      0.334           0.739         0.518         0.842         0.656         0.995         0.529        1.220         0.789        1.309         0.602         0.902
NonDual                  0.229           1.373         0.130         0.596         0.401         1.648         0.200        1.226         0.095        0.443         0.402         1.635
ID%                      0.009           0.020         0.618         1.102         1.242     1.996**           0.063        0.145         0.878        1.532         1.151    1.774*
IPO98                                                                                                          0.203        0.375         -1.552   -2.151**          0.135         0.165
IPO99                                                                                                          -0.770   -1.680*           -1.995   -3.268***         -0.079        -0.114
IPO00                                                                                                          -1.060   -2.401**          -2.083   -3.543***         0.251         0.375
IPO01                                                                                                          -0.780   -1.683*           -1.546   -2.511**          0.890         1.268
IPO02                                                                                                          -0.435       -0.919        -1.808   -2.871***         0.048         0.067


N                          150                           150                         150                         150                        150                        150
Adjusted R-square        0.147                         0.229                       0.196                         0.23                     0.281                      0.208
F ratio             3.547***                      5.418***                    4.629***                    3.965***                   4.873***                   3.613***




                                                                                                                                                                                  38
Table 7: Regression Results of Levels of Political Connection Variables on Post-IPO Tobin’s Q

The dependent variable is Tobin’s Q, measured for each of the three years after the listing of IPO. The independent variables, in the order of listing, are as follows: Ministers, MP and Military are dummy
variables which takes on the value of one when at least one the directors are ministers of the Singapore Cabinet, members of parliament and leaders of military or ambassadors of Singapore respectively.
LnTA is the natural logarithm of total assets, leverage is the debt-equity ratio, and ROE is return on equity, all measured at their respective years. Mfg and svc are dummy variables which takes on the value
of one when the firm belongs to that industry, and zero otherwise. GLC is also a dummy variable which represents a Temasek subsidiary. Non-duality is another dummy variable used if the company has
separate person appointed for the chairman and CEO position. ID% represents the percentage of independent directors in the Board of Directors. Lastly, dummy variables equal to one if it is the relevant year
of IPO listing. The regressions apply the ordinary least squares method. Four models are utilized, each introducing a partial set of control variables. Asterisks denote levels of significance: ***1%, **5%
and *10%.


                                                                 Model 1                                                                                          Model 2
                                   TQ1                             TQ2                            TQ3                             TQ1                              TQ2                              TQ3
                         Coefficient     t               Coefficient     t              Coefficient     t               Coefficient     t               Coefficient      t               Coefficient      t
Constant                       0.893     8.507***              0.895     6.127***             1.052     6.733***              1.988     2.482**               2.115      2.123**               2.790      2.650***
Minister                       0.210         0.477             0.107         0.174            0.117         0.179             0.172         0.423             0.063          0.118             0.227          0.377
MP                             0.096         0.508             0.220         0.833           -0.409         -1.45             0.105         0.595             0.151          0.649            -0.266          -1.027
Military                       0.734     2.026**               0.269         0.534            1.014     1.881*                0.821     2.441**               0.379          0.857             1.115      2.271**
LnTA                                                                                                                         -0.100         -1.459           -0.113          -1.346           -0.161      -1.768*
Leverage                                                                                                                      0.000         -0.108           -0.003          -1.317           -0.004          -0.946
ROE                                                                                                                          -0.007     -4.361***            -0.011      -5.739***            -0.007      -4.816***
Mfg                                                                                                                           0.008         0.035             0.060          0.189             0.058          0.163
Svc                                                                                                                           0.251         1.071             0.312          0.953             0.174          0.484
GLC
NonDual
ID%
IPO98
IPO99
IPO00
IPO01
IPO02


N                                150                             150                            150                             150                             150                             150
Adjusted R-square              0.011                          -0.013                          0.017                           0.165                           0.231                            0.196
F ratio                        1.534                           0.352                          1.833                     4.69***                         6.58***                          5.527***




                                                                                                                                                                                                       39
Table 7: Regression Results of Levels of Political Connection Variables on Post-IPO Tobin’s Q (continued)


                                                        Model 3                                                                                Model 4
                             TQ1                         TQ2                           TQ3                             TQ1                        TQ2                        TQ3
                    Coefficient    t             Coefficient   t            Coefficient      t              Coefficient   t            Coefficient   t            Coefficient   t
Constant                  2.124    2.220**            2.318    1.946*             2.466      2.048**             2.761    2.789***          4.041    3.128***          2.007        1.458
Minister                  0.155        0.378          0.059        0.109          0.169          0.285           0.043        0.109        -0.235        -0.440        0.134        0.221
MP                        0.107        0.593          0.189        0.805         -0.206          -0.799          0.053        0.313         0.198        0.866        -0.139        -0.536
Military                  0.750    2.137**            0.341        0.731          1.112      2.199**             0.921    2.766***          0.491        1.082         1.092    2.149**
LnTA                     -0.128        -1.587         -0.167   -1.621            -0.210      -2.020**           -0.116        -1.500       -0.161        -1.580       -0.183    -1.732*
Leverage                  0.000        -0.124         -0.003   -1.296            -0.003          -0.702          0.000        -0.195       -0.003        -1.383       -0.002        -0.588
ROE                      -0.006    -4.001***          -0.010   -5.158***         -0.007      -4.568***          -0.007    -4.551***        -0.010    -5.332***        -0.007    -4.496***
Mfg                       0.027        0.116          0.066        0.206          0.130          0.369           0.043        0.192        -0.018        -0.057        0.026        0.072
Svc                       0.252        1.059          0.297        0.898          0.215          0.599           0.387    1.691*            0.355        1.078         0.262        0.716
GLC                       0.185        0.410          0.510        0.814          0.390          0.594           0.370        0.866         0.745        1.221         0.381        0.575
NonDual                   0.176        1.051          0.109        0.493          0.329          1.357           0.133        0.824         0.069        0.318         0.334        1.360
ID%                       0.141        0.324          0.671        1.190          1.320      2.134**             0.221        0.520         0.939        1.634         1.262    1.950*
IPO98                                                                                                            0.154        0.287        -1.605    -2.205**          0.109        0.133
IPO99                                                                                                           -0.805    -1.759*          -2.061    -3.330***        -0.092        -0.132
IPO00                                                                                                           -1.176    -2.671***        -2.142    -3.598***         0.122        0.181
IPO01                                                                                                           -0.875    -1.903*          -1.575    -2.536**          0.768        1.094
IPO02                                                                                                           -0.493        -1.054       -1.852    -2.928***        -0.022        -0.030


N                           150                         150                        150                             150                        150                        150
Adjusted R-square         0.156                       0.225                       0.216                          0.255                      0.281                      0.222
F ratio             3.506***                     4.943***                   4.739***                        4.195***                   4.639***                   3.661***




                                                                                                                                                                                    40
Table 8: Regression Results of Political Connection Variables on Non-Duality

The dependent variable is non-duality, which is a dummy variable which takes on the value of one when the firm
has separate person for the position of CEO and chairman. The regression model on the right uses political
connection dummy variable as independent variable, while the regression model on the right uses the political
connection percentage variable. Asterisks denote levels of statistical significance: ***1%, **5% and *10%.

                                              P/C = Yes/No                                  P/C = %
                                       Coefficient           t                    Coefficient             t
Constant                                        0.464      9.163***                        0.481        9.836***
Polcn                                            0.14          1.642                       0.489            1.219

N                                                 150                                        150
Adjusted R-square                               0.011                                      0.003
F ratio                                         2.696                                      1.486




                                                                                                                 41
Appendix 1: The Variables

Variables                        Symbol     Description
Dependent
Tobin’s Q                        TQ         This is a measure of firm’s value.
                                                 MV (CS ) + BV ( PS ) + BV (CL ) + BV ( LTD ) − BV (CA)
                                            Q=
                                                                        BV (TA)
Independent
Political Connection             Polcn      Dummy variable which takes on the value of one when
                                            at least one of the directors in the board is politically
                                            connected, and zero otherwise
Percentage of Political          Polcn%     The percentage of directors in the board who are
Connection                                  politically connected
Current Politicians              CrtP       Dummy variable which takes on the value of one when
                                            the director is currently politically connected, and zero
                                            otherwise
Former Politicians               FrmP       Dummy variable which takes on the value of one when
                                            the director is formerly politically connected, and zero
                                            otherwise
Minister of Singapore Cabinet    Minister   Dummy variable which takes on the value of one when
                                            the director is a Minister of the Singapore Cabinet, and
                                            zero otherwise
Member of Parliament             MP         Dummy variable which takes on the value of one when
                                            the director is a member of the Parliament, and zero
                                            otherwise
Military Leader or Ambassadors   Mil        Dummy variable which takes on the value of one when
                                            the director is a military leader or ambassador of
                                            Singapore
Control
Firm Size                        LnTA       Natural logarithm of total assets
Leverage Ratio                   Leverage   Long term debt divided by shareholder equity
Return on Equity                 ROE        Return on equity ratio
Government Linked Company        GLC        Dummy variable which takes on the value of one when
                                            the company is a subsidiary of Temasek Holdings, and
                                            zero otherwise
Year of Listing                  IPOxx      Dummy variable which equals to one when it is the
                                            year of listing, and zero otherwise
Industry                         Mfg/Svc    Dummy variable which equals to one when the
                                            company belongs to the industry
Non-Duality                      NonDual    Dummy variable which takes on the value of one when
                                            the company has separate chairman and CEO position,
                                            and zero otherwise
Percentage of Independent        ID%        The percentage of directors in the board who are
Directors                                   independent




                                                                                                          42
Appendix 2: List of Government Contracts

Only contracts with size of above S$500,000 are included in our sample.

No Calling Entity Award              Tenders and Quotations              Total Value   Name of Supplier
                  Publication Date                                       Awarded ($)

1    Agency for     01/12/2006       Supply and Delivery of Mask         1,539,987     PHOTRONICS SINGAPORE PTE LTD
     Science,                        Fabrication Services.
     Technology and
     Research

2    Agency for     30/11/2006       Tenders for the supply, delivery,   641,630       INSTRON SINGAPORE PTE LTD
     Science,                        installation, commissioning and
     Technology and                  maintenance of 2 units of High
     Research                        Temperature Servohydraulic
                                     Dynamics Material Testing
                                     System to SIMTech
3    Agri-food and    13/12/2006     Tender for the maintence of         827,200       1.SEK LOONG TRADING &
     Veterinary                      AVA's buildings (building                         CONSTRUCTION SERVICE PTE LTD
     Authority                       works) for a period of three                      2.VISA ENGINEERING PTE LTD
                                     years (2nd and 3rd years are                      3.LIANG JIE CONSTRUCTION PTE
                                     optional)                                         LTD
4    Central          21/09/2006     Tender For The Replacement Of       1,255,000     CITY BUILDING MANAGEMENT PTE
     Provident Fund                  Chillers For CPF Buildings At                     LTD
     Board                           Tampines And Jurong
5    Central          17/11/2006     Tender for the Proposed             833,198       LEXON FURNITURE &
     Provident Fund                  Additions & Alteration Works                      CONSTRUCTION PTE LTD
     Board                           to 3rd Storey of the Existing 46-
                                     Storey Commercial Building on
                                     Lot 51K TS 30 at No. 79
                                     Robinson Road for CPF Board
6    Central          22/11/2006     Tender for the Replacement of       998,000       DATA-SPHERE (S) PTE LTD
     Provident Fund                  CCTV System at CPF
     Board                           Robinson, Tampines, Bishan,
                                     Jurong And Woodlands Offices
7    Civil Aviation   02/11/2006     Supply, delivery, testing and       3,900,000     INDECO ENGINEERS (PTE) LTD
     Authority of                    commissioning of one (1) unit
     Singapore                       of 50 passenger, 40 knots air
                                     cushion vessel (hovercraft) for
                                     Singapore Changi Airport
8    Civil Aviation   03/11/2006     Supply and installation of public   1,152,273     1.UNITED VENTURE FURNISHINGS
     Authority of                    seatings for Terminal 3                           PTE LTD
     Singapore                       Building, Singapore Changi                        2.SCHIAVELLO SINGAPORE PTE LTD
                                     Airport
9    Civil Aviation   20/10/2006     The routine and periodic            2,593,983     CHYE THIAM MAINTENANCE PTE
     Authority of                    cleaning of CAAS Buildings                        LTD
     Singapore                       and compound at Changi
                                     Airfreight Centre, Singapore
                                     Changi Airport.
10   Civil Aviation   13/10/2006     Tender for Two (2) Staff            892,080       SELECT CATERING SERVICES LTD
     Authority of                    Canteens at Terminal 1 and
     Singapore                       Cargo Agents Building "D"
                                     Singapore Changi Airport.
11   Civil Aviation   02/11/2006     Upgrading of public address         1,313,437     INFOCOM AND SECURITY SYSTEMS
     Authority of                    system in Terminal 2, Singapore                   PTE LTD
     Singapore                       Changi Airport

12   Civil Aviation   09/11/2006     Air Traffic Control Sector and      666,901       THE MITRE CORPORATION
     Authority of                    Runway Capacity Review and
     Singapore                       Simulation Consultancy
                                     Service.




                                                                                                                        43
No Calling Entity Award              Tenders and Quotations            Total Value   Name of Supplier
                  Publication Date                                     Awarded ($)

13   Defence       21/11/2006        2 year supply of office           1,177,116     1.APRES MARKETING PTE LTD
     Science and                     equipment                                       2.EOM PTE LTD
     Technology                                                                      3.QCS MARKETING & TRADING (S)
     Agency                                                                          PTE LTD
                                                                                     4.SMART WORKPLACE SYSTEM PTE
                                                                                     LTD
                                                                                     5.ADLER OFFICE MACHINES PTE.
                                                                                     LTD.
14   Economic      19/12/2006        Request for proposal for          810,000       WEBER SHANDWICK WORLDWIDE
     Development                     branding manufacturing                          (SINGAPORE) PTE LTD
     Board
15   Housing and   31/10/2006        Building Works For The Lift     25,688,000      FONDA CONSTRUCTION PTE LTD
     Development                     Upgrading Programme
     Board                           (Including Interim Upgrading
                                     Works) -Lup Bulk Contract 27
16   Housing and   29/09/2006        Project Life (Lift Improvement 3,766,000        GIANTWILL PTE. LTD.
     Development                     And Facilities Enhancement For
     Board                           The Elderly) Batch 10 -Building
                                     Works
17   Housing and   15/09/2006        Service Provision Of Alert      1,890,588       BNF ENGINEERING (S) PTE LTD
     Development                     Alarm System To Various Hdb
     Board                           Blocks -Project Of Lift
                                     Improvement And Facilities
                                     Enhancement (Life) Batch 10
18   Housing and   09/10/2006        Construction Of Trunk Sewer       827,000       OHIN CONSTRUCTION CO. PTE. LTD
     Development                     At Cantonment Road
     Board
19   Housing and   15/09/2006        Construction Of Pedestrian        979,000       VESTAR IRON WORKS PTE LTD
     Development                     Overhead Bridge Across Pasir
     Board                           Ris Dr 1 (Near Blk 643) &
                                     Erection Of Roof & Linkways
                                     To Existing Pedestrian
                                     Overhead Bridges Across Pasir
                                     Ris Dr 1
20   Housing and   13/10/2006        Car Park Improvement Works        543,000       THONG (CE) CONSTRUCTION PTE
     Development                     At Jurong East Car Park Nos. J5                 LTD
     Board                           & J9
21   Housing and   05/10/2006        (A) Car Park Improvement          758,000       THYE SIANG HOE KEE
     Development                     Works At Chai Chee Car Park                     CONTRACTOR PTE LTD
     Board                           No. CC4 And CC8; (B)
                                     Removal Of Temporary Car
                                     Park Between Blk 61 & Blk 62
                                     Chai Chee Road
22   Housing and   29/11/2006        Part A: Building Works At         45,100,000    STRAITS CONSTRUCTION
     Development                     Punggol West C5 (Total:365                      COMPANY (PTE) LTD
     Board                           Du); Part B: Improvement
                                     Works At Punggol East 15; Part
                                     C: Improvement Works At
                                     Punggol East 13 & 14; Part D:
                                     Contingency Works
23   Housing and   06/10/2006        Repair Of Sunken Drains And       855,000       SING TEC DEVELOPMENT PTE. LTD
     Development                     Repair/Reconstruction Of
     Board                           Conduit Pipes In Surface
                                     Carparks, Driveways And
                                     Service Roads Within HDB
                                     Estates
24   Housing and   30/11/2006        Building Works For The Lift       18,900,000    KAY LIM CONSTRUCTION &
     Development                     Upgrading Programme                             TRADING PTE LTD
     Board                           (Including Interim Upgrading
                                     Works) -Lup Bulk Contract 28




                                                                                                                      44
No Calling Entity Award              Tenders and Quotations         Total Value   Name of Supplier
                  Publication Date                                  Awarded ($)

25   Housing and    06/10/2006       (A) Survey & Cleaning Drains   852,000       THONG (CE) CONSTRUCTION PTE
     Development                     & Culverts -Surface Cpks,                    LTD
     Board                           Drvways & Serv Rds (East
                                     Zone); (B) Repair Sunken
                                     Drains & Culverts -Surface
                                     Cpks, Drvways & Serv Rds
                                     (East Zone)
26   Housing and    06/10/2006       (A) Survey & Cleaning Drains   890,100       CREC CONSTRUCTION
     Development                     & Culverts -Surface Cpks,                    CORPORATION (SINGAPORE
     Board                           Drvways & Serv Rds (West                     BRANCH)
                                     Zone); (B) Repair Sunken
                                     Drains & Culverts -Surface
                                     Cpks, Drvways & Serv Rds
                                     (West Zone)
27   Housing and    30/08/2006       Refurbishment Works At Amk     555,100       VIGCON CONSTRUCTION PTE LTD
     Development                     Tech II (Block 5) And Amk
     Board                           Autopoint (Block 10), Ang Mo
                                     Kio Industrial Park 2A
28   Housing and    10/10/2006       Repairs & Redecoration To      889,815       SKK (S) PTE LTD
     Development                     Mscp (Batch 24)
     Board
29   Housing and    22/11/2006       Operate And Manage Hdb Car     12,653,940    G. TECH PTE. LTD
     Development                     Parks (Batch 7)
     Board
30   Housing and    22/11/2006       Operate And Manage Hdb Car     6,287,940     G. TECH PTE. LTD.
     Development                     Parks (Batch 8)
     Board
31   Housing and    22/11/2006       Operate And Manage Hdb Car     9,233,940     G. TECH PTE. LTD.
     Development                     Parks (Batch 9)
     Board
32   Housing and    05/10/2006       Improvement Works To Hdb       3,383,000     KUAN AIK HONG CONSTRUCTION
     Development                     Flats                                        PTE LTD
     Board
33   Housing and    16/11/2006       Proposed Earthworks & Re-     1,163,000      CHUAN LIM CONSTRUCTION PTE
     Development                     Turfing At Woodlands                         LTD
     Board                           Industrial Park E Site "C"
34   Housing and    22/12/2006       Lift Upgrading Works (Lup 29) 17,800,000     Prelim Construction Pte Ltd
     Development
     Board
35   Housing and    27/11/2006       Supply, Delivery, Installation 5,120,010     WILLOWGLEN SERVICES PTE LTD
     Development                     And Maintenance Of Lift
     Board                           Monitoring Devices For
                                     Telemonitoring System (Phase
                                     9)
36   Housing and    22/12/2006       Building Works For The Lift    19,119,280    CHIU TENG CONSTRUCTION CO.
     Development                     Upgrading Programme -Lup                     PTE. LTD.
     Board                           Bulk Contract 30
37   Housing and    13/12/2006       (A) Car Park Improvement       2,050,785     CHUAN KIM CONSTRUCTION PTE
     Development                     Works At Ang Mo Kio Car Park                 LTD
     Board                           No. A38(Part), A52(Part), A78
                                     And A82; (B) Repair Term
                                     Contract No. 5 (East Zone)
38   Housing and    04/01/2007       Additions & Alterations Works 1,563,800      TANG'S ENGINEERING PTE LTD
     Development                     To Sembawang Branch Office
     Board
39   Infocommunicat 14/12/2006       For Application Software and IT 5,893,457    SINGAPORE COMPUTER SYSTEMS
     ions                            Infrastructure Maintenance and               LTD
     Development                     Support for SPRING Singapore
     Authority of
     Singapore




                                                                                                                45
No Calling Entity Award              Tenders and Quotations              Total Value   Name of Supplier
                  Publication Date                                       Awarded ($)

40   Infocommunicat 08/12/2006       For the Financial and Legal         2,030,000     KPMG CORPORATE FINANCE PTE
     ions                            Consultancy Services to advise                    LTD
     Development                     on the Proposed Next
     Authority of                    Generation National Broadband
     Singapore                       Network using the Public
                                     Private Partnership (PPP)
                                     Framework
41   Judiciary-       11/10/2006     Provision of cleaning services to   1,733,508     WEISHEN INDUSTRIAL SERVICES
     Supreme Court                   the new Supreme Court for a                       PTE LTD
                                     period of one (1) year with an
                                     option to extend another two (2)
                                     years
42   Jurong Town      22/11/2006     Repairs & Redecoration to 9-        4,265,011     NIPPON PAINT (SINGAPORE)
     Corporation                     Storey Flatted Factory at Blk 20                  COMPANY PTE LTD
                                     Woodlands Link and 4-Storey
                                     Stack-up Factories at Blk 15
                                     Woodlands Loop & at Blk 22
                                     Woodlands Link
43   Jurong Town      07/11/2006     Appointment of Insurance            749,900       JARDINE LLOYD THOMPSON PTE
     Corporation                     Broker for the Construction of                    LTD
                                     Phase 1 Jurong Rock Cavern
44   Jurong Town      24/11/2006     Repairs and Redecoration to         1,415,776     C.P.ONG CONSTRUCTION PTE LTD
     Corporation                     Flatted Factory and Food Centre
                                     at Block 164 Kallang Way
45   Jurong Town      07/12/2006     2-Year Term Contract for            976,648       IGM SERVICES PTE LTD
     Corporation                     Conservancy, Refuse Removal,
                                     Maintenance of Building and
                                     Sanitary Work and Pest Control
                                     to the JTC Summit
46   Jurong Town      26/12/2006     Public tender for temporary use     2,650,716     1.POH SENG ENTERPRISES PTE LTD
     Corporation                     of site at Dul Crescent, Jalan                    2.HO AH LAM FERROCEMENT PTE
                                     Buroh, Tuas Basin Close and                       LTD
                                     Tuas Basin Link
47   Land Transport   09/10/2006     Implementation of One-Stop          592,573       HCL SINGAPORE PTE. LTD.
     Authority                       Retrieval and Infobank
                                     Interchange Phase II (Orbit II)
48   Land Transport   18/09/2006     2-year term contract for            2,418,000     WEEWAH INTEGRATED
     Authority                       provision of footpath/street                      ENGINEERING PTE. LTD.
                                     lighting for community
                                     improvement projects
49   Land Transport   27/11/2006     Upgrade Geotechnical Database       2,092,742     NIIT TECHNOLOGIES PTE. LTD.
     Authority                       Information System

50   Land Transport   05/09/2006     Architectural QP (Supervision) 685,000            BJ ARCHITECTS INTERNATIONAL
     Authority                       Services For One North (ONH)
                                     And Harbourfront (HBF)
                                     Stations For Circle Line Stages
                                     4 & 5 Project
51   Land Transport   12/09/2006     Term Contract For Site          1,010,886         SOIL & FOUNDATION (PTE) LTD
     Authority                       Investigation Works For A
                                     Period Of Two (2) Years
52   Land Transport   06/09/2006     Database Administrative         671,688           NCS PTE. LTD.
     Authority                       Services

53   Land Transport   15/12/2006     Widening of Paya Lebar Road / 8,960,000           SAMWOH ASPHALT PREMIX PTE
     Authority                       Upper Paya Lebar Road from                        LTD
                                     Geylang Road to Kim Chuan
                                     Road
54   Land Transport   07/11/2006     Widening Of Tuas Road From 4,266,688              LEK SAN CONSTRUCTION PTE LTD
     Authority                       AYE To Pioneer Road

55   Land Transport   07/11/2006     Upgrading Of EMAS Front End 900,250               STERIA ASIA PTE LTD
     Authority                       Logical Servers (FELS)

56   Land Transport   20/11/2006     Replacement of Claddings to 14 886,393            W Y STEEL CONSTRUCTION PTE
     Authority                       ERP Gantries                                      LTD




                                                                                                                        46
No Calling Entity Award              Tenders and Quotations             Total Value   Name of Supplier
                  Publication Date                                      Awarded ($)

57   Land Transport   16/11/2006     Replacement of Claddings to 15 884,750           SWEE BEE CO PTE. LTD
     Authority                       ERP Gantries

58   Land Transport   07/12/2006     Architectural QP (Supervision) 650,000           1.PARSONS BRINCKERHOFF PTE.
     Authority                       Consultancy Services for Civil                   LTD.
                                     Contracts 823 and 828 at Old                     2.3P Architects
                                     Airport Road, Tanjong Katong,
                                     Paya Lebar and Nicoll Highway
                                     Stations
59   Land Transport   27/11/2006     Supplu and installation of light 1,295,488       ATS TRAFFIC PTE LTD
     Authority                       emitting diodes (LEDs) flashing
                                     beasons at zebra crossing
60   Land Transport   20/11/2006     Temporary Road System at         4,871,000       SAMWOH ASPHALT PREMIX PTE
     Authority                       Marina Downtown Area                             LTD

61   Land Transport   15/12/2006     Rental of Multi-Function           1,590,723     KONICA MINOLTA BUSINESS
     Authority                       Devices (MFD) with Multiple                      SOLUTIONS (S) PTE. LTD
                                     Functions of Scan / Print / Copy
                                     / Fax on 3-Year Term
62   Land Transport   24/11/2006     Engagement of armed enhanced       6,049,157     1.AETOS SECURITY MANAGEMENT
     Authority                       security services for LTA at                     PTE. LTD.
                                     various construction sites                       2.CISCO Security Pte Ltd
63   Land Transport   15/12/2006     Provision of Security Services     701,280       EVTEC MANAGEMENT SERVICES
     Authority                       for Buildings and Compound at                    PTE LTD
                                     LTA's Premises
64   Land Transport   18/12/2006     Road Improvement of Jalan          2,920,000     TONG SHING CONTRACTORS PTE
     Authority                       Loyang Besar and Pasir Ris                       LTD
                                     Close
65   Media            08/09/2006     Design and Development of the      1,297,551     FRONTLINE TECHNOLOGIES PTE
     Development                     Singapore Media Fusion                           LTD
     Authority                       Website and the Singapore
                                     Media Industry Catalog
66   Ministry of      05/01/2007     Supply and Maintenance of          7,870,561     ST ELECTRONICS (INFO-COMM
     Defence                         integrated transport                             SYSTEMS) PTE. LTD.
                                     management system (ITMS)
67   Ministry of      03/11/2006     F16 & F5                           702,940       GOODYEAR ORIENT COMPANY
     Defence                         TIRE,PNEUMATIC,AIRCRAF                           (PTE) LTD
                                     T
68   Ministry of      02/11/2006     Request for proposal for           500,000       1.ENTERPRISE PROMOTION
     Defence                         provision of consultancy                         CENTRES PTE LTD
                                     services for National Innovation                 2.SPECTRUM MANAGEMENT
                                     Certification Assistance                         CONSULTING PTE. LTD.
                                     Programme
69   Ministry of      20/12/2006     Repainting to existing buildings   6,062,980     1.ICI PAINTS (SINGAPORE) PTE LTD
     Defence                         and structures for army camps                    2.JOTUN (SINGAPORE) PTE LTD
                                     and SAF ferry terminal                           3.CKR CONTRACT SERVICE PTE LTD
                                     (Package 1A, 1B, 1C AND 1D)
70   Ministry of      21/11/2006     29 line items of spares            700,005       ZF SOUTH EAST ASIA PTE LTD
     Defence
71   Ministry of      04/12/2006     Indicator,Horizontal Situation     578,800       ST AEROSPACE SUPPLIES PTE LTD
     Defence                         for CH47D Aircraft

72   Ministry of      11/12/2006     Boot, Deicer: Overshoe Assy,       671,389       ST AEROSPACE SYSTEMS PTE LTD
     Defence                         F/Rotor Blade for F50 Aircraft

73   Ministry of      01/09/2006     For the Supply, Delivery,        2,814,159       1.AV-SCIENCE MARKETING PTE LTD
     Education                       Dismounting, Relocation,                         2.ESCO AUDIO VISUAL PTE LTD
                                     Installation, Testing, and                       3.AV Media PTE LTD
                                     Commissioning of Multimedia
                                     Projectors with an option for
                                     maintenance.
74   Ministry of      29/12/2006     Proposed development of          10,500,000      CMC CONSTRUCTION PTE. LTD.
     Education                       purposed built special education
                                     school & early intervention
                                     centre at Yishun Street 61 for
                                     Balestier Special School




                                                                                                                         47
No Calling Entity Award              Tenders and Quotations           Total Value   Name of Supplier
                  Publication Date                                    Awarded ($)

75   Ministry of      29/12/2006     Proposed development of Yio       11,998,000   GUAN HO CONSTRUCTION CO (PTE)
     Education                       Chu Kang employment                            LTD
                                     development center and purpose
                                     built special education for
                                     Jurong Gardens School at
                                     Woodlands Ring Road
76   Ministry of      28/11/2006     The provision of services for the 1,407,600    DELOITTE & TOUCHE
     Finance-                        audit of Ministries' Resource
     Accountant-                     Accoutns for FY2006/2007
     General's
     Department
77   Ministry of      27/09/2006     Tender for Consultancy           1,245,000     ACCENTURE PTE LTD
     Finance-                        Services
     Ministry
     Headquarter
78   Ministry of      05/09/2006     Tender for the Refurbishment of 1,564,586      SUNRAY WOODCRAFT
     Finance-                        Office Space at Level 6 and 10                 CONSTRUCTION PTE LTD
     Ministry                        at The Treasury
     Headquarter
79   Ministry of      17/08/2006     Term Contract for the M&E     4,886,000        KIM YEW ELECTRICAL & SANITARY
     Home Affairs -                  Systems In Woodlands                           PTE LTD
     Immigration &                   Checkpoint, Train Checkpoint,
     Checkpoints                     Old Woodlands Checkpoint and
     Authority                       State Land For A Period of
                                     Three (3) Years

80   Ministry of      18/09/2006     Supply, install, test and        1,142,410     ATT SYSTEMS (S'PORE) PTE LTD
     Home Affairs -                  commission of IIIAS at
     Immigration &                   Woodlands Checkpoint
     Checkpoints
     Authority


81   Ministry of      24/08/2006     Term contract for cleaning       4,557,600     SUN CITY MAINTENANCE PTE LTD
     Home Affairs -                  sevices at WCP, Train
     Immigration &                   Checkpoint, old checkpoint and
     Checkpoints                     State land for a period of three
     Authority                       years.


82   Ministry of      11/10/2006     Tender for the supply,           613,453       BORNEO MOTORS (SINGAPORE)
     Home Affairs-                   registration and delivery of                   PTE. LTD
     Central                         thirteen units of 2500CC
     Narcotics                       passenger cans and one unit of
     Bureau                          2700CC pickup
83   Ministry of      17/11/2006     Tender for the Integrated Drug   8,152,307     1,SINGAPORE COMPUTER SYSTEMS
     Home Affairs-                   Enforcement Administrative                     LTD
     Central                         Systems (IDEAS)                                2.NCS PTE LTD
     Narcotics
     Bureau
84   Ministry of      09/10/2006     Engagement of Services for       674,924       1.SINGAPORE ANTI-NARCOTICS
     Home Affairs-                   Rebuilding Lives and                           ASSOCIATION
     Prison                          Homecoming for a period                        2.SINGAPORE AFTER-CARE
     Department                      contract of one year with an                   ASSOCIATION
                                     option to extend for another one
                                     year
85   Ministry of      21/11/2006     Provision of medical services    82,681,368    RAFFLES MEDICAL GROUP LTD
     Home Affairs-                   for Singapore Prison Service
     Prison                          (SPS), Singapore Police Force
     Department                      (SPF), Internal Security
                                     Department (ISD) and Central
                                     Narcotics Bureau (CNB)
86   Ministry of      15/11/2006     Provision of Psychiatric         1,852,200     RAFFLES MEDICAL GROUP LTD
     Home Affairs-                   Rehabilitation services to
     Prison                          Singapore Prison Service
     Department




                                                                                                                    48
No Calling Entity Award              Tenders and Quotations         Total Value   Name of Supplier
                  Publication Date                                  Awarded ($)

87   Ministry of     05/01/2007      Construction of Changi Prison 29,330,000     ARRAY ENGINEERING &
     Home Affairs-                   Complex -Staff housing phase 2               CONSTRUCTION PTE. LTD
     Prison                          AT Changi North Way
     Department
88   Ministry of     13/12/2006      2-year period contract for      2,288,310    1.HONH SING CO. (PTE) LTD
     Home Affairs-                   supply and delivery of Fabric                2.SIN MING INDUSTRIES (PTE) LTD.
     Prison                          and Kit items to various                     3.GALYE HOLDINGS PTE LTD
     Department                      institutions of SPS,SPF and ICA              4.RIVER EAST ENTERPRISES PTE
                                     with an option to extend for                 LTD
                                     another year                                 5.SERBEST TRADING ENTERPRISE
                                                                                  PTE LTD
                                                                                  6.SEE SENG INDUSTRIAL SUPPLIER
                                                                                  7.KHIENG BENG TRADING
                                                                                  8.BOURGEOIS ENTERPRISE

89* Ministry of      04/09/2006      Supply of 4-wheel drive station 759,000      VANTAGE AUTOMOTIVE LTD
    Home Affairs-                    wagon vehicles
    Singapore
    Police Force
90 Ministry of       06/10/2006      Maintenance of Building Works 2,392,600      HOBBY CONSTRUCTION (PTE.) LTD
    Home Affairs-                    for SPF Properties
    Singapore
    Police Force
91 Ministry of       10/10/2006      PROVISION OF ARMED             2,689,632     CISCO SECURITY PTE LTD
    Home Affairs-                    SECURITY SERVICES AT
    Singapore                        POLICE COAST GUARD
    Police Force
92 Ministry of       24/11/2006      Comprehensive Maintenance of 1,209,060       TRANE SINGAPORE
    Home Affairs-                    Air and Water Cooled Chillers
    Singapore
    Police Force
93 National          19/10/2006      Proposed Additions &           17,300,000    ARRAY ENGINEERING &
    Environment                      Alterations to existing                      CONSTRUCTION PTE. LTD.
    Agency                           Market/Lock up Stalls/Food
                                     Centre at Blk 335 Smith Street
94   National        19/10/2006      Proposed A & A to Existing     6,860,000     KEN-PAL (S) PTE LTD
     Environment                     Single Storey Market (Block
     Agency                          92), Existing Single Storey
                                     Food Centre (Blk 90 & 91) &
                                     Addition of 1 No. of ESS at
                                     Whampoa Drive.
95   National        28/07/2006      Licence to Operate and Manage 725,328        BLENWEL AGENCIES PTE. LTD.
     Environment                     Car Park at Taman Jurong
     Agency                          Market & Food Centre.

96   National        15/09/2006      PART A: Additions &            938,222       MAGMA BUILDERS PTE LTD
     Environment                     Alterations to existing Single
     Agency                          Storey Food Centre at Blk
                                     22A/22B Havelock Road.
                                     PART B: Demolition of Blk 86
                                     Zion Road.
97   National        29/11/2006      The Provision of Application   3,378,690     SINGAPORE COMPUTER SYSTEMS
     Environment                     and System Software                          LTD
     Agency                          Maintenance and Support
                                     Services for the Integrated
                                     Licensing System and Attend-
                                     To-A-Demise for National
                                     Environment Agency.
98   National        20/09/2006      To supply, install, test and   1,091,396     1.HEWLETT-PACKARD SINGAPORE
     Library Board                   commission a thesaurus and                   (SALES) PTE. LTD
                                     taxonomy editor and a concept                2.ACCESS INNOVATIONS, INC
                                     extraction management system
                                     with all the relevant software
                                     licences




                                                                                                                     49
No Calling Entity Award              Tenders and Quotations             Total Value   Name of Supplier
                  Publication Date                                      Awarded ($)

99   National          28/11/2006    Appointment of a Contractor to 525,372           HEWLETT-PACKARD SINGAPORE
     Library Board                   supply; install; test and                        (SALES) PTE LTD
                                     commission a Digital Object
                                     Identifier (DOI) module with all
                                     the relevant software licences
                                     for NLB
100 National Parks     26/10/2006    Proposed development of          2,606,000       CGW CONSTRUCTION &
    Board                            Labrador Park extension on lots                  ENGINEERING (S) PTE LTD
                                     00492 PT etc Mukim 03 at
                                     Labrador Villa Road Port Road
                                     (Bukit Merah Planning area)
101 National Parks     01/11/2006    Nominated Sub Contract for the 632,761           PRINCE'S LANDSCAPE AND
    Board                            supply, delivery and planting of                 CONSTRUCTION PTE LTD
                                     softscape at the proposed
                                     development of Sungei Cina
                                     Park, Singapore.
102 National Parks     09/11/2006    Proposed development of            4,293,000     KUAN AIK HONG CONSTRUCTION
    Board                            Sengkang park.                                   PTE LTD

103 National Parks     19/10/2006    Nominated sub-contract for       1,538,000       PERMASTEELISA SINGAPORE PTE
    Board                            glass facade for the proposed                    LTD
                                     prototype glasshouses at
                                     Horticulture Park.
104 National Parks     20/10/2006    Proposed prototype glasshouses 5,032,411         PLANAR ONE & ASSOCIATES PTE
    Board                            at horticulture park, Singapore.                 LTD

105 National Parks     20/10/2006    Nominated Sub-Contract for         2,356,800     KOYO ENGINEERING (S.E. ASIA)
    Board                            Mechanical and Electrical                        PTE. LTD.
                                     Services for the proposed
                                     prototype glasshouses at
                                     Horticulture Park.
106 National Parks     03/01/2007    Nominated Subcontract for          683,977       SAN LIM TRANSPORT &
    Board                            landscaping for proposed                         CONSTRUCTION PTE LTD
                                     development of Sengkang Park.
107 Ngee Ann           06/10/2006    Tender for Proposed Upgrading      2,888,000     LIAN HUAH ENGINEERING PTE LTD
    Polytechnic                      of Existing Electrical
                                     Distribution Network at Ngee
                                     Ann Polytechnic
108 People's           12/10/2006    Proposed Additions &               2,370,000     LOGISTICS CONSTRUCTION PTE
    Association                      Alterations to Existing Chua                     LTD
                                     Chu Kang Community Club at
                                     Lot 1404 Mk 11 at 35 Teck
                                     Whye Avenue
109 People's           12/10/2006    Cyclical Maintenance               633,800       TANG'S ENGINEERING PTE LTD
    Association                      Programme and A & A Works
                                     (Optional) to Eunos Community
                                     Club
110 People's           27/12/2006    Proposed Erection of a 5 Storey    36,988,000    SINGAPORE PILING & CIVIL
    Association                      Office, 3 Storey Annex Blocks                    ENGINEERING PTE LTD
                                     and Additions and Alterations of
                                     an Existing Conservation
                                     Building at 2 Tyrwhitt Road For
                                     People's Association

111 People's           11/12/2006    Proposed Design & Build       549,766            DN HYBRID PTE. LTD.
    Association                      Punggol North Void-Deck
                                     Community Centre at Blk 172B
                                     & Blk 172C, Edgedale Plains
                                     and RC Centre at Blk 163A &
                                     Blk 163B, Punggol Central,
                                     Singapore
112 Public Utilities   05/10/2006    Proposed Water Pipelines from 11,556,689         LEY CHOON CONSTRUCTIONS AND
    Board                            Punggol-Serangoon Pumping                        ENGINEERING PTE LTD
                                     Station to Seletar Expressway




                                                                                                                      50
No Calling Entity Award              Tenders and Quotations            Total Value   Name of Supplier
                  Publication Date                                     Awarded ($)

113 Public Utilities   10/11/2006    Punggol-Serangoon Reservoir       32,050,000    SINGAPORE PILING & CIVIL
    Board                            Scheme: Contract 5 -Proposed                    ENGINEERING PTE LTD
                                     Punggol-Serangoon Pumping
                                     Station,Intake, Structure and
                                     Ancillary Works
114 Public Utilities   24/08/2006    PUB HQ offices at the             796,358       VANGUARD INTERIORS PTE LTD
    Board                            Environment Building Package
                                     1 -Office System furniture
115 Public Utilities   30/08/2006    Rehabilitation of Sewerage        3,759,486     SMITECH ENGINEERING PTE LTD
    Board                            Systems in Marina Catchment
                                     Contract 2 -Rochor Sub-
                                     Catchment
116 Public Utilities   15/09/2006    Proposed Redevelopment to         5,409,260     LEE HONG CONSTRUCTION CO.
    Board                            Bedok Reservoir Park (Contract                  (PTE ). LTD
                                     1) at Bedok Reservoir Road,
                                     Tampines Ave 10
117 Public Utilities   10/11/2006    Deep Tunnel Sewerage System -     15,900,000    BUILDING CONSTRUCTION CO.
    Board                            Tampines Link Sewers Contract                   (PTE) LTD
                                     2
118 Public Utilities   19/08/2006    PUB HQ offices at the             1,151,443     TAT WAI ENTERPRISE PTE LTD
    Board                            Environment Building Package
                                     6 -Office Builder Works
119 Public Utilities   07/11/2006    Proposed Pipejacking across       3,485,185     SHENG KEONG CONSTRUCTION
    Board                            Woodlands Road, Malayan                         PTE. LTD.
                                     Railway Reserve and Pang Sua
                                     Canal for 2200mm diameter and
                                     1200mm diameter Water
                                     Pipelines
120 Public Utilities   06/10/2006    Proposed Sewer for Changi         5,776,533     AIK LEONG PLUMBING
    Board                            Prison Redevelopment                            CONSTRUCTION PTE LTD

121 Public Utilities   29/11/2006    Bedok NEWater Factory Phase 25,200,000          SALCON PTE. LTD
    Board                            II Extension

122 Public Utilities   19/09/2006    PUB HQ Offices at the             791,475       ASWOOD INTERIOR PTE LTD
    Board                            Environment Building Package
                                     8 -Lift Lobby and Toilet
123 Public Utilities   26/12/2006    Proposed Redevelopment to         5,330,000     WACON CONSTRUCTION &
    Board                            MacRitchie Reservoir Park, off                  TRADING PTE LTD
                                     Lornie Road
124 Public Utilities   08/12/2006    Proposed Kolam Ayer               2,373,000     SWEE BUILDERS PTE LTD
    Board                            Demonstration Project at Sungei
                                     Kallang on Lot MK 24-9286P at
                                     Kallang Bahru Ville
125 Public Utilities   11/12/2006    Proposed Sewers in Seletar Area   4,948,000     KINGVIEW ENGINEERING PTE LTD
    Board

126 Public Utilities   19/12/2006    Supply and Delivery of          4,389,202       THE CHEMICAL CORPORATION OF
    Board                            Aluminium Sulphate, Sodium                      SINGAPORE PTE LTD
                                     Silicofluoride and Liquid
                                     Chlorine to Waterworks in
                                     Johor
127 Sentosa            14/12/2006    Proposed landscape planting     1,318,435       HORTI-FLORA SERVICES PTE LTD
    Development                      programme : General planting
    Corporation                      for Lazaeus, Pulau Seringat and
                                     Kias for southern islands
                                     development
128 Singapore Land 10/11/2006        Tender for State Property at 2  1,283,040       ETONHOUSE INTERNATIONAL
    Authority                        Orchard Boulevard Singapore                     HOLDINGS PTE. LTD
                                     248643 (former SANA House);
                                     3+3+3 years or less till year
                                     2015 Tenure
129 Singapore Land 25/11/2006        Tender for State Property at 5    825,000       PHIL ENTERPRISE PTE. LTD.
    Authority                        Towner Road, Singapore
                                     327805 (former ITE McNair
                                     Campus); 3+3+3 years Tenure




                                                                                                                    51
No Calling Entity Award              Tenders and Quotations               Total Value   Name of Supplier
                  Publication Date                                        Awarded ($)

130 Singapore Land 28/12/2006        Tender of Land Parcel                880,000       VERONICA GAN
    Authority                        LCK181A at Neo Tiew Lane 2

131 Singapore Land 28/12/2006        Tender for State Property at 1       1,260,237     ORCHARD SCHOOL OF ARTS AND
    Authority                        Lorong J Telok Kurau,                              COMMERCE
                                     Singapore 425792 (former
                                     SCDF Camp); 3+3+3 years
132 Singapore        19/10/2006      Proposed domestic water tanks,       955,000       TRIUMPH PLUMBING &
    Polytechnic                      pumps & associated builder's                       RENOVATION CONTRACTOR PTE.
                                     works at Blks T1 to T11, W1 to                     LTD.
                                     W5, etc at Singapore
                                     Polytechnic
133 Singapore        05/01/2007      Invitation to Tender for the         2,899,111     MASTER BUILDER PTE LTD
    Sports Council                   Upgrading Works to Woodlands
                                     Swimming Complex at 3
                                     Woodlands Street 13, Singapore
134 Singapore        20/11/2006      Tender for provision of              1,155,000     1.ENVIRONMENTAL LANDSCAPE
    Sports Council                   grasscutting services to                           PTE LTD
                                     Singapore Sports Council from                      2.CPK CONTRACTOR PTE LTD
                                     1 April 2007 TO 31 March 2010                      3.BSG CONSTRUCTION PTE. LTD.
135 Singapore        14/11/2006      Tender for Christmas Light-Up        1,500,000     RICH-ART ENTERPRISES PTE LTD
    Tourism Board                    2006 -Supply & Construction
                                     Services
136 Singapore        08/12/2006      Tender for Maintenance               1,600,020     INDECO ENGINEERS (PTE) LTD
    Tourism Board                    Contract for Tourism Court

137 Singapore        10/11/2006      Invitation to tender for provision   594,649       ESIS ASIA PACIFIC PTE. LTD.
    Workforce                        of consultancy services for the
    Development                      development of workplace
    Agency                           safety and health professionals
                                     Singapore Workforce skills
                                     qualifications system
138 Singapore        07/09/2006      Invitation to tender for             519,750       WATSON WYATT SINGAPORE PTE
    Workforce                        consultancy service for th                         LTD
    Development                      development of the competency
    Agency                           map & workforce skills
                                     qualifications framework for the
                                     Human Resource sector for
                                     WDA
139 Singapore        22/09/2006      Invitation to tender for provision   715,452       CREATIVE INDUSTRIES
    Workforce                        of consultancy service for the                     DEVELOPMENT AGENCY
    Development                      development of the Singapore
    Agency                           Creative Industries cluster
                                     workforce skills qualifications
                                     system for WDA
140 Temasek          13/12/2006      Supply & rent (incldg                587,500       ACHIEVERS PLUS LLP
    Polytechnic                      Management) Graduation Attire
                                     to TP for Graduation 2007 to
                                     2011 with an option to extend
                                     on an annual basis up to a max
                                     of 5 yrs
141 Temasek          13/11/2006      ELectronic, Electrical, Industrial   500,000       FARNELL COMPONENTS PTE LTD
    Polytechnic                      Components & Tools for a
                                     period of 1 yr from 15 Nov 06
                                     to 14 Nov 07 with an option to
                                     extend for another 1 year to
                                     Temasek ENG School,TP
142 Temasek          26/10/2006      Proposed Additions and               5,733,000     KUAN AIK HONG CONSTRUCTION
    Polytechnic                      Alterations to existing 3-Storey                   PTE LTD
                                     Teaching Facilities at Block 31
                                     on Lot 6163 MK 28 at 21
                                     Tampines Avenue 1




                                                                                                                       52
No Calling Entity Award              Tenders and Quotations          Total Value   Name of Supplier
                  Publication Date                                   Awarded ($)

143 Temasek        26/10/2006        Nominated Sub-contract for the 1,672,000      SOMERVILLE (SINGAPORE) PTE LTD
    Polytechnic                      Design, Supply and Installation
                                     of Kitchen Equipment to Block
                                     31 at Temasek Polytechnic
                                     Campus at 21 Tampines Avenue
                                     1
144 Temasek        12/10/2006        Tender for the supply, delivery, 692,475      TELEDATA (SINGAPORE) LTD.
    Polytechnic                      installation and commissioning
                                     of the Upgrade of PABX to
                                     Temasek Polytechnic
145 Urban         08/12/2006         Tender For Hotel Site At         73,000,000   LASALLE LAO SINGAPORE PTE LTD
    Redevelopment                    Bencoolen Street
    Authority

146 Urban         04/01/2007         Proposed Taking Delivery and    928,000       CHUAN LIM CONSTRUCTION PTE
    Redevelopment                    Disposal of Excavated Rock                    LTD
    Authority                        from Marina Bay Construction
                                     Site
147 Urban         30/11/2006         Tender For Hotel Site At        45,800,000    REPUBLIC HOTELS & RESORTS LTD
    Redevelopment                    Mohamed Sultan Road
    Authority

148 Urban         25/08/2006         Tender For The Land Parcel At 617,200,000     LEND LEASE RETAIL INVESTMENTS
    Redevelopment                    Orchard Road/Somerset Road                    1 PTE LTD
    Authority                        (Somerset Central)

149 Urban         03/11/2006         Design, Supply, Delivery,     1,518,416       STERIA ASIA PTE LTD
    Redevelopment                    Installation, Testing And
    Authority                        Commissioning Of The Car
                                     Parks Administration And
                                     Management System With
                                     Maintenance And Other Options
150 Urban         26/07/2006         Tender For A Residential Site 238,000,000     FRASERS CENTREPOINT LTD
    Redevelopment                    At Sinaran Drive
    Authority

151 Urban         31/08/2006         Tender For Hotel Site At        55,500,000    PARKSING PROPERTY PTE. LTD
    Redevelopment                    Clemenceau Avenue / Unity
    Authority                        Street

152 Urban         20/12/2006         Tender For The Site At Collyer 165,800,000    PRECIOUS TREASURE PTE LTD
    Redevelopment                    Quay
    Authority




                                                                                                                    53
                                                                             Appendix 3

A3.1        List of Political Connection of Companies Awarded Government Contracts*

No       Name of Company                   Board Size    No of P/C(s)        Name of P/C        Board Position           Political Connection Description

89       VANTAGE AUTOMOTIVE LIMITED             5                1            Wong Kwei           Independent Chairman   Ex Member of Parliament
                                                                              Cheong
*Only one company with political connection has been awarded a government contract during our sample period.




A3.2        List of Political Connection of Companies Newly Listed from 1997-2002

No        Name of Company                       Board     No of P/C(s)       Name of P/C        Board Position           Political Connection Description
                                                Size
1997
   1      SAMUDERA SHIPPING LINE LTD                10           1           Chng Hee Kok       Independent Director     Ex Member of Parliament
   2      PROGEN HOLDINGS LTD                        6           2           Tan Eng Liang      Independent Director     Ex Senior Minister of State
                                                                             Ch'ng Jit Koon     Independent Director     Ex Member of Parliament
1998
   1      MAGNECOMP INTERNATIONAL LTD               5            1           Ong Chit Chung     Independent Director     Current Member of Parliament
   2      BRILLIANT MANUFACTURING LTD               6            1           Chng Hee Kok       Independent Director     Current Member of Parliament
   3      EASTERN ASIA TECHNOLOGY LTD               4            1           Ch'ng Jit Koon     Independent Director     Ex Member of Parliament
1999
   1      CHOSEN HOLDINGS LIMITED                   7            1           Chew Heng          Independent Director     Current Member of Parliament
                                                                             Ching
     2    LIAN BENG GROUP LTD                       7            2           Tan Swee Hong      Executive Director       Member of the Ministry of Manpower's Advisory
                                                                                                                         Committee
                                                                             Wan Soon Bee       Independent Director     Current Member of Parliament
     3    POH TIONG CHOON LOGISTICS LTD             7            1           Lew Syn Pau        Independent Director     Current Member of Parliament
     4    NERA TELECOMMUNICATIONS LTD               8            2           S Chandra Das      Non-executive Chairman   Ex Member of Parliament
                                                                             Lau Ping Sum       Independent director     Ex Member of Parliament
     5    SINGAPORE FOOD INDUSTRIES LTD             8            3           Heng Swee Keat     Independent director     Ex Principal Private Secretary to Senior
                                                                                                                         Minister
                                                                             Tay Buan Huat,     Executive Director       Honorary Queensland Business Ambassador
                                                                             Peter
                                                                             Huang Chang Yi     Independent director     Honorary Queensland Business Ambassador
     6    CHIP ENG SENG CORPORATION LTD             7            1           Goh Chee Wee       Independent director     Ex Member of Parliament
     7    HO BEE INVESTMENT LIMITED                 5            1           Ch'ng Jit Koon     Independent director     Ex Member of Parliament
     8    MAGNUS ENERGY GROUP LTD                   5            1           Lew Syn Pau        Independent director     Current Member of Parliament
     9    KS ENERGY SERVICES LIMITED                6            1           Chew Heng          Independent Director     Current Member of Parliament
                                                                             Ching
  10      ASIAN MICRO HOLDINGS LTD                  7            1           Wang Kai Yuen      Independent Director     Current Member of Parliament
  11      EAGLE BRAND HOLDINGS LTD                  10           1           Lee Yiok Seng      Non-Executive Director   Ex Parliamentary Secretary

                                                                                                                                                                    54
                                                            Appendix 3 (Continued)

No       Name of Company                 Board   No of P/C(s)    Name of P/C       Board Position           Political Connection Description
                                         Size
2000
   1     GLOBAL VOICE GROUP LIMITED        6            1        Ng Jui Ping       Executive Chairman       Ex Chief of Defence Force
   2     UNISTEEL TECHNOLOGY LTD           6            1        Ng Jui Ping       Independent Director     Ex Chief of Defence Force
   3     MANHATTAN RESOURCES LIMITED       5            1        Tan Eng Liang     Independent Director     Ex Senior Minister of State for National
                                                                                                            Development
                                                                                                            and Finance
     4   LAFE TECHNOLOGY LIMITED           7            1        Lew Syn Pau       Independent Director     Ex Member of Parliament
     5   FOOD EMPIRE HOLDINGS LIMITED      6            2        Lew Syn Pau       Independent Director     Ex Member of Parliament
                                                                 Ong Kian Min      Independent Director     Current Member of Parliament
     6   SINGAPORE AIRPORT TRML SVCS       7            1        Dr. Hong Hai      Independent Director     Ex Member of Parliament
         LTD
   7     SIA ENGINEERING CO LTD            8            1        Bey Soo Khiang    Director                 Ex Chief of Defence Force
   8     ACHIEVA LIMITED                   8            1        Lew Syn Pau       Independent Director     Ex Member of Parliament
   9     EZYHEALTH ASIA PACIFIC LTD        5            1        Leong Horn Kee    Independent Director     Current Member of Parliament
  10     SMRT CORPORATION LTD              9            2        Kwek Siew Jin     President                Ex Chief of Navy
                                                                 Loh Kwok Hoong    Independent Director     Singapore's Ambassador to Poland
  11     EU YAN SANG INTERNATIONAL LTD     7            1        Lee Gek           Independent Director     Ex Member of Parliament
                                                                 Choo,Jennifer
  12     OSIM INTERNATIONAL LTD            5            1        Ong Kian Min      Independent Director     Current Member of Parliament
  13     RSH LIMITED                      8             1        Lew Syn Pau       Independent Director     Ex Member of Parliament
  14     JAPAN LAND LIMITED               8             1        Sin Boon Ann      Independent Director     Current Member of Parliament
  15     SIM LIAN GROUP LIMITED           8             1        Ong Chit Chung    Independent Director     Ex Member of Parliament
  16     SINGAPORE EXCHANGE LIMITED       11            1        Yuvaraj Pillay,   Chairman                 Ex Permanent Secretary in Government
                                                                 Joseph
  17     CRAFT PRINT INTERNATIONAL LTD     4            1        Chiang Hai Ding   Independent Director     Ex Member of Parliament
  18     THAI VILLAGE HOLDINGS LTD         6            1        Teo Ho Pin        Independent Director     Current Member of Parliament
  19     NEW WAVE TECHNOLOGIES LTD         9            2        Ch'ng Jit Koon    Non-executive Chairman   Ex Senior Minister of State
                                                                 Lau Ping Sum,     Independent Director     Ex Member of Parliament
                                                                 Pearce
  20     SUNLIGHT GROUP HLDG LTD           6            1        Foo Kok Swee      Independent Director     Ambassador to the Slovak Republic
  21     NYLECT TECHNOLOGY LIMITED         6            1        Wang Kai Yuen     Independent Director     Current Member of Parliament
  22     KING WAN CORPORATION LIMITED      6            2        Goh Chee Wee      Independent Director     Current Member of Parliament
                                                                 Foo Kok Swee      Independent Director     Ambassador to the Slovak Republic




                                                                                                                                                       55
                                            Appendix 3 (Continued)

2001
   1   ECS HOLDINGS LTD            10   1        Lin Chien        Chairman                 Current Member of Parliament
   2   FISCHER TECH LTD            7    1        Foo Meng Tong    Chairman                 Ambassador to France
                                                 Lum Ooi Lin
   3   HYFLUX LTD                  7    1        Olivia           Managing Director        Current Member of Parliament
   4   TUNG LOK RESTAURANTS 2000   6    3        Ker Sin Tze      Independent Director     Ex Minister of State
                                                 Tan Eng Liang    Independent Director     Ex Member of Parliament
                                                 Ch'ng Jit Koon   Independent Director     Ex Member of Parliament
   5   STARTECH ELECTRONICS LTD    6    1        Ong Kian Min     Independent Director     Current Member of Parliament
   6   TEE INTERNATIONAL LTD       6    1        Ong Chit Chung   Chairman                 Current Member of Parliament
2002
                                                 Choo Wee
   1   ROWSLEY LTD                 6    2        Leong            Chairman                 Ex Chief of Defence Force
                                                 Ho Tat Kin       Independent Director     Ex Member of Parliament
                                                 Lim Chun Leng,
   2   NTI INTERNATIONAL LTD       6    1        Michael          Independent Director     Current Member of Parliament
   3   NERA ELECTRONICS LTD        7    1        S Chandra Das    Non-executive Chairman   Ex Member of Parliament
   4   MOBILEONE LTD               11   1        Lim Chee Onn     Chairman                 Ex Minister of State
   5   MFS TECHNOLOGY LTD          7    1        Sin Boon Ann     Independent Director     Current Member of Parliament
   6   DAYEN ENVIRONMENTAL LTD     5    1        Ho Kah Leong     Independent Director     Ex Permanent Secretary
   7   WESTECH ELECTRONICS LTD     5    1        Ong Chit Chung   Independent Director     Current Member of Parliament
                                                 Chen Seow
   8   OKP HOLDINGS LTD            8    1        Phun, John       Independent Director     Ex Minister of State
   9   ECON HEALTHCARE LIMITED     5    1        Vasoo Sushilan   Independent Director     Ex Member of Parliament




                                                                                                                          56