Asian Strategies Group

4. Key Personnel

__________: A Visionary Operating Close to the Edge

(Excerpts from a six-page study)

Main Fidings

_________ is a well known, aggressive Thai entrepreneur whose business interests are complex and far-flung. He generally operates within Thai business norms (which are much more permissive than international standards), and he himself has never been arrested for financial irregularities. He is closely associated, however, with business persons and politicians widely recognized as corrupt. He also is loosely tied to individuals who were implicated in illegal fundraising efforts during the 1996 electoral campaign in the United States.

_________'s financial situation is precarious, in part because he is over-leveraged and in part because the baht crisis has weakened banks that might otherwise be willing to restructure his debt. On the other hand, he is well connected politically and is adept at negotiating the shoals of Thai business.

The most careful kind of due diligence should be a core item in dealing with any of his companies, since their interlocking nature and shaky condition heightens the potential for hidden debt, disguised obligations, and corrupt practices.

Reputation as an Erratic Visionary

_________ is viewed as visionary out of control, overreaching himself and conceiving large- scale projects beyond his probable capacity to finance. He can behave unreasonably and is determined to get his way (typically with bankers who turn him down). He is a wheeler-dealer more than willing to pay off politicians and play on longstanding friendships.

His skills are more those of a entrepreneur/manager than an operator of a chemical complex, even though his family has been in the chemical business for years. As a technician, he was rated "0" by one informant. Nevertheless, he is capable of convincing firms of international repute to work with him.

Interlocking Shareholdings

_________ is a major shareholder in , which began as a producer and exporter of wood products in Northeast Thailand but has diversified widely in the last 15 years. The nature and extent of his interlocking shareholdings is difficult to assess because of the large number of shares held by Southern Holdings Ltd., essentially a "street-name" firm. However, it appears that __________. is at the top of the pyramid. Through personal guarantees, invariably required by banks, all of _________'s assets are at risk if a major unit fails.

Political Ties

Like any important businessman in Thailand, _________ maintains relationships with all major political parties. However, his closest ties are known to be with former Prime Minister _________, whose administration was among the most corrupt ever in Thailand. He also has a close relationship with _________, another of the country's more corrupt politicians.

Perilous Financial Situation

_________ is over-leveraged: his projects require a total investment in excess of baht 25 billion. He is also plagued with family members whom he cannot keep under control. Some sources report that he is teetering on the knife's edge. The only factor in his favor is that the banks know they could not manage his assets if they called in his debts.

Comments about ___________

When asked about _________'s "integrity, competence and reliability", a leading financial expert and former managing director of a large Thai investment bank responded: "None of the above."

In discussing _________ with the head of a major Thai financial institution, we asked whether he would advise people to do business with _________. He paused an extraordinarily long period of time. We remarked that his silence spoke volumes. He said, "How can I advise them not do business with him when we have lent him more than a billion Baht?"

Assessment of ___________

(Excerpts from a five-page assessment)

The Issues

What is _____________'s reputation in Taiwan for competence?

What is his reputation for integrity?

What is the nature of accusations against him?

Summary Evaluation

___________ is widely known in Taiwanese financial circles as an outstanding securities executive, according to a variety of well-placed sources.

___________ has a reputation for making few mistakes in determining where to invest funds and with whom to do business. His reputation for competence is so high that his name is almost automatically linked with success.

___________ is favorably known to both American officials and to the Taipei government. He has a sound reputation as a manager of _____________.

Although ___________ has never been involved in any scandals or had any significant legal problems, he was investigated several years ago for alleged tax improprieties. After an intensive investigation of every aspect of his personal and professional finances, he was cleared of any wrongdoing. The allegations apparently originated with competitors angered by what they regarded as double-dealing.

Such an incident does not in itself indicate that ___________ would be a bad or untrustworthy business partner. It does mean, in our opinion, that those dealing with him must be especially vigilant.

Competence as a Businessman

Outstanding Executive

___________ is widely known in Taiwan as an outstanding businessman, according to a variety of well-placed sources. A self-made man (he does not have a university degree), he rose through the ranks of the securities business, first abroad and later at home, to the point where he is universally accepted as the most innovative financial executive in Taiwan today. In 1990 ___________ was selected by a professional organization as Taiwan's top executive.

___________'s reputation for competence is so high that is name is almost automatically linked with success. Of special interest is the fact that he not only enjoys the highest reputation among his peers, but is also well appreciated among the rank and file of his companies.

Firm's Reputation Confirmed

An entirely separate source with a long-established involvement in the Taiwanese financial community confirms the high reputation of ___________'s firm and the high standards employed by its managers. According to this same source, the firm is one of the top two investment companies in the country.

The Tax Controversy and its Implications

Although ___________ has never been involved in any scandals or had any significant legal problems, we have confirmed that he was investigated several years ago for alleged tax improprieties. According to our financial specialist who investigated the issue with the Taiwanese authorities at our request, ___________ was fully cleared of any wrong-doing after an intensive investigation.

Our specialist could not learn why the investigation took place, but another of our well-placed sources, who has known ___________ and done business with him for many years, reported that ___________ was denounced to the tax authorities by rivals in retaliation for what they described as double-dealing.

We do not view this incident as a sign that ___________ would be a bad or untrustworthy business partner. It does mean, in our opinion, that those dealing with him must be especially vigilant.

    • It may be prudent, for example, to make certain that all agreements are clearly recorded in writing.
    • It may also be prudent to indicate to ___________ that reports of the investigation have emerged and to request his own explanation.
    • If he denies the report, a further cautionary flag is raised. But if he acknowledges it and explains persuasively how and why the investigation was initiated, the air could be cleared.

___________: A Well-Connected, Durable Philippine Businessman

(Main Points of a 13-page paper)

Main Points

____________ is well known as an entrepreneur and venture capitalist. His empire includes many Philippine companies, a Malaysian connection, and numerous joint ventures with well known multinational firms.

A schoolmate of President Ramos', ____________ is well connected and trusted. Should Ramos candidate Venecia lose the next presidential election, his influence could be diminished slightly. In any case, the smart money in Manila is picking Venecia.

____________'s reputation is marred by a feud pitting him against other members of his family. The feud is serious and long lasting, and any potential joint venture partner could become embroiled in it (See attachment A). Currently, ____________ is appealing a court judgment in favor of his cousin, ____________. We do not consider the case a serious threat to his position, however.

Characterized by one friend as a "lovable rogue," ____________ likes the good life. He is also known for generosity.

In the Philippine business community, ____________ is regarded as a "big thinker." Some say he is ruthless in his business dealings but always manages to stay on the right side of the law, accounting for his reputation for honesty.

____________ also has detractors. He has been described as hard to "handle," is the subject of rumors of "shady dealings," and allegedly has finances in "a terrible mess." Although we could not pin down any of these rumors, ____________'s reputation clearly has some blemishes.

The recent decline in the value of the peso has adversely affected ____________'s financial position, although he maintains substantial dollar accounts outside the Philippines. But the weak peso also increases the leverage available to foreign firms negotiating with him.

We are confident that ____________ will weather the storm because his business interests are diverse, and he is already an extremely wealthy man. Well connected to influential figures and part of the establishment, there is little chance of his going out of business.

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