MERGER OF NEWSPAPER COMPANIES (Prime Minister's meeting with directors)

Mr J.B. Jeyaretnam asked the Prime Minister if he met all the Directors of Times Publishing Berhad, The Straits Times Press and the Singapore News and Publications Ltd on the afternoon of the llth July 1984 before their merger into a holding company - Singapore Press Holdings - was announced in the press on the 12th July 1984.

The Prime Minister: Sir, I met the directors of the Times Publishing Berhad, the Straits Times Press and the Singapore News and Publications Ltd (SNPL) on the afternoon of 11 July 1984. When I met them, the two parties had already agreed on their merger in Singapore Press Holdings Ltd. They released the announcement of the merger terms that same afternoon.

Mr Jeyaretnam: Would the Prime Minister be good enough to say whether he saw them at their request, or whether they saw him at his request?

The Prime Minister: I saw them at the request of the two principal negotiators on both sides, the Times Publishing Berhad and the Singapore News and Publications Ltd, namely, Mr Lyndley Holloway and Mr Lee Hee Seng. They had negotiated the merger terms.

Mr Jeyaretnam: Would the Prime Minister say or confirm whether this agreement, drafted or initialled, as he says, by these two chief executives in these companies, was presented to the other directors for the first time at the meeting in his office on 11 July? And were they then asked to initial or sign the agreement then and there?

The Prime Minister: How the directors had kept the other members of the Board informed was not my business. I was asked to meet them because the two negotiators had earlier known of Government policy which I had made clear to them, namely, that there was going to be free and open competition between the two publishing houses. Let me explain.

The Straits Times Group, in anticipation of competition, had pre-empted the market. It had monopolized or bought up all the syndicated rights to all the major publications in the English-speaking world - British, American, Australian, and so on. It had also bought up the best cartoons. It had also hired the best or the better journalists. There were, therefore, considerable obstacles to the Monitor breaking into the market. I made clear to both directors that the rules would allow for fair competition, that there could be no pre-emption by over-booking of syndicated articles or cartoons, and that there would be free bidding for the services of journalists, and that it was our intention to gradually allow a temporary inflow of foreign journalists to make up for the shortage of local ones.

The two chief negotiators knew what perhaps some members of the Straits Times Group did not know - that, with free rules of competition, it was unlikely that the Monitor could ever be crushed as so many other newspapers had been crushed in the past. Of course, it would have been a long and costly business, but there were three banks on the side of the Monitor - the Overseas Union Bank, the United Overseas Bank, and the Development Bank of Singapore. There were also the resources of the daily revenues of the Chinese newspapers to back it. It would have gone on five, seven more years, but there was no crushing it like The Standard, The Tribune, The Herald. The Herald did not last. It was owned by a former Chief Minister of Sabah and I knew it, and he knew it.

Mr Jeyaretnam: It was owned by his friend.

The Prime Minister: Because he owned it, I had no intention of allowing a Chief Minister of a friendly state to help his friends in Singapore. But some members of the Straits Times Group were under the impression that they could go for broke, and therefore, I was asked to confirm that that was the Government's position. I did so and, as far as I know, I needed no other words of persuasion to let them come to the obvious conclusion that they could either take up the cudgels and slog it out for five, seven or more years, and then share the market, or come to terms as best they can. It was not the Government's intention to back one side or the other. It was our intention that because of the change in the education policies, or rather, because of the options parents had exercised to send their children to English Language schools, two major Chinese newspaper groups, whose shareholders were primarily Chinese-educated, were going to lose their future readership. I, therefore, felt that we had an obligation to give them a look-in, into the future reader- ship, and that the rules must allow them an entree into the English-speaking world. They chose to settle. It would have made no difference to the Government whether they slogged it out or they settled. We have enough powers to make sure that both play according to the rules of the game. I make no apologies for these powers. They are necessary. And Singapore has prospered and thrived because we have exercised these powers wisely and judiciously.

Mr Jeyaretnam: Do I understand the Prime Minister to be saying that he saw these two principal directors before the meeting on the llth of July and explained to them what his thinking was? And then they came up with this draft?

The Prime Minister: A spectacular Dr Watson question! Yes, I did not see them together. I saw them separately. I made clear to each of them that there would be fair competition. I held up the entry of the SNPL group into the morning papers because they just did not have the journalists. And the arrangement was that they would be given three years in the afternoon press, build up their staff and then they could go into the morning press and the rules would be changed.

Mr Deputy Speaker: End of Question Time.