Published September 10, 2008
Time for Hong Leong to share its ideas
By EMILYN YAP

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SOME say patience is a virtue, but Hong Leong Group seems to have waited long enough.
Having invested in Thakral Corporation for years with no sign of sterling returns, the group has raised the pressure in its attempt to oust Thakral founder and chairman Kartar Singh Thakral from the board.
While Hong Leong has not given reasons for the move, Thakral's patchy performance could have forced its hand. The consumer electronics distribution business incurred a net loss of $6.3 million for H1 2008.
While it did score net profits of $5.5 million for the year ended Dec 31, 2007, earnings for 2006 were again $19.2 million deep in the red.
Such results would not be pleasing to Hong Leong, which certainly saw enough potential in Thakral to first invest in it in 2005.
Upping its stake gradually, Hong Leong even attempted a takeover of Thakral in 2006 which eventually fell through.
Some might say that Hong Leong is too quick to dismiss Thakral's ability to turn around. After all, it has managed to come out of bad times (including in 1999 when it reportedly incurred a $220 million foreign exchange loss).
There should also be little doubt about a founder's determination to keep his legacy going. As Mr Singh told BT on Monday, 'the company is repositioning its principal business, and I would like to see it through'.
Still, in the corporate world where time is money, three years must seem like a long time to Hong Leong and it has decided to seek a sweeping leadership change.
We can keep guessing, but the market will remain none the wiser about Hong Leong's motivations until it is ready to speak. Besides, other Thakral shareholders will need more information before they can pick a side.
For instance, how would any management change affect Thakral's plans to shift its business into real estate? With its experience and credentials, Hong Leong does look better equipped to lead the charge in this field than the Thakrals.
But one would also wonder why it would want additional exposure to real estate when it already has successful units such as City Developments in its stable.
Also: should Mr Singh leave the board, who would replace him and would the other two members of the Thakral family stay on?
For now, it is not clear how other Thakral shareholders are interpreting Hong Leong's move. There is little activity in the Thakral counter so far - the shares have stayed at four cents since Monday - so they could be waiting for more news.
This is where Hong Leong should come in, by sharing its motivations and strategies for Thakral with the market. At a time when it needs shareholder support, good reasons and strong plans would help it win votes. In such a case, patience may not be a virtue - and silence is certainly not golden.