The Largest Asian Debt Default... in SG.

I discovered today the reason for perpetually low valuations
of Golden Agri. Compared to say SGX peers like Wilmar
and Indo-Agri, the valuations for Golden are truly dismal.

Turns out there's an exciting bit of history behind this.
The parent company of Golden - Sinar Mas, is headed
by the "esteemed" Widjaya family from Indonesia.
It is the very same family embroiled in the bond default of
Asian Pulp and Paper (APP) in 2001.
To this day, it remains the LARGEST debt default in Asian history.

To cut a long story short, the Widjaya's used
1) a very enticing sales-pitch involving emerging markets
2) to borrow huge sums of money
3) at high interest rates
4) which they eventually cldnt afford to pay
5) when the business wasn't half as good as they predicted.

To help with the window dressing - they pitched APP as
a "Singapore-based company" when it was in reality all
run by Indonesians working in SG. And then they managed to
get it to list on the NYSE as an ADR - no mean feat eh.

When it all came crashing down in March 2001, the group froze
repayments on all debt obligations. This, I repeat, was and still is
the largest corporate default in Asia.
Of the some US$13.9 billion they managed to borrow, most creditors
received less than 10% of their loan value.
The clever Widjayas even got Indonesia courts to declare that
some of their bond issues to be illegal and thus not subject to repayment.
Bravo!!!

Meanwhile, some US$3 - 4 billion of the money just vanished.
Disappeared. Unaccounted for.
Where to? Perhaps one might want to ask the Widjayas.
With people like tt in charge, it's no wonder investors hesitate before
putting money into Golden Agri.

Btw, a BusinessWeek Article in 2001 on the APP debacle
features this fund manager - I call her Ms H who apparently bought
$500 000 of APP bonds from a salesperson without doing
proper due diligence. She skimmed thru the prospectus,
taking them at face value, and was reassured becos a
"top wall-street firm signed the prospectus".

Dunno abt you... But to me tt sounds like the grossest of incompetencies.
Call yrself a fund manager? C'mon she sounds even more gullible
than the average aunty on the street.
A search on Google reveals that she has now moved
on to to work in a certain "Asian Opportunities Fund".
Good luck to all who have bought into it.

I save the best for the last: It is stated on her CV
that Ms. H graduated from NUS Business School.
Horrors!!! Juz what did they teach her man?