Publication: The Edge, p 18-21 Date: 10 September 201 2 Headline: Singapore - Home to the world's super-rich

Home to the world's

B hupen'dra Kumar Modi wasted no time in picking out a spanking $15.5 mil- lion penthouse when he was house- hunting in Singapore in 2008. It took him, in his own words. just minutes

to decide on buying the 5,834 sq ft apartment on the 63rd floor of The SailaMarina Bay, a luxury waterfront project by City Develop- ments. Befitting the tycoon's penchant for the finer things in life, the unit turned out to be the most expensive of the condominium's 1.111 apartments.

The founder of Spice Global, a telecom- munications and technology group with rev- enue of more than USS2 billion ($2.5 billion). has been based in Singapore ever since, after living in a number of major cities around the world previously. His last stop before moving here was Beverly Hills, California, where he had an 8,000 sq ft. five-bedroom house. His pe~rthouse at The Sail serves as his home of- fice and a place where he entertains business associates and friends.

With his move. Spice Global, too. has shiIted its headquarters to Singapore, from Mumbai. Flush with Ires11 funds after selling his India- based mobile telephony firm Spice Communi- cations in 2008. Modi had looked to Southeast Asia for opportunities in the telecommunica- tions and technology space and to start busi- nesses that his children could run. He settled on Singapore as the base for Spice Global after

the company acquired Mainboard-listed Media- Ring, an Asia-focused Internet telephony firm, in 2009. Spice Global's entities then included India-listed handset maker S Mobility.

The company formerly known as Media- Ring, now renamed S Pi, has since further expanded its reach in the region by acquiring a number of handset retailers and makers in Indonesia. Thailand and India, and rolled out new services and products in other markets such as Africa and the Middle East.

Modi, 64. doesn't view Singapore as just a base for his business but also as a place to live. He became a permanent resident in 2009, on Aug 15, India's Independence Day. In January this year, he went all the way, giving up his Indian passport for a pink identity card. Modi says his decision to become a Singapore citizen was a natural one lor somebody with business interests around the world and who needs to stay globally connected. Singapore, he figures, has all the attributes of a global city.

*There are very few countries in the world that are secular, democratic, open, have a de- sire to go to the next stage of creating a new society, and have an immigration policy to increase their populations," he tells The Edge Singapore. "lt suited my desire. I feel that the world is looking to create a new knowledge society. My desire has always been to help create this knowledge society. I think Singa- pore is trying to be that."

Modi is just one of a string of super-rich foreignerr who have decided to settle down in

Some of the wealthiest people in the world are choosing to live in Singapore. Is that good news for Singaporeans?

Singapore over the last few years. New Zea- of its assets. Then, there's the loquacious in- land-born investor Richard Chandler, estimat- vestment guru Jim Rogers, who sold his New ed by hrbes magazine to be worth USs2.9 bil- York mansion in 2007 to move to Singapore. lion, has been a Singapore permanent resident where his two young daughters are now stud- since 2008. His Richard Chandler Cop, head- ying in local schools. quartered in UOB Plaza 1, made headlines re- Coincidentally, the person who sold Modi cendy for being the biggest shareholder in 'Ib- his penthouse at The Sail in 2008 is also an ronto-listed Sino-Forest Corp, whose shares Indian native who took up Singapore citizen- have plummeted following allegations that the ship. Sudir Gupta, a New Delhi-born business- timber group had inflated the value of some man, received his education in Russia, where

S he earned a PhD in agriculture chemistry and r 1 started a tyre company that he later merged with a Dutch rival to form Amtel-Vtedestein.

!! which listed in London in 2005. Cupta became

1 I a Singapore citizen in 1997 and was listed by hrbes as one of the country's richest men in

' r 2006, with a net worth of US0320 million. Another foreigner who decided to call Sin-

$ ;pore home years ago is China-born Zhong - Sheng Jian, chairman and CEO of Yanlord laad Cmup. He became a citizen in 1992. three years

I ' after arriving here with his family to set up a

trading business. His 66% stake in Yanlord to-

i day has a market value of $1.45 billion.

The list of wealthy foreigners beating a path to Singapore's door continued to grow this year with the arrival of Australian coal magnate Nathan Tinkler, who is estimated by brbes to be worth USS825 million. A spokes- man for Tinkler said in June that the move would enable him to be closer to some of his

Modi. I nmrvr . v~ee how I can contribute a d help key investors and customers in Asia. Tinkler, the government make the right decisions, uplift the 36, sold his home in Australia in 2006 to raise youth here and make Singapore a global society cash to buy an old coal mine in Queensland

Source: The Edge O The Edge Publishing Private Limited. Permission required for reproduction.

--T clarified the issue with his Indian counterpart try. So, obviously we must have incentives to Manmohan Singh. attract funds here,"

As more wealthy foreigners choose to set In any case. Singapore's appeal as a home up base here, accusations of Singapore being is unlikely to diminish any time soon in the a tax haven are unlikely to stop. "It really de- eyes of well-heeled foreigners. For one thing, pends on how you define a tax haven. Even increased efforts by governments to rein in tax the US Government Accountabilty Office has evasion, particularly as Western nations grap- problems defining it," says Associate Professor ple with soaring budget deficits, could mean Khoo Teng Aun of the Singapore Management more of these individuals moving their funds

F University's School of Accountancy. "Sipore or setting up shop here. * I always encourages foreign funds to invest here "There is so much austerity in many coun- because it is developing itself as a fund man- tries, mostly in Europe, A lot of focus now agement centre. We want to grow this indus- has gone towards how taxation works for the

Publication: The Edge, p 18-21 Date: 10 September 201 2 Headline: Singapore - Home to the world's super-rich

Wiluan: It's not onty about the actual funds coming here; it's about the calibre of peopfe who relocate here

that he parlayed into a coal company and eventually sold for more than AS400 million ($510 million).

Another relatively young and very wealthy individual in Singapore is Facebooks co-found- er Eduardo Saverin, 30. The Brazilian native was reported to have been living here since 2009 and is now a permanent resident. Just days before shares of Facebook made their Nas- daq debut on May 18, US tax authorities said Saverin had renounced his US citizenship, al- though subsequent media reports said he did so last year.

A tax haven? 'kaditionally a transport and financial-servic- es hub for the region, Singapore has worked hard to position itself as a base for MNCs and foreign companies operating in Asia by cre- ating a transparent regulatory system and a pleasant and safe living environment. Over the past decade, it has also begun turning itself into a centre for private banking and wealth management. Notably, it abolished estate duty in 2008. It also has no capital gains tax. The maximum personal income and corporate tax rates are 20% and 17 %. respectively.

These factors, among others, are helping Singapore attract the ranks of the super-rich around the world. "Singapore is seen by these people as an efficient, clean jurisdiction with proper regulatory controls. That is a prime driver of people coming here," says a private banker who declines to be named.

Cynics, on the other hand, say it is Sin- gapore's low taxes, more than anything else, that are drawing wealthy foreigners. Certain- ly, the country has often been portrayed as a tax haven by foreign governments and the in- ternational media.

The Organisation for Economic Co-opera- tion and Development (OED) put the city-state on its international "grey" list of tax havens in early 2009, alongside 37 other countries such as Belgium, Switzerland and Luxembourg. It noted that Singapore had yet to fully abide by international tax standards, which included al- lowing exchanges of information with the tax authorities of other countries when specific in- formation on certain individuals was request- ed. The OECD took Singapore off that list lat- er that year after the country agreed to a new bilateral infomation-sharing pact.

More recently, in July this year, India's fi- nance ministry put out a white paper accus- ing Singapore, along with Mauritius, of being a tax haven and channel for so-called round-trip ping, where certain foreign direct investments into India were routed through the Southeast Asian state to avoid taxes and to conceal the identity of the ultimate sources of such invest- ments. The Indian government later conced- ed that it should not have labelled Singapore as such after Prime Minister Lee Hsien Loong

wealthy. I'm not saying it's a witch-hunt, but I think a lot of successful people feel that they are being targeted for their success. So, they say 'Screw it. I want to go to a place where I can be more appreciated'. Singapore is a place for that," says Mike Wiluan, CEO of Infinite Studios, a digital animation firm with opera- tions in Singapore and Batam.

"I'm not saying these successful people are coming to Singapore to hide their wealth. but they need to lay their foundation at some point somewhere so that if anything happens,

Source: The Edge O The Edge Publishing Private Limited. Permission required for reproduction.

Publication: The Edge, p 18-21 Date: 10 September 201 2 Headline: Singapore - Home to the world's super-rich

Government has acted to tighten influx of foreigners there's a nest egg. Even the super- wealthy must have a nest egg some- where, and Singapore's core strength is in its integrity in protecting in- vestments and incentivising invest- ments," adds Wiluan, 36, the mid- dle child of Kris Wiluan, the founder of Indonesia's Citramas Group and chairman and CEO of Mainboard- listed KS Energy.

Singapore doesn't just welcome foreigners' capital, but also foreign- ers themselves, according to Wilu- an. The way he sees it, Singapore is "a place where you can come as you are and be as you are" because of its cultural diversity and close links to the rest of the world. "If you go to Jakarta, KL, Ho Chi Minh City, Shanghai or Beijing, you can't get away with not knowing the culture and the local parlance. Singapore is different," he says. "You can pretty much come as an American or Eu- ropean and stay that way, and not have to change the way you are be- cause it's built in a very cosmopoli- tan way. That's how it has attracted so many people."

Making an impact An Indonesian with Singapore per- manent residency. Wiluan hobnobs often with the social elite in Singa- pore and believes that having a base of well-heeled foreigners, or what he calls "captains of industries", can only be positive for the country as a whole.

"It's not only about the actual funds coming here; it's about the cal- ibre of people who relocate here." he says. The way Wiluan sees it, if Sin- gapore is to advance and change for the better, it needs people who have made a difference in other places. "It's about attracting the very best, who will rub off some of their magic, of what they have done elsewhere. and make a way for that magic to fil- ter down, to make Singapore a more cosmopolitan environment and more attractive generally. "

Indeed. Singapore's relative open- ness to the world has contributed sub- stantially to its wealth. Various studies have shown that people in Singapore are among the wealthiest, if not the wealthiest, in the world. According to the Boston Consulting Group, the

city-state has the highest percentage of millionaire households worldwide, at 17%. A separate joint study last month by Knight Frank and Citi Pri- vate Bank described Singapore as the world's richest country in 2010, with CDP per capita of US$S6,532. Norway came next at $51,226, followed by the US at U%5,511. Hong Kongat U$45,301 and Switzerland at USr12.470.

Yet, the influence and actions of wealthy foreigners do not always sit well with the rest of the population. Singaporeans blame foreigners for driving up property prices and other living costs, and overburdening lo- cal infrastructure such as the MRT system and public roads.

A car crash in May involving Chi- nese private investor Ma Chi stoked a wave of criticism among Singapo- reans. Ma's Ferrari collided with a taxi, killing the cabbie and his pas- senger. The Chinese national died at the scene. He had lived in a penthouse in East Coast with his family and was reportedly making plans to apply for permanent residency here.

Even wealthy foreigners them- selves gripe about some of these is-

sues. Rising inflation, in particular, is a hot topic. "It's not a cheap city to live in." says Spice Global's Modi. "The cars are expensive. 1 paid so much duty on my car. When I got my Rolls-Royce, it cost me three times what it would have cost me in LA. For a top-class lifestyle, it's not a cheap place. The flats are not cheaper. The clubs are quite expen- sive. Offices are expensive. "

In fact, Singaporeans have a le- gitimate grievance when it comes to rising living costs, according to Wiluan. "For a young Singaporean who wants to live here, they've got to think about what they want to do to afford the basic things in life. And it's tough," he says. "HDB flats are becoming more expensive. Some are going for the same price as con- dos, and some condos are worth as much as landed houses, and landed houses are going at Malibu pGces." The result, he adds, is that homebuy- ers are saddled with huge mortgag- es and spend their life paying them off. *You're not working for yourself, but for the bank. It's tough, and that resentment builds up. "

the go-ahead has usually been fairly short, thanks to a 48-hour fast-track programme. Now, however, applica- tions may take longer to clear.

Acknowledging Singaporeans' growing unease about being crowd- ed out and having to face great- er competition for jobs, places in schools and so on, the government has acted to tighten the influx of foreigners. For example, earlier this year, the Financial Investor Scheme was scrapped, while requirements for the Global Investor Programme were made more stringent. Both pro- grammes essentially allowed well- heeled foreigners to become perma- nent residents quicker by investing in Singapore.

Presence in the market As far as the local stock market goes, foreign tycoons have long been asso- ciated with various Singapore-listed companies, such as Centing Siny- pore, which is headed by Malaysian Lim Kok Thay; and Overseas Union Enterprise, helmed by Indonesian Stephen Riady, who manages the Singapore businesses of Indonesian

Overall private home prices inched up 0.4% q-o-q in 242012 after slip- ping 0.1 % in 142012, according to URA, despite several rounds of meas- ures to curb demand and boost the supply of new homes in the past year. Meanwhile, the size of an av- erage private home has been shrink- ing with the proliferation of so-called shoebox apartments, which are typ- ically smaller than 500 sq ft (about 46.5 sq m).

On Sept 4, the government an- nounced a new policy to cap the de- velopment of shoebox units. From November, apartments in new sub- urban condo projects must have an average floor space of 70 sq m (753 sq ft). The idea is to prevent devel- opers from building whole blocks of shoebox apartments. The ruling came barely a year after the goveinrnent imposed an additional buyer's stamp duty of up to 10% in an attempt to cool investment demand for private homes. The move had the biggest impact on foreigners, who had to bear the maximum 10% addition- al duty for any residential proper- ty they buy.

Property transactions in Sento- sa Cove, where some of Singapore's most luxurious homes are found, have also become less hassle-free. Foreigners have traditionally had to seek approval from the %ngapore Land Authority to buy landed homes on Sentosa, but the waiting time to get

Source: The Edge O The Edge Publishing Private Limited. Permission required for reproduction.

conglomerate Lippo Group, which counts F&B distributor Auric Pacific among its investments here.

Other bigwigs include Indonesian- born Oei Hong Leong, who became a Singapore citizen in the 1980s. Oei is well known in the market for his Mi- das touch, and investors would often chase up the shares of any company he had just put money in. One that he recently had his eyes on was di- versified business group Intraco, al- though he subsequently decided not to proceed with the takeover.

Still, having these tycoons as heads or major shareholders of Singapore- listed companies doesn't necessarily mean investors would take favour- ably to their stocks or that the busi- ness of these firms would naturally do well. In the case of Modi's S i2i. the stock tumbled 33% in the first seven months of this year as inves- tors frowned on the company's con- tinued losses. The firm turned in its fifth straight quarterly loss in the three months to June. Its current market value is about $143 million.

Yet, Modi f i r e s that his contri- butions to Singapore will go beyond the sphere of business and finance. "Now that I am a citizen, I want to get actively involved in politics. 1 want to see how I can contribute and help the government make right decisions. uplift the youth here and make Singa- pore a global society." he says.

In fact, he is compiling a wish-list

Publication: The Edge, p 18-21 Date: 10 September 201 2 Headline: Singapore - Home to the world's super-rich

- - - - - - P az

Well-heeled foreigners in Singapom 0

A number of the world's super-rich have made the Southeast Asian city-state their home and become permanent residents or citir---

of sorts from Singaporeans he meets and is thinking of ways to help htl- W. those aspirations. "Every day, I'm getting feedback £rum different peo- ple. From my driver to my directors, I get a lot of things that people want to happen in Singapore. These are in different areas, such as sports, education, health, culture and the arts." he says. He expects to get the Iist completed by December. "I will then start directing it to different lev- els. I will start acting on it."

Modi's endeavour to help improve "the all-round quality of life" in Sin- gapore is an extension of his past ef- forts in India, where he started the Spice Foundation, which is respon- sible for his group's corporate so- cial responsibility programme. The Dayawati Modi Academy, which has been providing primary and second- ary schooI education for more than 25 years in the Indian cities of Ram- pur and Varanasi, is one of the foun- dation's outreach initiatives.

At the end of the day, Singapore seems poised to continue attracting more of the world's super-rich be- cause it's widely regarded as being at the forefront of Asia, the only re- gion in the world that has been able to deliver real growth. The country has also made an effort to shed the prim all-work-and-no-play image that i t has long been associated with.

As Wduan puts it, the city-state has become an alI-rounder. *It's a live work-play environment. Some plac- es you go, you can just play; there's no business to be made. Some pIac- es you go, it's just business; the play is not much. But when you look at Singapore, there's a bit of everything here that satisfies. "

1= Singapor~ Bmail Brazil

54 l b l @ ~ i a W s i n g a p S i i China h e m # l e 1 E i s ~ f m m Q d n a ' s ~

36 Cmhinii 825 mil Spendbrg abaut US1 mil lh on an

I undeveEDped codfiekl in Wedand and sellihg itfarmthan U W m i R i i

I

Singapore, I Australia Australia I I

Nathan Tmk, fwnder

and Tinkler Group

765 mil Hb M i i awch fbst *hslmm& fndwkd

I Indonesia

mUrethan200ch in€5es taDwwned~ manyofvvhiiwerelaterlirt#i.Recenlly

d

755 mil Betting big on d k Inbemet

325 mil Turning Hi+ from a small tooknaloer into a leading Singapore Singapm china I ekttwhcomponentmakecwithdientssuchas Apple, Research In Motion and Nih

31 5 mil C u - M n g Rqde.cum in S ibn Valley and Singapore Singapom India

Source: The Edge O The Edge Publishing Private Limited. Permission required for reproduction.