The Business Times on 18 April 2011
Corporate lawyer Chen Show Mao, a Workers’ Party candidate in the upcoming elections, has just been honoured for his work on Agricultural Bank of China’s US$22b IPO last year.
IT’S easy to picture Chen Show Mao as a leading medical doctor with genteel bedside manners – which he probably would have been today had he gained admission into the local medical school after topping Singapore’s 1979 A-level examinations.
He went instead to Harvard, Oxford and Stanford – and is today a top-notch corporate lawyer in one of America’s most prestigious ‘white-shoe’ law firms, Davis Polk & Wardwell. In fact, he has just been named one of The American Lawyer’s Dealmakers of the Year for his leading role in one of the biggest and most significant deals of 2010, the US$22.1 billion initial public offering (IPO) of Agricultural Bank of China Ltd – which was a highly complex dual listing, to boot.
The bank wanted to raise a huge amount of money, very quickly, and in both domestic and international capital markets. It was a tall order, but the lawyer they turned to, Mr Chen, then based in Beijing, is well versed in such dual listings. In 2006, he led a Davis Polk team that advised China’s biggest bank, Industrial and Commercial Bank of China Limited, in what was then the world’s biggest IPO – US$21 billion in size – and the first to be listed in both Hong Kong and Shanghai.
Still, for AgBank’s complex IPO of historic size, Mr Chen and his team found themselves working under what he would later describe as some of ‘the most challenging circumstances I have seen’, including just a three-month window to get the IPO to market by July 2010.
Speaking to BT last week, Mr Chen said: ‘The ‘trickiest’ part was how to manage the execution process that involved a record number of participants – 11 lead underwriters and two financial advisers, and those were just the investment banks – in order to meet an unprecedented highly compressed timetable, made all the more challenging by the bank’s preference to defer a clear allocation of the underwriters’ rewards and responsibilities until the last practicable moment, even after the execution process had commenced. It was like herding cats.’
When it was launched last July, the AgBank IPO was the world’s biggest ever – a record which stood until November, when General Motors’ offering raised US$23 billion.
On the latest honours for his work, he said: ‘It is always gratifying to receive recognition for one’s professional accomplishments. We had a large team of lawyers and other colleagues spanning three continents working around the clock on the (AgBank) IPO. It would have been perfect if the accolade had gone to all of us.’
The Taiwan-born Singaporean – who took up citizenship in 1986, six years after serving national service – joined Davis Polk’s New York office in 1992 after receiving his law doctorate from Stanford. He moved to the firm’s Hong Kong office in 1999, became a partner the following year, and has, since 2007, been based in Beijing, where he is now managing partner of Davis Polk’s Beijing office. He has advised various Greater China corporations on major cross-border investments and securities offerings.
The ‘dealmaker’ accolade has perhaps come at a fitting time, as it doesn’t look likely that Mr Chen will be deeply involved in massive capital market transactions in the Greater China region in the near future, given his decision to relocate back to Singapore, where he grew up from the age of 11.
At 50, ‘in the second half of my life’, after years of helping corporate clients close business deals, he has embarked on a new mission, focusing on the needs and interests of a new ‘clientele’ of fellow citizens. The father of three is trading business suits for the light blue colours of the Workers’ Party, for his new job of helping to build up a strong, credible opposition in Singapore.
The specifics around just how he might continue his current China-focused US legal practice out of Singapore remain to be sorted out. ‘Whether or not I get elected, it is quite clear that I will not continue practising law the way I have, since time and effort will be required to serve constituents if elected, and to assist with party matters and prepare for future elections in any case.’
Family and friends, as well as former schoolmates and teachers who remember him as an outstanding model student in Catholic High, Anglo-Chinese School and National Junior College, were mostly surprised by his decision to enter politics on the opposition platform.
There have been ‘a lot of moral support but also some degree of concern’, he added. ‘Most of them feel, as my family does, that this work that I’ve chosen to take on is both arduous and uncertain.’
Asked how he would compare his challenges ahead with the demands of pulling off a complex IPO, Mr Chen said: ‘At the beginning, the tasks both appear daunting, the circumstances trying and the challenges seemingly unsurmountable. You learn to put your head down and work away at it, one step at a time, while keeping a large group of people together on more-or-less the same track.’
He had a keen interest in public matters as a student and, ‘like most people’, had been focused on his career as a young lawyer. But over time, ‘this sense grew stronger – that I really should be giving back something to society for everything that I have received, which has been a lot’, he said. ‘I attended schools, for example, with good teachers and the help of scholarships and financial aid from the different universities and from benefactors such as Cecil Rhodes.’
After earning an economics degree from Harvard in 1986, Mr Chen went to Oxford to study languages and history, and later jurisprudence, as a Rhodes scholar.
‘And I think it’s fair to say that all of them (teachers, benefactors, donors) probably had hopes and expectations that I will one day in turn make contributions to society. And for me, this is my community, Singapore.’
During his years abroad over the last three decades, he had been back regularly to see his parents, his sister and her family. In the past five years, it had been four or five visits a year. And while mulling over which political party to join, he dropped in at the Workers’ Party headquarters in Syed Alwi Road in 2007, and found, over a period of time, a meeting of minds on their shared goals for Singapore. He also kept in contact with party members who lived in Shanghai and Hong Kong, he said.
In recent weeks, he has been on almost daily house visits in the Aljunied, East Coast and Kallang-Moulmein GRC districts.
People have given him lots of encouragement, he said. They have handed him drinks, wrote him poems – ‘to encourage us on’ – and even offered ‘fashion tips’, he said, laughing. ‘Like trying different hair cuts and glasses.’
And people would need to come forward for the opposition in greater numbers, he said, ‘before we can talk about reaching our long-term goal’, which is to grow the opposition into a ‘rational, responsible and respectable presence in Parliament’ that is capable of forming an alternative government.
For himself, ‘my hope is that by standing for election, I will encourage more people to come forward, and make it more acceptable to Singaporeans for their sons and daughters to serve the country in opposition politics’.
Taking the first baby steps forward
CHEN Show Mao has a ‘very pragmatic’ response to the argument that a multi-party political system is potentially divisive and inefficient.
‘I’m just focused on what it is we can do to get the government to be more responsive to people’s needs, to different voices out there. For me, it’s simple: 82-2 is too much one-party dominance for our good.’
He adds: ‘Do we say, oh, because there could be potential problems with inefficiency when you get to a coalition government situation, and so that should stop us from taking the first, baby steps forward, to go from 82-2?’
The ultimate goal is to help improve people’s lives, says the Workers’ Party candidate. And the first steps are to build a credible opposition that can one day form an alternative government, and provide ‘real checks and balances’ on the government through competition, he says.
There will then be ‘less danger of policies being rushed through with little debate and transparency’, he says, citing the big influx of foreign workers in recent years, ‘presumably to drive economic growth but apparently without regard to productivity gains’, that has had impact on almost every sphere of life, from jobs, housing, schools, transportation to living space. ‘When did we decide as a country that we would pay the price for this type of growth? That arguably was the most important policy over the last few years but when was the debate?’
Mr Chen adds: ‘In the debate on ministerial salaries, the opposition MPs raised good points in my view. I thought Sylvia Lim’s speech was stirring, but it was as if minds were already made up.’
To him, the question is: ‘Over the long term, where do we want to be?’ Even today, ‘the government says: ‘If you don’t like us, you can vote us out’. But can we do that? I mean, most Singaporeans feel that we don’t have an opposition that’s capable of forming an alternative government right now.
We’ve been operating at 82-2 . . . So we have no choice in effect, and if we would like to give ourselves that choice and better governance as a result – it takes time, and it costs! We’d need to be prepared to cast some votes for opposition candidates, to give them opportunities, and hopefully they will develop and come through in the long run.’
It’s ‘like bringing up children’, he quips.
‘Is that the direction in which we want to go, I think, is the debate. And I’m squarely on one side of it – I think yes.’
Read also: Chen Show Mao in The American Lawyer’s Dealmakers Of The Year.