Q: Why do think the Vickers Ballas shareholders rejected the merger? Was it just a question of valuation?

A: I don't think you will ever know the true reason why some shareholders voted against. On the surface they said it was a question of valuation. But I think valuation is very, very subjective. They kept on saying we needed an independent financial adviser. But none of us own shares in each other, there were no related party transactions. So I think the issue of having an independent financial adviser was a red herring.

Q: With hindsight would you still stick to the same valuation?

A: Yes, We would stick to the same valuation.

Q: Will it be hard to retain the good people at GK Goh and Vickers Ballas now that the merger has broken down?

A: Contrary to what people say, we have been competing with everyone for the past 20 years and we have not lost that many people. However, it is a very mobile industry: people come, people go. The question is how do you keep people motivated and keep them loyal to you.

Q: Is the failure of the merger a perverse victory for minority shareholder rights?

A: Shareholders are more vocal these days. I think this is because after the CLOB issue and the founding of the Securities Investors Association (Singapore), the smaller shareholders have become more aware that they have a right to be heard. More people attend meetings and ask more questions. I call it shareholder democracy, which I welcome. However, in the case of our proposal to merge, it is indeed a perverse victory because I believe the merger would have been good for all shareholders.

Q: Why did Citibank abstain from voting in the Vickers Ballas shareholders meeting?

A: I cannot speak for them. They made their bed and they must now sleep in it.

Q: But isn't it strange that they approved the merger at the board level meeting and then abstained at the shareholder level?

A: Precisely. It's their corporate decision.

Q: How do you value a brokerage firm in this day and age?

A: There are no hard and fast rules in valuation. What you have to remember is that the proposal was to merge two stockbroking operations, and the key to a merger type of valuation is to use a common denominator to value both companies. In a merger of two similar operations, what is important is this concept of a common denominator in a valuation.

Q: Some commentators are saying that the merger collapsed because GK Goh and Vickers Ballas did not pay enough attention their own minority shareholders.

A: As far as I am concerned I got the approval of 99% of my shareholders who voted. The strange thing is that one of our shareholders stood up at the meeting and said: "Poland signed a treaty with Germany in 1938 and Poland then signed a treaty with Britain. But Poland got screwed. Forget about this. GK Goh has always fought for minority interests. Let's go forward. You can do this." So I delivered our shareholders vote in favour.

Q: Were you surprised that Vickers Ballas could not deliver theirs?

A: Well they have too many fragmented shareholders. Singapore Technologies owns 40%, Mr Ong and all his colleagues and friends control over 20%.

Q: With commissions deregulating in October it is going to be an interesting time being a broker in Singapore. How do you see the brokerage market here panning out?

A: There are two categories. The remisers are the retail side, and their income might be cut a bit in the first place. Everyone thinks that because of negotiated commissions their income will go down. But if you look at what happened in Australia, the US and the UK, initially commissions did go down but ultimately when the industry consolidated, the commissions went up again. I do not think that retail commissions will go down for long.

On the institutional side, in the last few years, commissions have been cut left, right and centre by everybody and we have survived it. But we have to now be able to provide the service our clients want. So the key is to keep on providing the most efficient and accurate service we can.

Q: There are a lot of rumours in the market about who is going to be your next suitor. Charles Schwab was recently mentioned as one. What can you tell me about who else is looking to merge with you?

A: There is absolutely no truth to the Charles Schwab rumours. It took me a long time to even contemplate merging with Vickers Ballas. It was not easy to go from running my business through thick and thin and then to contemplate becoming a minority shareholder. It took months for me to be persuaded. I have been so used to running this business the way I wanted. But I have seen the changes taking place. I see the necessity of size. So eventually I changed. If the right partner comes along and we can work together I am quite happy to contemplate another merger.

Q: What are the pre-deal criteria they will have to fulfill?

A: We have to see if both sides have the same vision and whether we have common ideals. In the case of Vickers Ballas it made sense. They have certain things we want and we have certain things they want. Combined we would have had a very large firm. They have Thailand, I have Malaysia; in Hong Kong, they have retail and we have wholesale. So we would have complemented each other. It also makes sense to put all your research together. The key to the whole thing is how you tap talent with one good set of people.

Q: So could a potential new merger partner come from outside Singapore?

A: That depends on whether we have the same conceptual ideas and vision for how we will expand. The foreign firms have grown big because they have learnt to build on a common vision and culture. We in Singapore have to build something big. This can be achieved either within Singapore or with a merger partner from overseas. I would, however, like to see a dedicated local house. After all, we live here.

Q: Do you think Singapore has managed to transform itself into a regional financial hub?

A: It has. But Singapore still has a very small population base. We don't have the critical mass. Nevertheless there is no doubt that we have transformed, even though I have some concerns about our cost structure in Singapore. People forget about the down side in good times. Now we have to change again to meet future challenges. Things are changing so fast, this is the key. Walking is not enough any more. We have to put on roller skates. But when you fall off roller skates it is much more painful.