Beyond Three Generations – The Yeo Family – The Cracks Form

May 18
3 min read

The troubles in the Yeo family start to brew.

In our previous instalment of Beyond Three Generations, we left off with a growing Yeo Hiap Seng being passed on to the third generation – Yeo Thian In’s son, Alan Yeo. The business was owned by the family and had recently incorporated to ensure that the Yeo Family would have control for the foreseeable future.

Where would it go next?

The rumblings begin

After listing, the period from 1969 to 1987 continued the raging success of Yeo Hiap Seng. Alan Yeo, the third of our three generations, was able to take the net asset value of YHS from $8.2m in 1969 to $214m in 1993. Operations expanded in Singapore, Malaysia, Hong Kong, North America and China, and in 1987, Alan was named Singapore’s businessman of the year in recognition of this rapid growth. His success was due to his aggressive ambition for the company, and the growth he achieved was a shining star for Singapore business in the region.

However, cracks were beginning to form within the family. As the family got larger and more diffused (with 6 families and about 50 members), the once close-knit Yeo family started to fracture.

This came from a number of sources:

Alan’s success being named businessman of the year was met with resentment in the family. Certain members claimed that the family business was always a joint effort – not just Alan who was individually steering the company. These rumblings were ignored by Alan at the time, but these rumblings grew louder when his father, Thian In, died in 1985. They felt emboldened to speak out about Alan’s leadership style and management woes, and factions for and against Alan started to form.
Bad investments by the company, including a joint investment with Temasek in an American company Chun King that suffered large losses (~$52m), a high-tech prawn farming venture that failed (~$10m), and a fruit-processing plant that lost millions (~$7m), meant that these accusations were not completely unfounded.
Majority votes, rather than a unified voice: With no defined family constitution or way to manage conflict, decisions started to be made by majority vote within the holding company, rather than together, as a family. This meant that within the majority in the holding company would control the shares for Yeo Hiap Seng, and Alan’s minority faction would have much less power.
Positions given, not earnt: Insiders within the company reported that the Yeo family was resting on its laurels. A majority of the directors were past retirement age (having been with the company for many years) and many of the younger Yeo’s were being promoted to positions without having done their service and proved themselves within the business. The previous trust-based intuitive decision making from five brothers had now become sorely in need of structure and discipline, which was not brought in fast enough. Alan doubled down on his own plans, hoping his ambitious plays would help lead them out of this mess, and started to sideline Yeo family members in the business who spoke up against his decisions.

One faction in the family, led by Charles Yeo (Alan’s nephew), started to lead the charge against Alan over his mismanagement of these losses, his autocratic style of leadership, and his stubbornness about the direction of the company. This would soon become the turning point for the fate of Yeo Hiap Seng.

At the same time, YHS’s 8 acres of Bukit Timah land had been rezoned, allowing for property development, making it an extremely valuable opportunity to exploit. In our next instalment, we’ll see how this very valuable post-war purchase became a key point of contention between the Yeo family factions and ultimately led to its splintering.

Disclaimer: General information only – none of the above constitutes legal, financial, immigration or tax advice. Please speak to a licensed professional to assess your specific circumstances.

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