Although he started his career as an accountant, Mr Loh Hoon Sun could never have foreseen that it would lead him into the dynamic world of stockbroking, where he would spend nearly 33 years with his current company.
This reality unfolds for the Senior Advisor (formerly Managing Director) of Phillip Securities, a renowned financial institution spanning 15 countries worldwide.
The 85-year-old finance expert, born in Fujian, China, shared some insights on how the path of accounting can unlock incredible opportunities and diverse career experiences. His remarkable journey serves as a testament to the boundless prospects that the field of accounting can offer.
Even though Mr Loh was born in Fujian, he moved to Penang, Malaysia at the age of 9. Mr. Loh’s journey into accounting only began during his secondary school days at Chung Ling High School in Penang, where students had two distinct course options. Despite societal pressure, he opted for the easier commerce course, which included bookkeeping and economics. This choice was motivated by his family’s financial constraints, as pursuing a university education seemed unattainable at the time.
During the final year of his course, a classmate’s unexpected offer to lend him money to study abroad opened a new chapter in Mr Loh’s life. Together, they aspired to study accounting at Perth Technical College in Perth, Western Australia. However, as fate would have it, an unforeseen medical condition prevented his classmate from joining him, leaving Mr Loh to embark on this journey alone.
At that point, the allure of studying abroad had nearly faded. But the unwavering support of his parents rekindled his aspirations. “Since you have already managed to get into the college,” they encouraged him, “we will save hard, so just go.” Mr Loh fondly recalls their determination.
Undeterred by the challenges of living abroad, Mr Loh embraced frugality, even walking to college instead of taking the bus to save money. He quickly realized that even this seemingly cost-effective mode of transportation had its expenses.
“I soon discovered that walking to college was not that cheap as I thought,” Mr Loh chuckled, “because it wore out my shoes faster than expected.”
Driven by the desire for a better future, he moved his education from a college in Perth to an University in Brisbane after one year in Perth, earning a Bachelor of Economics with first-class honors, from the University of Queensland.
Appreciation for Accounting
When asked about his appreciation for accounting, Mr Loh highlighted the critical role it plays in every business. He emphasized the importance of ensuring that accounts are correct and properly recorded. Accounting, he noted, is instrumental in showing the cash flow of a business. Without accurate accounting, a company might find itself unable to pay suppliers, leading to financial instability.
Back in 1969, while working for a Malaysian company, Mr Loh encountered a unique challenge. The company owned timber logging and iron ore mining businesses, as well as a major stake in a stockbroking firm. However, for two years after starting business, the stockbroking company had not produced any financial statements.
His boss asked him to go to the stockbroking firm to help. He went there and moved out in 6 months, after helping to produce the first set of audited accounts, making everybody happy: staff, management, directors, shareholders, auditors, income tax department and the stock exchange.
This lack of financial transparency made it challenging to assess the company’s performance, leading to incorrect business decisions and the constant need for capital from shareholders.
Mr Loh’s perspective highlights the significance of accounting in guiding sound business decisions and maintaining financial health. His deep appreciation for this essential function is evident in his commitment to the field throughout his career. It was also the bull market of those times that convinced him that stockbroking was a challenging yet highly profitable business. This realization, coupled with his growing expertise in accounting, set the stage for his remarkable journey in the financial world.
The Big Switch to Stockbroking
When Mr Loh transitioned from United Overseas Bank (UOB) to the then Overseas Union Bank (OUB), a significant financial development was underway in Singapore: the formation of the Gold Exchange of Singapore. That was the predecessor of Singapore International Monetary Exchange (SIMEX), which was merged with Stock Exchange of Singapore (SES) in 1999 to form the Singapore Exchange (SGX).
At that time, Singapore boasted four major local banks. All these banks except for OUB, was a shareholder of the Gold Exchange of Singapore.
Curious about OUB’s absence, Mr Loh inquired with his boss. He learned that the person responsible for physical gold business, considered gold futures excessively risky for the bank. However, the boss offered Mr Loh an intriguing opportunity – “if you are interested, you can take over.” Mr Loh rose to the challenge. He later served a term as Chairman of the Gold Exchange of Singapore.
Subsequently, they transferred the responsibility for gold trading from Treasury to Mr Loh, resulting in the creation of OUB Bullion and Futures with Mr Loh as Chairman. This marked a transformative shift for Mr Loh, propelling him from the realm of backend accounting to the front lines of the business world, a role he embraced for 12 years.
Amid these changes, the year 1985 brought about the Pan-Electric crisis. Several stockbroking firms in Singapore faced closure due to their involvement in forward contracts, ultimately leading to the collapse of Pan-Electric Industries and an unprecedented three-day shutdown of the Singapore and Kuala Lumpur stock markets.
In response, the Monetary Authority of Singapore (MAS) granted each of the four major local banks a stockbroking license. Interestingly, the usual practice in OUB was to appoint the Bank’s Chairman, as the chairman and Managing Director to the board for any new subsidiary company. However, due to the perceived riskiness associated with this venture, they deviated from this norm.
This divergence in approach ultimately led to Mr Loh assuming the role of chairman by default for OUB Securities and was entrusted with the task of establishing OUB Securities from the ground up. The venture proved very profitable.
As the success of OUB Securities has solidified, Mr Loh expressed his desire to transition full-time into stockbroking due to its intriguing and lucrative nature. However, his boss insisted, “No, you look after stockbroking, but you stay in the bank.”
Recognizing the potential for further growth in stockbroking business, Mr Loh started to look for outside opportunities. He was ultimately hired by Phillip Securities, after spending 14 years in OUB, where he was offered the newly created position of managing director. This role allowed him to fully immerse himself in the world of stockbroking. Even after stepping down as managing director 7 years ago, Mr Loh’s dedication to the stockbroking industry and his unwavering focus on client service have persisted till today, serving as a testament to his enduring commitment to the field.
A Message to Future Accountants
Mr Loh’s message for aspiring accountants is crystal clear:
“Strive to be technically capable and ensure you have a deep understanding of all the requirements.”
While external auditors may handle income tax returns, it is essential to be familiar with the intricacies of income tax regulations. The goal is not to avoid taxes but to minimize them responsibly, enabling effective financial planning and avoiding unnecessary tax burdens.
In Depth with Mr. Loh – Key Takeaways
Question: What would you like to tell the younger generation?
Mr Loh Hoon Sun leaves us with the first profound perspective:
“Things change, things happen. When things happen, no matter what area you are in, what implications are there? You have to think of what implications are there for you, or your work, your company, your family.”
As an example of this principle in action, during his tenure at OUB, Mr Loh had a unique experience with one of the foreign banks. He maintained a close relationship with the bank due to his proficiency in Mandarin. One morning, he read a news article about a bank run at the particular foreign bank branch. This kind of situation required the bank to have enough cash on hand to meet the sudden surge in withdrawals. However, banks typically don’t keep large amounts of cash due to its inefficiency with no income.
Mr Loh expected the foreign bank to approach OUB for assistance as the two banks were very close in relationship and Mr Loh was the point of contact. After reaching his office, he informed his boss and posed two crucial questions: Could OUB lend to this foreign bank and if so, how much? Given the unsecured nature of the lending, his position at that time did not permit such decisions. However, his boss after consulting the Chairman, reverted to inform Mr Loh that the answer was affirmative – any amount could be lent. Mr Loh then had the mandate to lend in this particular case.
Within an hour, this foreign bank country general manager contacted Mr Loh, requesting to borrow $4 million in cash notes with immediate collection, to address the situation. Mr Loh promptly agreed to the request, facilitating the necessary assistance. This act of support strengthened the perception of his authority, even though, in reality, he could not approve a loan of even $1. This case was due to his usual practice of reading the newspapers early in the morning before he left home for the office, his anticipation of need and his preparedness in obtaining proper prior approval.
This example underscores Mr Loh’s advice to young professionals: When unexpected situations arise, consider the implications for your job and act promptly to pre-empt potential problems.
Another incident taught Mr Loh a valuable lesson:
“What everyone is doing is not necessarily correct.”
Mr Loh’s wisdom extends beyond finance and business. He humorously illustrates the principle that what everyone is doing is not necessarily correct with an anecdote.
His son was a student studying Accountancy at NTU. Mr Loh drove him back to his hostel on a Sunday evening as usual, and was returning home along PIE, but was pulled over by the police for speeding. In response, he remarked that everyone else was speeding too. “If the car in front of me did not speed, I could not speed either.” The police officer smiled and said, “I can only catch one at a time.”
Mr. Loh reminded that in both life and accounting, it is essential to critically assess situations and not assume that popular behaviour equates to correctness. His career is marked by his ability to navigate the business world with a discerning eye, making decisions based on careful consideration rather than mere conformity.
Question: If given a chance to start over, would you choose to study accounting and make the same career choices again?
“I would still choose accounting. I would make the same choices all over again.”
He explains that his journey has taken him through different companies in different industries with different nationalities of management, Australian, British, Malaysian, American and Singaporean. Each of these experiences exposed him to different business cultures and management styles, providing invaluable insights into diverse approaches:
These varied experiences have allowed Mr Loh to immerse himself in different cultures and management philosophies, enriching his understanding of the business world. This diverse perspective has proven to be a valuable asset in his career.
Concluding this interview with Mr Loh Hoon Sun, accounting is more than just numbers; it is a testament to the incredible possibilities that open up when one chooses the path of accounting and embraces the challenges along the way.