The crisis in the US subprime mortgage sector have claimed another victim, this time it's close to home. Singapore's DBS Group Chief Executive Officer Jackson Tai will step down for "family reasons".
Of course no one is buying that. The outgoing CEO left after a string of bad news has hit DBS shares including last month surprise when DBS told investors saying that its exposure to risky debt obligations was nearly double what it had initially declared. Also DBS had failed to raise its 16 percent stake in Thailand's TMB Bank earlier that month.
DBS said that it had started an "extensive global search" for his replacement with DBS chairman Koh Boon Hwee being the caretaker until the successor has been found.
Now usually I don't feel that sorry for upper management people who play musical chairs with their positions, but it's hard not to fell sorry for Tai. Okay, he overpaid for Hong Kong's Dao Heng Bank, but he wasn't kicked for that! He was kicked for DBS risky debt situation, which he can't really control. When the biggest US mortgage lender, Countrywide Financial, facing bankruptcy due to the same crisis, it's kind of hard to blame Tai for it. The drying up of credit and the explosion of bad debts due to the credit crisis in the U.S has hit almost every bank that operate in America (even some that don't)!
More a case of bad timing, I'm afraid. If it's not...that makes me wonder just how bad is DBS debt position.