Tony Tan was party to the much talked about "slapping incident", publicly aired for the first time in Goh Chok Tong's 2003 National Day Speech, and documented on page 150 of Ross Worthington's book "Governance in Singapore", Publisher: Taylor & Francis, Inc, Dec 2002:
"A major issue that has shaped bureaucratic/ministerial relationships for much of the past 10 years is the place and power of Lee Hsien Loong within the ministry and his possible future. While Lee has many supporters, he has also alienated many because of what is seen as his arrogance and the autonomy he demonstrates in his relationship with other cabinet ministers; characteristics which, seven years after he joined the cabinet under Goh's sponsorship, he had not curbed. One significant example of this was consistently reported by several respondents.
In 1990, an incident occurred in a pre-cabinet meeting which was the beginning of entrenching further among the many in the core executive, resistance to Lee Hsien Loong's long term ambitions for prime ministership.
Prior to this meeting Lee Hsien Loong had gone to the office of Richard Hu, the Minister of Finance, and removed a number of files without Hu's permission. At that time Lee's office was on the 48th floor of what is now Temasek Tower and Hu's was on the 50th floor. At the pre-cabinet meeting Hu took Lee to task for doing this and was supported by Tony Tan.
Lee's response was aggressive and insulting, he directly insulted Tan and Hu, a man of his father's age. This was a double insult to Hu, who was Lee's superior in cabinet and a person of an age who should of itself deserve respect in Chinese society.
Suppiah Dhanabalan intervened and chastised Lee for his behaviour, demanding that he apologise to Hu, withdraw his remarks and not interfere in other minister's portfolios. A heated exchange occurred into which a number of other issues intruded and eventually Lee lost his temper, and reportedly reached across the table and slapped Dhanabalan across the face. This caused an uproar in the cabinet and Lee was severely chastised by Goh Chok Tong. Dhanabalan stormed out of the room and did not return for some time. Lee, in response to a demand from Goh, subsequently apologised to Dhanabalan, Hu and Tan.
Hu, Dhanabalan and Tan all initially stated that they would leave the cabinet as a result of this incident. Goh later took up the matter with Lee Kuan Yew who reportedly verbally thrashed his son over the matter. This was apparently followed by a more sober, educational but equally critical assessment from Lee Hsien Loong's mother, a talented though background political adviser. Lee Kuan Yew reportedly met later that day with Hu, Tan and Dhanabalan apologised for his son's behaviour and requested that they not resign, supported by a similar request from Goh Chok Tong.
All held out for some time, but eventually Hu agreed to stay, but Dhanabalan and Tan both resolved to leave. This they did the following August 1991 elections, all without a public word against Lee Hsien Loong, continuing to subscribe to the tenet of all secrets staying within the PAP family."
Tony Tan was Lee Kuan Yew's first choice to be his successor. After his resignation, he returned to banking to run the Overseas Chinese Banking Corporation.
In 1992, Lee Hsien Loong was diagnosed with lymphoma, but was pronounced cured after two years of treatment. B.G. Lee told reporters that when he fell ill, it is claimed he advised Goh Chok Tong to bring in Tony Tan to strengthen the cabinet. On June 28, 1995 Goh announced that the PAP's 55-year-old chairman, Tony Tan, would become a Deputy Prime Minister and Defense Minister.