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18-10-2024, 02:35 PM
https://www.straitstimes.com/business/qu...ncome-saga
Mr Leong had asked about when NTUC’s leaders were briefed on the offer. “If the NTUC central committee did not know the full details, then why did NE (NTUC Enterprise) and Income not brief them on the full details of the transaction?”
Mr Thomas pointed out that NTUC’s secretary-general Ng Chee Meng and president K. Thanaletchimi had issued a statement on Aug 5 that Income can continue to fulfil its social mission only if it has access to additional resources and the ability to scale.
“Did Income brief the NTUC leadership of the proposed initiative to reduce share capital?” he asked.
Singapore Management University’s Associate Professor Eugene Tan told ST that “it boggles the mind that NTUC’s central committee did not know of the capital reduction”.
He noted that NTUC’s Mr Ng Chee Meng also sits on NTUC Enterprise’s board.
“Serious questions must be asked on why this vital part of the proposed deal was not prominently surfaced by NTUC Enterprise to Income’s board and shareholders, as well as the authorities,” Prof Tan said.
Questions were also raised about how those involved in the decision-making process might be held accountable for how the proposed deal did not match up to earlier assurances made by Income.
During Income’s corporatisation in 2022, it had obtained an exemption from the Ministry of Culture, Community and Youth (MCCY), which oversees the governance of co-ops, to carry over a surplus of $2 billion to the new entity.
Then, Income also told MCCY that it was aiming to build up capital resources and enhance its financial strength.
Mr Thomas asked in Parliament if the Government would be taking steps to ascertain how Income could “negotiate, agree and attempt” to execute a deal with Allianz that was the “opposite” of Income’s representations to MCCY.
He noted that the chairman and chief executive of Income at the time of corporatisation and announcement of the proposed deal with Allianz were the same people.
“How involved were they and the senior management of Income in, on the one hand, making representations to MCCY, and, on the other, arranging the deal with Allianz? Did they not see the contradictions?” Mr Thomas said.
Mr Leong also outlined concerns in Parliament over what NTUC leaders had represented to the public about the deal, when there appeared to be a lack of safeguards on the ability of Income to carry out its social mission.
“The leaders of NTUC, NE and Income owe the public a more substantial explanation on this,” he said.
Prof Tan said that a thorough explanation of how things went wrong is warranted. “Otherwise, the next proposed merger or acquisition is going to have stakeholders be wary from the get-go.”
He also raised doubts about Income’s financial adviser Morgan Stanley. “Did they not see the capital reduction as raising serious questions about Income’s corporatisation and its social mission?”
Income’s chairman Ronald Ong is also chairman of Morgan Stanley’s South-east Asia business. Income said in July that he had recused himself from the decision when Morgan Stanley was appointed as the financial adviser for the deal.
To this end, he suggested that “a new Singaporean-controlled board of directors with real talent, real experience and a real vision” could be put in place.
They could then be tasked with developing a “coherent five-to-seven-year plan to make Income Insurance a world-class company operating profitably not only in Singapore but also in other countries in Asia ex-Japan”, he said.
Mr Leong had asked about when NTUC’s leaders were briefed on the offer. “If the NTUC central committee did not know the full details, then why did NE (NTUC Enterprise) and Income not brief them on the full details of the transaction?”
Mr Thomas pointed out that NTUC’s secretary-general Ng Chee Meng and president K. Thanaletchimi had issued a statement on Aug 5 that Income can continue to fulfil its social mission only if it has access to additional resources and the ability to scale.
“Did Income brief the NTUC leadership of the proposed initiative to reduce share capital?” he asked.
Singapore Management University’s Associate Professor Eugene Tan told ST that “it boggles the mind that NTUC’s central committee did not know of the capital reduction”.
He noted that NTUC’s Mr Ng Chee Meng also sits on NTUC Enterprise’s board.
“Serious questions must be asked on why this vital part of the proposed deal was not prominently surfaced by NTUC Enterprise to Income’s board and shareholders, as well as the authorities,” Prof Tan said.
Questions were also raised about how those involved in the decision-making process might be held accountable for how the proposed deal did not match up to earlier assurances made by Income.
During Income’s corporatisation in 2022, it had obtained an exemption from the Ministry of Culture, Community and Youth (MCCY), which oversees the governance of co-ops, to carry over a surplus of $2 billion to the new entity.
Then, Income also told MCCY that it was aiming to build up capital resources and enhance its financial strength.
Mr Thomas asked in Parliament if the Government would be taking steps to ascertain how Income could “negotiate, agree and attempt” to execute a deal with Allianz that was the “opposite” of Income’s representations to MCCY.
He noted that the chairman and chief executive of Income at the time of corporatisation and announcement of the proposed deal with Allianz were the same people.
“How involved were they and the senior management of Income in, on the one hand, making representations to MCCY, and, on the other, arranging the deal with Allianz? Did they not see the contradictions?” Mr Thomas said.
Mr Leong also outlined concerns in Parliament over what NTUC leaders had represented to the public about the deal, when there appeared to be a lack of safeguards on the ability of Income to carry out its social mission.
“The leaders of NTUC, NE and Income owe the public a more substantial explanation on this,” he said.
Prof Tan said that a thorough explanation of how things went wrong is warranted. “Otherwise, the next proposed merger or acquisition is going to have stakeholders be wary from the get-go.”
He also raised doubts about Income’s financial adviser Morgan Stanley. “Did they not see the capital reduction as raising serious questions about Income’s corporatisation and its social mission?”
Income’s chairman Ronald Ong is also chairman of Morgan Stanley’s South-east Asia business. Income said in July that he had recused himself from the decision when Morgan Stanley was appointed as the financial adviser for the deal.
To this end, he suggested that “a new Singaporean-controlled board of directors with real talent, real experience and a real vision” could be put in place.
They could then be tasked with developing a “coherent five-to-seven-year plan to make Income Insurance a world-class company operating profitably not only in Singapore but also in other countries in Asia ex-Japan”, he said.
