SINGAPORE: Monetary Authority of Singapore (MAS) deputy chairman Chee Hong Tat on Wednesday (Oct 16) accused opposition lawmakers Associate Professor Jamus Lim and Mr Leong Mun Wai of wanting to “throw our public officers under the bus” in their criticism of how the blocked Income-Allianz deal was handled.
Mr Chee, who is also transport minister and second minister for finance, then asked the Workers’ Party’s Assoc Prof Lim and Progress Singapore Party’s Mr Leong to retract remarks they made during a parliamentary debate on a legislative amendment that targets the proposed deal.
On Monday, the government intervened to stop German insurer Allianz from acquiring Income Insurance after MAS provided the Ministry of Culture, Community and Youth (MCCY) with information about a S$1.85 billion capital extraction envisioned by parties involved in the deal.
When Income was corporatised in 2022, it was exempted from Section 88 of the Co-operative Societies Act, which allowed it to carry over about S$2 billion in surplus to the new corporate entity.
The proposed capital reduction therefore “runs counter” to the premise for why this exemption was given, Minister for Culture, Community and Youth Edwin Tong previously said.
In his speech in parliament on Wednesday, Assoc Prof Lim said the episode was a “communication breakdown that may reveal some troubling pathologies with how the government conveys information within itself and with the public”.
He questioned whether regulators in MAS could have completed a “holistic assessment” of the acquisition in the “brief period” they had from mid-July, and why they did not make the link between the proposed deal and the Section 88 exemption earlier.
“I wonder if it’s only me who finds it troubling that there was no coordinate discussion between the two major relevant regulators, MAS and MCCY, in advance of the proposed deal,” he said.
Assoc Prof Lim also questioned whether the civil service was “sufficiently siloed … that even for transactions of such prominence, no joint working group was convened to ensure sufficient information exchange in advance”.
Mr Leong echoed this: “The public has been left with the impression that our government agencies are siloed, and coordination within the government is poor.
“Or to put it simply, the left hand does not know what the right hand is doing.”
He said that the capital reduction exercise in the proposed deal “should have raised alarm bells in MAS”.
“While we trust that MAS officers are highly professional and have conducted a thorough review of the deal from a prudential point of view, can the minister further explain why MAS does not have any further prudential concerns over the capital reduction plan, especially considering NTUC Enterprise’s history of having to inject capital into Income over the years?”
He also described the Income-Allianz deal as “an asset-stripping exercise in favour of the shareholders, especially NTUC Enterprise and Allianz”.
NTUC Enterprise is Income’s major shareholder.
In his closing speech before the amendment was passed, Mr Chee said Assoc Prof Lim and Mr Leong had made “serious allegations” about public officers and agencies.
“Why is it necessary for Mr Leong and for Associate Professor Lim to still want to throw our public officers under the bus?” he asked.
He said that MAS officers were not aware of the conditions and undertakings around Income’s Section 88 exemption, and that it was only when the regulators had a “fuller understanding” of the issues after an Aug 6 parliamentary debate on the proposed deal that they saw there could be a connection.
He said he hoped the two opposition lawmakers could give MAS officers “some credit”.
“They were not trying to do something wrong, or as Professor Lim mentioned, to lead to multiple breakdowns of communications or to work in a siloed manner,” said the minister.
“There’s certainly not what they were trying to do. They were trying their very best to do their work. And when they saw that there was a link, they shared the information.”
During clarifications, Assoc Prof Lim said he had “deep respect” for civil servants.
“But I feel that it’s nevertheless imperative for me to highlight instances where the system that the civil service operates under – which is, to be clear, overseen by this government – is problematic.
“Because our civil servants can only do the best they can within the constraints that they face from the government of the day.”
Mr Chee then asked him to withdraw his “unfounded allegations about the public service officers in our system facing constraints from the government of the day when it comes to sharing of information”.
Mr Chee also took issue with Mr Leong’s characterisation of the proposed deal as “asset-stripping”, saying this was not a fair description.
“I think Mr Leong deliberately chose that term. And this is not the first time I’ve heard Mr Leong make unkind remarks towards NTUC,” he said.
He added that Income entered the deal with “the right intent” and “acted on good faith” to strengthen Income’s financial position.
During clarifications, Mr Leong doubled down on the term “asset-stripping”, saying: “Nobody with some knowledge about finance would disagree with me. It’s a fact. It has nothing to do with the intent.
“You can intend, your intentions can be good. But the plan that you put up is actually not so good, you can even say detrimental.”
He also described the earlier Aug 6 parliamentary debate on the Income-Allianz deal as “quite a waste of time” as they were discussing the matter “without complete information”.
Later, Mr Chee also asked Mr Leong to withdraw this “waste of time” comment, saying he was “dismayed” by it.
“I think (the Aug 6 debate) provided the opportunity for members to ask questions and for MCCY and MAS to clarify what is the status of the situation at that time, and then to hear the concerns of the members,” said the minister.
He also said that it was only right for political office-holders to reply to questions based on information they had at that point in time, and stressed that there was no regulatory approval or decision by the government on the proposed deal at the time of the Aug 6 session.
Countering the “asset-stripping” description again, Mr Chee also said that capital reduction was not uncommon, and that financial optimisation was something companies did regularly.
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