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MAS asserts no conflict of interest in appointment of Morgan Stanley as financial advisor in Allianz deal

Second Minister for Finance Chee Hong Tat confirmed MAS reviewed and approved Morgan Stanley’s appointment as advisor for the Allianz-Income deal, as the chairman recused himself from the decision.

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The Monetary Authority of Singapore (MAS) has assured itself that there is no conflict of interest in the appointment of Morgan Stanley as the financial advisor for the sale of a majority stake in Income Insurance to Allianz.

This was said by the Second Minister for Finance and Deputy Chairman of MAS, Mr Chee Hong Tat, on Tuesday in response to parliamentary questions regarding the deal.

According to Income’s statement on 17 July, Morgan Stanley was named the exclusive financial advisor to Income Insurance on the purchase offer by Allianz Europe of 51% of Income’s shares for approximately US$1.6 billion. The offer includes S$40.58 per share, resulting in a transaction value of S$2.2 billion (US$1.64 billion) for 51 percent of the shares in Income Insurance.

NTUC Enterprise, currently holding a 72.8 percent stake in Income, will remain a substantial shareholder if the sale is finalized but will no longer be the majority shareholder.

The proposed sale of Income Insurance to German multinational financial services company Allianz has sparked significant public discontent and raised serious questions about corporate governance within the organization.

Industry experts and concerned citizens have voiced worries about potential conflicts of interest and the future of the homegrown insurance company.

Mr Chee addressed the MPs’ concerns, stated, “MAS has reviewed and was satisfied with the relevant processes Income’s board had put in place to address conflicts of interest. With respect to the appointment of his financial adviser on this proposed deal and the decision to enter into the deal with Allianz, the chairman of Income’s board had recused himself.” He further added, “The decision to enter into the deal was made by the board, comprising a majority of independent directors.”

Corporate Governance Questions

Morgan Stanley’s role as the exclusive financial advisor for the transaction was put under scrutiny due to the involvement of Mr Ronald Ong, the Chairman of Income Insurance Limited, who also holds a high-ranking position at Morgan Stanley.

Mr Ronald Ong has been with Morgan Stanley for over 20 years and currently serves as the Chairman and CEO for Southeast Asia. His dual roles have prompted questions about the integrity of the decision-making process behind the appointment of Morgan Stanley as the financial advisor.

Mr Ong was co-opted to the Board of NTUC Income Insurance Co-operative Limited on 23 August 2018 and later elected as a non-independent non-executive director on 24 May 2019.

Since 1 August 2022, he has been the Chairman of the Board and Board Executive Committee of Income Insurance Limited. Additionally, he serves as a Board Member of NTUC Enterprise Co-operative Limited, the majority owner of Income Insurance.

Concerns about potential conflicts of interest were highlighted by authoritative voices in corporate governance.

Professor Mak Yuen Teen, a corporate governance expert and former Vice Dean of the NUS Business School, expressed his astonishment on LinkedIn. “So his firm is the financial advisor, and he’s chairman of Income and chair of its exco, and director of Enterprise. I certainly hope he’s not involved in the decision to appoint MS [Morgan Stanley] as financial advisor as MAS CG guidelines for FIs state that directors should recuse if they have a conflict of interest,” he wrote.

Retired banker Chris Kuan also voiced his concerns on Facebook, highlighting the potential conflict of interest involving Mr Ong and other key figures in NTUC Enterprise.

Kuan stated, “Thanks to a Biz Times, we now know that Income’s chairman is on the board of NTUC Enterprise, the majority owner who sold to Allianz. Income’s deputy chairman is NTUC Enterprises’ CEO. NTUC Enterprises’ best interest may not be in the best interest of Income, having these executives from NTUC Enterprises in key decision-making positions of Income in the event of a sale is a clear conflict of interest and can only be resolved if the two of them recuse themselves from the decision to sell 51% of Income.”

Kuan elaborated on the complexities of the situation, drawing parallels with past instances of conflicts of interest in the financial sector. He emphasized the need for transparency and proper governance to maintain the integrity of the financial market in Singapore.

 

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Parliament

NParks investigates 1,200 animal cruelty and welfare cases annually, majority involving dogs and cats

From 2019 to 2023, NParks investigated an average of 1,200 animal cruelty and welfare cases annually, mostly involving dogs and cats. About 50 cases each year led to enforcement actions. Many cases, lacking evidence, were linked to disputes or unrelated incidents.

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Maid probed over alleged fatal abuse of employer’s dog earlier in Feb 2024

In a parliamentary question, Workers’ Party Member of Parliament for Sengkang GRC, Ms He Ting Ru, raised concerns about animal cruelty and welfare cases in Singapore, seeking detailed data from the Ministry for National Development.

She inquired about the number of cases investigated and enforcement actions taken over the last five years, along with a breakdown by types of offences and animals involved.

In a written reply, Minister for National Development, Mr Desmond Lee, provided the data, revealing that the National Parks Board (NParks) investigated an average of 1,200 animal cruelty and welfare cases each year between 2019 and 2023.

The majority of these cases involved dogs and cats. Mr Lee noted that of these investigations, an average of 50 cases annually resulted in enforcement actions, such as issuing warning letters, composition fines, or court prosecutions.

However, a significant number of cases did not lead to enforcement action. Mr Lee explained that this was often due to a lack of evidence or the cases being unrelated to cruelty and welfare.

Commonly, these involved disputes or nuisances caused by pets or community animals, or incidents like accidental falls from heights leading to the deaths of community animals.

*Enforcement action refers to the issuance of a warning letter, a composition fine, or to court prosecution. Investigations for some cases are ongoing and have not been included in the count.

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Parliament

PAP MPs attack WP Gerald Giam in Parliament over NTUC independence from ruling party

During the Platform Workers Bill debate on Monday (9 Sept), PAP MPs clashed with Gerald Giam, MP for Aljunied GRC, over his call for the NTUC to maintain independence from the PAP. Giam argued that the NTUC’s current symbiotic relationship with the ruling party undermines its effectiveness. PAP MP Christopher de Souza interrupted, accusing Giam of diverting focus from the Bill to attack the NTUC.

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SINGAPORE: Ministers and Members of Parliament (MPs) from the ruling People’s Action Party (PAP) clashed with Mr Gerald Giam, MP for Aljunied GRC from the Workers’ Party (WP), over his criticism of the National Trades Union Congress (NTUC) and its close relationship with the PAP.

During the debate on the Platform Workers Bill, Mr. Giam argued that NTUC should be independent rather than maintaining its current symbiotic relationship with the PAP.

Midway through Mr Giam’s speech, PAP MP Christopher de Souza from Holland–Bukit Timah GRC interrupted, accusing him of using the debate to attack NTUC rather than focusing on the Bill.

Leader of the House Indranee Rajah also contributed to the debate, noting that close ties between unions and political parties are common in democracies worldwide, such as in the UK, US, and Canada.

She pointed out that Mr Giam’s call for union independence from political parties is inconsistent with practices in other democracies.

In response, Mr Giam acknowledged the global context but argued that while UK unions may support the Labour Party, they do not have the same level of symbiotic relationship with their political parties as NTUC does with the PAP in Singapore.

He emphasised that the WP supports a tripartite dialogue among employers, unions, and the government but not with any specific political party.

Mr Giam highlighted the need for unions to be independent and nonpartisan to better represent workers’ interests.

Meanwhile, Speaker Seah Kian Peng emphasised the importance of sticking to the relevance of the topic being debated, as per Standing Order Section 50.

Pritam Singh, Leader of Opposition also weighed in, noting that political remarks should be consistently applied and citing a previous instance where Mr. de Souza spoke on leadership transitions during a budget debate. Singh argued that PAP members should reflect on their own practices.

“I think the salutary message you provided at the end is important because it cannot be just accusations made at the opposition, but I think some PAP members ought to reflect on themselves, ” said Mr Singh.

In response, Mr De Souza justifying his earlier speech on leadership transitions by arguing that strong leadership is crucial for effective governance, including budgetary matters.

He insisted that his speech was relevant to the budget debate, in contrast to what he perceived as Mr Giam’s irrelevant critique of NTUC.

Senior Minister of State for Defence Mr. Heng Chee How joined the debate, defending NTUC’s relationship with the PAP.

He argued that this alignment benefits workers by effectively communicating their needs and prioritizing their interests.

Heng highlighted the PAP’s track record in delivering results for Singapore and its workers. He asserted that the PAP’s long-standing governance has consistently prioritized workers’ needs and has not compromised their interests.

Heng criticised some recommendations made by Gerald Giam, suggesting that they could potentially undermine the effectiveness of tripartite partnerships.

He warned that such recommendations could lead to ineffective agreements and hinder progress for workers.

In response, Mr Giam acknowledged the hard work of unionists but critiqued systemic constraints on union independence.

He argued that his proposals for greater union independence aim to empower workers’ representatives to advocate more effectively for their interests.

Giam addressed criticisms that his initial remarks were irrelevant by explaining they set the stage for his main policy points.

“I believe that my proposals for union independence are meant to empower unionists and platform associations leaders to act freely in the best interests of their workers.”

Later, Giam posed a thought-provoking question: “Can I assume that … if the PAP were to ever lose power, the NTUC would therefore become an instrument of opposition against the new government?”

Indranee responded that she could not speak for NTUC but emphasized that it would be up to NTUC and its workers to decide which political party, if any, they support.

“What I can say is that the PAP would do its very utmost not to have to give them a reason to think that we would never support them, or that as a government, we would not do our very best for the workers and the trade union congress.”

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