Non-Constituency Member of Parliament (NCMP) Leong Mun Wai expressed his surprise and concern following the government’s intervention to block the proposed acquisition of NTUC Income’s majority shares by German insurer Allianz.

The deal, announced on 17 July 2024, would have allowed Allianz to acquire a 51% majority stake in the Singapore-based insurer.

However, concerns about NTUC Income’s ability to uphold its social mission triggered a public outcry, with prominent voices speaking out against the transaction.

In his 14 October 2024 statement to Parliament, Edwin Tong, Singapore’s Minister for Culture, Community, and Youth, explained that the government found the deal “not in the public interest.”

The Ministry of Culture, Community, and Youth (MCCY) had specific concerns regarding its impact on NTUC Income and the broader cooperative movement in Singapore.

One of MCCY’s primary issues was the capital reduction proposed in the transaction, which contradicted earlier representations made during NTUC Income’s 2022 corporatisation.

Minister Tong noted that when NTUC Income transitioned from a co-op to a corporate entity, it carried over S$2 billion in surplus with the understanding that it would bolster its financial strength.

The proposed capital extraction contradicted this objective, casting doubt on NTUC Income’s long-term ability to fulfil its social role.

“If not for the ministerial exemption in 2023, NTUC Income’s accumulated surplus of some S$2 billion would have gone to the Co-operative Societies Liquidation Account (CSLA) to benefit Singapore’s co-op movement,” said Tong, adding that MCCY saw no concrete plans to safeguard this sum for social purposes in the current deal.

NCMP Leong voiced his shock over the disclosure of the capital extraction plan, a key aspect of the deal that had not been made public.

The Progress Singapore Party NCMP called for greater transparency in financial transactions, saying, “This information should be available to all Singaporeans.”

He added, “For months, we believed the provided information was complete, only to discover the capital extraction plan now. This is a crucial condition in any financial deal, and it was not disclosed to the public when we discussed the deal.”

Mr Leong pressed for accountability, asking who was responsible for withholding this critical information and whether the government would take steps to address the oversight.

He stressed the importance of transparency, particularly in transactions involving organisations with social missions, like NTUC Income.

Mr. Chee Hong Tat, Second Minister for Finance and Deputy Chairman of the Monetary Authority of Singapore (MAS) Board of Directors, emphasised that the proposed capital reduction was initiated by Allianz and had yet to receive approval from MAS.

He noted that it is standard practice for regulators to evaluate all aspects of a proposal before reaching a conclusion.

Mr. Chee reassured Parliament that discussions and concerns regarding the capital reduction had been communicated transparently. He referenced Minister Tong’s earlier speech, which outlined the key considerations behind the government’s concerns, particularly regarding the potential impact on NTUC Income’s social mission.

In response to Mr. Leong, Minister Tong urged him not to mischaracterise the situation and reiterated that the government had been transparent in its assessment of the transaction.

Government’s Response and Minister Tong’s Position

Minister Tong said the government’s decision to block the transaction was unrelated to Allianz’s standing as a buyer but focused on the structure of the deal.

The government was concerned about the lack of safeguards ensuring that NTUC Income could continue fulfilling its social mission. While NTUC Enterprise had committed to maintaining this mission, the MCCY remained unconvinced that such commitments were backed by legally binding provisions.

Minister Tong also revealed that after the transaction, NTUC Enterprise would have become a minority shareholder, with limited influence on NTUC Income’s future direction, holding fewer board seats and losing its ability to appoint the chairman. Though these factors alone did not trigger government opposition, combined with the capital extraction and lack of structural protections, they posed a significant risk.

Minister Tong confirmed that while the government would not allow the current deal to proceed, it remained open to future proposals involving Allianz or other partners if the concerns raised were addressed.

“The government’s view is not that NTUC Income should not seek partnerships or external capital; rather, we must ensure that any deal preserves NTUC Income’s ability to fulfil its social mission and does not undermine the cooperative movement as a whole,” Tong stated.

MAS’s Role and Response from Finance Ministry

During the same Parliamentary session, Tanjong Pagar GRC MP Joan Pereira questioned why the Monetary Authority of Singapore (MAS) had not shared Allianz’s capital extraction plan with MCCY earlier, given its significance to the Income-Allianz transaction. This raised further concerns about coordination between government agencies overseeing critical financial transactions.

Responding to Pereira’s query, Minister Chee explained that MAS had received the capital extraction proposal in mid-July 2024. At that time, MAS was primarily focused on Allianz’s financial strength and ensuring protection for NTUC Income’s policyholders. MAS did not immediately see the relevance of the capital reduction to MCCY’s earlier decision to grant NTUC Income an exemption during its corporatisation.

It was only after the 6 August 2024 Parliamentary session that MAS identified potential implications for MCCY’s oversight of NTUC Income. Minister Chee added that regulatory information gathered by MAS is typically shared with other government agencies only when necessary. The decision to inform MCCY was made once the broader implications became clear.

Public Outcry and Concerns

The controversy surrounding the deal largely revolved around concerns that Allianz, as a multinational corporation, would not be aligned with NTUC Income’s mission to serve the needs of lower-income Singaporeans.

NTUC Income was established with a clear mandate to provide affordable insurance options, especially for those in the labour movement and the lower-income segments of society.

Several prominent voices spoke out against the transaction.

Former NTUC Income CEO Tan Kin Lian expressed concerns about the potential shift in NTUC Income’s priorities, stating that the proposed deal could undermine its original purpose.

Similarly, ambassador-at-large Tommy Koh and former Group CEO of NTUC Enterprise Tan Suee Chieh voiced their opposition.

Mr Tan Suee Chieh went as far as to call the deal a “breach of good faith” and urged government regulators to intervene.

The key fear was that Allianz’s corporate objectives, which are driven by profit motives typical of global insurers, would lead to a reduction in NTUC Income’s commitment to affordable and accessible insurance for Singapore’s working class.

There were worries that under Allianz’s ownership, insurance premiums could increase, pricing out low-income individuals who depend on NTUC Income’s services.

NTUC Income, Singapore’s one and only insurance co-operative, was corporatised in 2022 into Income Insurance Limited “to achieve operational flexibility and gain access to strategic growth options to compete on an equal footing with other insurers locally and regionally”.

Shareholders were assured at the 2022 annual general meeting that NTUC Enterprise will continue to be the majority shareholder of the new company post-corporatisation.

SINGAPORE: Mr K Shanmugam, Minister for Home Affairs and Law, said the government will not release specific data on the duration of stay in Singapore for those granted Singapore citizenship (SCs) and Permanent Residency (PRs) in 2023. This decision comes in response to a data request from Workers’ Party Member of Parliament (MP) Louis Chua.

The minister explained that this decision is motivated by concerns that potential applicants might manipulate their applications to meet perceived benchmarks, thereby “gaming the system.”

He also cautioned that foreign countries could misuse publicly available data to undermine Singapore’s national interests.

Mr Shanmugam was responding to a parliamentary question filed by Mr Chua.

The Sengkang MP asked the Minister with regard to new permanent residencies and new citizenships granted in 2023, what is the 25th percentile, median, average, and 75th percentile of the duration in which adult foreigners have resided in Singapore prior to obtaining permanent residence.

He further queried for the similar data for adult permanent residents who have held their permanent residence prior to obtaining Singapore citizenship.

Minister Shanmugam: Length of Residency is Just One Factor in Application Assessments

In a written reply on 14 October, Mr Shanmugam affirmed that the government publishes the number of PRs and SCs granted each year, along with selected profile indicators such as age group, highest qualifications attained among those aged 20 and over, and region of origin.

He stated that the Immigration & Checkpoints Authority (ICA) assesses each application for Permanent Residency and Singapore Citizenship based on a range of factors.

The applicant’s length of residency is only one of the factors considered.

Other factors include, but are not limited to, the applicant’s family ties to Singaporeans, economic contributions, educational qualifications, age and family profile, the applicant’s ability to integrate into society, and their commitment to establishing roots in Singapore.

Mr Shanmugam further noted that different criteria may apply to different applicants, depending on their background and circumstances.

“For example, an applicant applying as a spouse of a SC will be considered differently from someone applying on the basis of having stayed in Singapore for a period of time, and contributed to employment creation in Singapore.”

While declining Mr Chua’s request for specific data, Mr Shanmugam reiterated that releasing such information could lead to manipulation by potential applicants.

He emphasised the importance of being judicious about the information shared, despite the government publishing some general indicators such as age, education level, and region of origin for PRs and SCs.

“We have to be careful that we do so in a way consistent with our national interests. ”

The latest response from Minister Shanmugam is consistent with his previous statements regarding new PRs and SCs applications.

In 2021, in a response to PAP MP for Choa Chu Kang GRC Mr Zhulkarnain Abdul Rahim’s queries about the reasons for unsuccessful permanent residency applications, Minister Shanmugam reiterated that the Immigration and Checkpoints Authority (ICA) evaluates these applications based on various factors.

He explained that specific reasons for rejections are not disclosed to prevent potential misuse and safeguard Singapore’s national interests.

In February 2023, NCMP Leong Mun Wai inquired about the number of non-citizen brides and grooms who married Singapore citizens and subsequently obtained Singapore citizenship from 2000 to the present. He also requested a breakdown by country of origin and the median duration after marriage before citizenship is granted.

In response, Minister Shanmugam stated that, on average, about 2,700 foreign spouses have become Singapore citizens each year from 2000 to 2022. However, he declined to provide detailed breakdowns by specific country due to concerns about potential bilateral sensitivities.

He noted that foreign spouses must first be Permanent Residents before applying for citizenship, and the time between marriage and obtaining citizenship can vary significantly based on individual circumstances and various factors assessed by the ICA.

23,472 individuals granted citizenship in 2023

The latest National Population and Talent Division (NPTD), published on 24 September, noted that in 2023, 23,472 individuals were granted citizenship, while 34,491 individuals were granted permanent residency.

The average number of new citizenships and permanent residencies granted per year over the last five years was 22,400 citizenships and 32,600 permanent residencies, slightly higher than the preceding five-year period, which recorded averages of 21,600 citizenships and 31,100 permanent residencies.