Non-Constituency Member of Parliament (NCMP) Leong Mun Wai voiced his surprise and concern following Culture, Community, and Youth Minister Edwin Tong’s intervention to block the proposed acquisition of NTUC Income by German insurer Allianz.
The deal, which was announced on 17 July 2024, would have allowed Allianz to acquire a majority stake in the Singapore-based insurer.
However, mounting public concern regarding NTUC Income’s ability to maintain its social mission prompted government scrutiny, leading to the deal's halt.
In a ministerial statement on 14 October 2024, Minister Edwin Tong addressed Parliament, stating, “The government has assessed the proposed transaction and has decided that it would not be in the public interest for the transaction, in its current form, to proceed.”
The Ministry of Culture, Community and Youth (MCCY) raised specific concerns regarding the deal’s implications for both NTUC Income and the cooperative movement in Singapore.
The proposed deal had sparked a public outcry, with questions surrounding whether NTUC Income could continue serving its social mission following Allianz’s acquisition.
A key issue raised by the MCCY was the lack of clarity on the proposed capital reduction and how it aligned with earlier representations made by NTUC Income during its corporatisation in 2022.
According to Minister Tong, the substantial capital reduction set to occur after the transaction raised doubts about Income’s ability to sustain its financial strength and social mission.
Minister Tong noted that Income had been corporatised in 2022, at which point it was granted an exemption from Section 88 of the Co-operative Societies Act.
This exemption enabled the transfer of approximately S$2 billion in surplus from the cooperative entity to the new corporate entity.
The government believed that this surplus was intended to support NTUC Income’s financial strength, but the capital extraction outlined in the deal contradicted this purpose.
“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 the co-op movement in Singapore as a whole,” Mr Tong explained, adding that the MCCY had not seen any arrangement in the current transaction to account for the S$2 billion surplus.
The lack of transparency regarding these details particularly troubled NCMP Leong Mun Wai.
During the parliamentary session, Leong expressed shock over the disclosure of NTUC Enterprise’s intention for capital extraction, a critical component of the deal.
He argued that such information should have been made publicly available from the outset of the proposed transaction.
“This information should be available to all Singaporeans,” Leong said, criticising the failure to disclose key financial conditions. “
For the last few months, we were under the impression that the information provided was complete. Now, we learn about capital extraction, which is a very important condition of any financial deal.”
Leong’s comments reflected his dissatisfaction with how the deal had been communicated to the public.
“I’m surprised, I’m shocked, and I’m very unhappy today that this important condition was not disclosed to Singaporeans when we were all discussing this deal,” he remarked.
He also pressed for accountability, asking, “Who is responsible for not disclosing this information? Can the government give a commitment that it will pursue responsibility in this matter?”
20 окт 2024
