SINGAPORE: The central committee of the National Trades Union Congress (NTUC) only knew about the capital reduction plan in the proposed deal between Income Insurance and Allianz when it was announced in parliament, said deputy secretary-general Desmond Tan on Wednesday (Oct 16).
Responding to questions from Members of Parliament (MPs) during the debate on the Insurance (Amendment) Bill, Mr Tan said that NTUC is a major shareholder of NTUC Enterprise, but does not get involved in the day-to-day running of operations.
NTUC Enterprise holds a 72.8 per cent stake in Income Insurance.
Mr Tan said that the NTUC’s central committee was briefed by NTUC Enterprise and Income Insurance on the “strategic imperatives” for the deal, but the capital reduction plan was not highlighted to the central committee.
“In fact, the central committee and myself only knew of this on Monday at the ministerial statement,” said Mr Tan, who is also senior minister of state in the Prime Minister’s Office.
“And as I’m made aware now, from clarifications with (NTUC Enterprise) and Income, Income as a non-listed public company would have to comply with the legal responsibility of non-disclosure of commercially sensitive information on Allianz’s plans post acquisition … because as a non-listed public company … Income is subject to the Singapore code of takeover and mergers.”
The proposed Income-Allianz deal had sought to decrease the capital held by Income, returning some S$1.85 billion to shareholders within three years.
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08:12 MinThe central committee of the National Trades Union Congress (NTUC) only knew about the capital reduction plan in the proposed deal between Income Insurance and Allianz when it was announced in Parliament, said NTUC…see more
CONCERNS FROM MPS
Mr Tan was responding to questions from two MPs on the NTUC leadership’s knowledge of the deal.
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Nominated MP Raj Joshua Thomas pointed to an Aug 5 statement from NTUC president K Thanaletchimi and secretary-general Ng Chee Meng stating that Income would only be able to “continue to fulfil its social mission” if it has access to additional resources to scale up.
“So this begs the question – whether Income had briefed the NTUC leadership of the proposed initiative to reduce share capital,” Mr Thomas said.
“I think that Income has a bit of explaining to do,” he added.
Non-Constituency MP Leong Mun Wai presented similar questions during the close to four hours of debate, asking if NTUC’s leadership was briefed on the full details of the transaction, including the capital reduction plan.
Culture, Community and Youth Minister Edwin Tong told parliament in a ministerial statement on Monday that the deal had been blocked by the government.
Under the proposed transaction, which was announced on Jul 17, Allianz would have acquired a majority stake in Income. The announcement triggered a public outcry, with concerns over whether Income would continue its social mission.
Mr Tong said the government has decided that the deal in its current form would not be in the public interest.
While the government will not allow the proposed transaction to proceed, it is open to new arrangements if the concerns highlighted are fully addressed, said Mr Tong.
Repost from CNA
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