After breaking the news about Ridout Road and the two senior PAP ministers Shanmugam and Balakrishnan renting landed mansions there, I personally attended Parliament for the ensuing Ridout Road Debate on 3 July 2023. So, I was there when Shanmugam stood up to thunder:

“The questions I will deal with are: one, why am I living in a rented place in the first place and why am I not living in my own house; two, am I making some money renting out my own property while I live in a house rented from the state; three, the size of the land surrounding the Ridout house; four, what the Ridout house is like; and five, was there a conflict of interest?

First, why am I renting? I am renting because I decided to put my family home, where I was living before June 2018, up for sale. In 2016, I was approaching my 60s, age-wise. I reviewed my finances and realised that too much of my savings were tied up in my family home. I had bought the house using my previous income as a lawyer before I became a Minister.

When I bought my family home, I had assumed a future stream of income, based on what I was earning in the private sector. After I became a Minister, my income changed and thus I found too much of my savings was tied up in one house. I was advised that it would be wiser not to have most of one’s savings in one asset. So, I decided to put my family home for sale.

Before I proceed further, let me make it clear. I did not consider selling my own home because of financial need. That was not the case. And I also do not regret having foregone my previous earnings as a Senior Counsel. It is a privilege to be in public service and if I am asked, I will make the same choice again.

So, to prepare for the sale, I decided to move out from my family home and live in a rental property. I looked at several rental properties, including black and white houses. I have long liked black and white houses. And eventually, in 2018, I decided to make an offer for 26 Ridout Road

Around the same time, I also rented out my family home while deciding on the sale. It took me a while to decide to sell, and then COVID-19 intervened. My family home was put on the market in November 2021.“

As we can see from the above Shanmugam used his Parliamentary speech to paint a picture of a man who has made great sacrifices in having to take a huge salary deduction from being a top litigator when he become a mere senior Minister. It seems the cut in earning power or his income stream was so great that it would no longer sustain the property he had bought whilst in private practice, as it meant too much of his wealth was tied up in one house.

In case we missed how great a sacrifice this was, former PAP MP and colleague in Sembawang GRC, Lee Bee Wah said:

“But in order to serve the people, since entering politics, he earned at least S$100 million lesser, and he did not make any grievances.”

Well, you can put away your tissues now. The “$100million lesser” it turns out, is no longer so lesser. This picture of noble sacrifice to serve Singaporeans is somewhat undercut by the recent astonishing revelation that in September last year Shanmugam sold his former house at Astrid Hill, one of the most prestigious areas of Singapore, for a staggering $88 million to a trust managed by UBS Trustees (Singapore) Limited.

Question two above “am I making some money renting out my own property while I live in a house rented from the state: A question asked and answered by Shanmugam very skillfully in parliament when he said: “The answer is NO, I am not making any money from the difference in rentals” Indeed! But if we take out the words “renting out” THEN the answer is YES. The profit, the money being made was not from the rental but from the sale. He had also paid off his mortgage on that property by the end of 2008, the same year he became a `PAP minister.

My family home was put on the market in November 2021. We do have to give credit to Shanmugam for doing what he has said he would do. Namely diversifying his assets. Although from the details of the transaction we can see that it has taken almost two years for the property to actually be sold.

The beneficiary is the Jasmine Villa Settlement. However no further details are available as to who is behind the Jasmine Villa Settlement but I assume they are a Singaporean individual or company as foreigners are not allowed to buy landed properties. Although PRs of at least 5 years who have made an “exceptional” contribution to Singapore would be allowed to apply for clearance from SLA. SLA, as all Singaporeans know, is under the Ministry of Law which is headed by Shanmugam. This is purely hypothetical in any case since there is no proof that the identity of the ultimate buyer is not Singaporean. If the buyer was someone who acquired citizenship while Shanmugam was Minister of Home Affairs then there would still be a conflict of interest since MHA would be involved in the approval process. I therefore call upon Shanmugam to disclose the identity of the buyer and whether there has been a subsequent sale, as some have alleged, in order to put Singaporeans’ minds at ease.

Shanmugam himself doesn’t want you to feel too sorry for him though. As he says, the loss of Income is offset by the privilege of service. And I also do not regret having foregone my previous earnings as a Senior Counsel. It is a privilege to be in public service and if I am asked, I will make the same choice again.

I suppose the bitter pill of loss of income stream is also offset by the knowledge that landed property prices have risen exponentially in the last 20 years. Shanmugam’s skills at managing his personal fortune are even more apparent when one takes into account the fact that he only paid $7.95 million for the property back in 2003. In 20 years he’s made approximately a 13% compounded annual return.

And this can be ascribed to deliberate Government policy which has encouraged the ultra-rich to move to SIngapore and acquire PR status almost automatically followed by citizenship in a few years. Clearly making an “exceptional” contribution to Singapore can be defined in purely monetary terms, As Lee Hsien Loong said back in 2013, “In fact, if I can get another 10 billionaires to move to Singapore and set up their base here, my Gini coefficient will get worse but I think Singaporeans will be better off, because they will bring in business, bring in opportunities, open new doors and create new jobs, and I think that is the attitude with which we must approach this problem.”

Whether Singaporeans have got richer as a result is highly questionable since rising prices have eroded the value of their wages but what is certainly true is that PAP Ministers and many MPs and their relatives have got obscenely rich as a result of the stratospheric rise in prices for GCBs. Many if not most own landed properties. Some like LHL have a whole property portfolio. In fact adopting these policies as well as being lax on money laundering, which also inflates asset values, looks like a clear case of government policy being tailored to serve the interests of (landed) property owners rather than the interests of the overwhelming majority of our people living in HDB with the government as their landlord. The value of the reserves may have benefited from the stratospheric rise in property prices, since the state owns 80% of the land, but as I have stressed repeatedly virtually none of the assumed massive rise in value, to $3 trillion or more, has been invested in Singaporeans.

What is most shocking is the way that Shanmugam had hidden his excess of good fortune from Singaporeans. We need a public declaration of MPs and Ministers’ assets with full transparency.

Of course I am not suggesting that Shanmugam has done anything illegal here but I recall that in 1976 at the General Election, the late Lee Kuan Yew poured scorn on the opposition and their inability to manage their own fortunes. My own late father JBJ, responded by saying that LKY had managed his own personal fortune beautifully. He got sued as a result. My father later clarified that what LKY had done was “not cricket.” Representing the people of Singapore who wanted an opposition voice in parliament didn’t just bring a loss in income stream to my father, it brought total financial wipeout and as I’m sure you all know, bankruptcy and the loss of our family home in Rebecca Road. JBJ always played cricket by the rules like a true gentleman. He also had no regrets and was fighting for Singapore right up to his last breath.

Published by kjeyaretnam

I'm a Singaporean economist who became an opposition activist. I blog to provide an alternative to the porkies that the Pinkies tell. It just so happens that my alternative is the truth. That's why I've never been sued in any civil or criminal court no matter how hard hitting my criticism. I'm quoted and interviewed and asked to speak across the world but largely censored in Singapore in an effort to silence my political opinions. The left hate me because they think I split their vote and because I eschew their outmoded economic models. Models that don't work. The Right and the Conservatives hate me because I'm a liberal. I'm not sure what the middle think of me. I don't think there are more than a handful of people in the middle, here in Singapore. I'm a Singaporean born and bred, dual heritage, my parents Singaporean established here before the State of Singapore was created. I'm not Eurasian. I read economics at Cambridge and could be broadly described as from the Keynesian school but I believe in interventions. I was formerly a successful hedge fund manager. After economics and politics my greatest interests are history, film and Makan. I run but I run so I can eat like a Singaporean. View all posts by kjeyaretnam