Yesterday the Government blocked the Income Insurance-Allianz deal in its current form though it indicated that the door was open to restructure the deal. However the revelations that there was to be a capital reduction exercise after Allianz acquired a majority shareholding in Income Insurance raises several disturbing questions.

FIrstly, why did Income Insurance not disclose this to the public when Allianz made the offer? I understand from the Minister for Community, Youth and Sport’s statement that when NTUC Enterprise corporatised Income Insurance it was granted exemption from having to return the accumulated surplus of $2 billion to the Cooperative Societies Liquidation Account when it would have been applied to benefit the cooperative movement as a whole. Alternatively it could have been donated to charity.

Secondly, the PAP , the Government and NTUC are joined at the hip and virtually indistinguishable. In fact the Government proudly proclaims the links between the two organisations. The Secretary General and Deputy SGs of NTUC are all either current or former PAP MPs or Ministers. Desmond Tan is a Senior Minister of State in the Prime Minister’s Office. The Chairman of NTUC Enterprise is LIm Boon Heng, a former PAP Minister. It is inconceivable that the Government was unaware of the planned capital reduction exercise. It looks very much as though the exercise would have gone ahead as planned if there had not been a huge outcry against it. Edwin Tong’s whole act of posing as the impartial gamekeeper looks especially disingenuous.

Thirdly, was the whole Allianz transaction just a way to extract the surplus from Income Insurance, as if it has the support of a global insurance giant it presumably needs much less regulatory capital?

Fourthly would any bonuses be paid out of the excess capital returned to shareholders to those on the boards of Income Insurance? And would “honoraria”, as the Cooperative Societies Act puts it, be paid to members of the board of NTUC Enterprise or even to those on the Central Committee of NTUC?

These are all questions the Government, NTUC Enterprise and Income Insurance should answer. Singaporeans should note that this is an example of how increased scrutiny and accountability can work and why Singapore needs more Opposition MPs who are up to that task.

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