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Parliamentary Approval of Loans: A Case of Déjà Vu?

Published

12 years ago

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By Kenneth Jeyeretnam –

Following my letter to the Ministry of Finance a lot of people have been asking whether we have been here before with the Indonesian loan shenanigans of 1997. Isn’t this just déjà vu? My answer to that is that I don’t believe so. We shouldn’t get ready to throw in the towel yet.

The world has moved on since 1997 and even Singapore is changing, albeit still under the rule of the same political Party who gained a majority and a stranglehold by default in 1960. That same Party has just been given a resounding defeat in Hougang. They attempted to run a campaign that really did seem like a case of déjà vu and it backfired. In 1997 we had only two MPs and one NCMP in Parliament and notably it was the NCMP who spoke up. Fifteen years later we now have six MPs in Parliament. It doesn’t matter that those 6 MPs may have voted with the government on the Budget. They brought down  a GRC in 2011 and the Hougang by-election result has kept up the pressure.

 It is the 40% of ordinary Singaporeans who voted in that watershed election against the government, despite all the veiled threats and intimidation, who will keep them feeling that pressure. That pressure made our ministers fall on their swords and take a pay cut. The voices of those 40% are still being heard through the new media.

With its push to become a global city Singapore cares much more about its international reputation. I have already pointed out how the Norwegian Finance Minister went to Parliament on the 15th May to ask for approval for his country’s loan to the IMF.. Our Finance Minister is Chairman of the International Monetary and Financial Committee of the IMF so he would hardly wish to be seen as opposing greater transparency and accountability, an explicit objective of the IMF.

In 2012 the economic background is one of major institutional collapse, double dip recession and a crisis in the Eurozone that hurts us all. We are also seeing a new scrutiny put on transparency and regulation and again the IMF itself is well aware that good governance is key to financial stability. They won’t easily forget that Greece falsified its way into the Eurozone by manipulating its figures.  As a result of this not only has Temasek Holdings been forced to increase the amount of information it provides but even the very secretive Abu Dhabi SWF has coughed one up.

We are on very safe ground now in demanding accountability from our Ministry of Finance and we will receive support in this. So, while it is always possible that the government will take the same tack as in 1997, try to bamboozle us with Latin and financial terms , I do not think we should worry too much. In any case I know the financial terms and even better I know Latin!

For those who aren’t familiar with the case, back in 1997 a similar question was asked in Parliament by an NCMP about the constitutionality of granting a US$5 billion loan to Indonesia without seeking Parliamentary or Presidential approval. This was brushed aside by the PAP government on the advice of the then AG Chan Sek Kheong. ( he of the miraculous materialisation into a polling booth decision) The PAP argued that Clause 144(1) of the Constitution, which states that

“No guarantee or loan may be given or raised by the Government”, should be interpreted as meaning;
 “No guarantee may be given or loan raised by the Government”. This meant that while the giving of a guarantee required Parliamentary approval, the giving of a loan did not.

Some Latin was used to explain it away.

I am not a lawyer but I do believe that the then AG erred in his interpretation of Clause 144(1). The natural and ordinary meaning of the words, it is clear to me, is that both guarantees and loans cannot be given or raised by the government except with parliamentary approval. If the intentions of the drafters of this clause had been to say that only the giving of guarantees but not loans needs to be approved by Parliament then surely the clause would have read

 “No guarantee shall be given or loan raised …”.

Rather than
“No guarantee or loan may be given or raised by the Government”, 

It also makes no sense from an economic or accountability standpoint that guarantees, which are merely contingent liabilities, should require Parliamentary approval while loans, which involve an actual payment, are exempted. It seems to require some very convoluted logic to explain why one would need scrutiny but not the other.

The Parliamentary question from Desmond Lee, from Tharman’s own GRC, has all the hallmarks of a stage managed exercise. I am convinced the question was tabled solely to convince the IMF that the loan commitment has been ‘robustly’ debated in Singapore’s Parliament. I was accused of being convoluted in my letter but I was writing as one economist to another and quoting Tharman’s convoluted speech back to him.

 The truth is Tharman and Lee’s language to the house was unnecessarily complicated. Tharman’s job is to be accountable to the people , to provide for effective Parliamentary scrutiny of the Executive. It is not his job to obfuscate.  Just as in the Budget, which I pointed out is not set out to IMF standards, which is a masterpiece of opacity and misdirection (here).

Of course couched in Tharman’s language my letter may have been difficult to follow so let me spell it out for you with a bluntness that was of necessity lacking previously. I’ve written as in lines from a short play.

The setting: A Company Shareholder Conference.

Employee: ( posing as concerned shareholder)  “Boss, we work so hard all our lives, even after death pay and pay and we never get any safety net or free school or health and you save up all our money  ‘cos our Gahmen is so clever it never  spends any on us. So now we got big reserves is it?

Boss:  That is correct.

Employee: These lazy  ang moh get everything free even they never work, they get welfare,  they get free child birth,  free school,  hospital even they got expression free is it?

Boss: Correct again.

Employee. You loan five billion dollars of our savings to these Ang mo who destroy their economy is it?

Boss: Yes

Employee: Thank You. You are great

In any case whatever the correct interpretation of Clause 144(1), I still stand by the point that the principles of good governance and accountability require that the government seek Parliamentary approval for loans and guarantees. More importantly I cannot believe the IMF would have appointed Tharman to head of a committee without expecting him to demonstrate exceptional levels of commitment to good governance and accountability free of tricks, semantics, Latin and an AG who believes in magic.

It’s your money! You have a right to know how much there is, where it is and to have a say in how it is used.

Carpe Diem!

Also read Kenneth's Open Letter to the President

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Hotel Properties Limited suspends trading ahead of Ong Beng Seng’s court hearing

Hotel Properties Limited (HPL), co-founded by Mr Ong Beng Seng, has halted trading ahead of his court appearance today (4 October). The announcement was made by HPL’s company secretary at about 7.45am, citing a pending release of an announcement. Mr Ong faces one charge of abetting a public servant in obtaining gifts and another charge of obstruction of justice. He is due in court at 2.30pm.

Published

1 day ago

on

4 October 2024

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SINGAPORE: Hotel Properties Limited (HPL), the property and hotel developer co-founded by Mr Ong Beng Seng, has requested a trading halt ahead of the Singapore tycoon’s scheduled court appearance today (4 October) afternoon.

This announcement was made by HPL’s company secretary at approximately 7.45am, stating that the halt was due to a pending release of an announcement.

Mr Ong, who serves as HPL’s managing director and controlling shareholder, faces one charge under Section 165, accused of abetting a public servant in obtaining gifts, as well as one charge of obstruction of justice.

He is set to appear in court at 2.30pm on 4 October.

Ong’s charges stem from his involvement in a high-profile corruption case linked to former Singaporean transport minister S Iswaran.

The 80-year-old businessman was named in Iswaran’s initial graft charges earlier this year.

These charges alleged that Iswaran had corruptly received valuable gifts from Ong, including tickets to the 2022 Singapore Formula 1 Grand Prix, flights, and a hotel stay in Doha.

These gifts were allegedly provided to advance Ong’s business interests, particularly in securing contracts with the Singapore Tourism Board for the Singapore GP and the ABBA Voyage virtual concert.

Although Iswaran no longer faces the original corruption charges, the prosecution amended them to lesser charges under Section 165.

Iswaran pleaded guilty on 24 September, 2024, to four counts under this section, which covered over S$400,000 worth of gifts, including flight tickets, sports event access, and luxury items like whisky and wines.

Additionally, he faced one count of obstructing justice for repaying Ong for a Doha-Singapore flight shortly before the Corrupt Practices Investigation Bureau (CPIB) became involved.

On 3 October, Iswaran was sentenced to one year in jail by presiding judge Justice Vincent Hoong.

The prosecution had sought a sentence of six to seven months for all charges, while the defence had asked for a significantly reduced sentence of no more than eight weeks.

Ong, a Malaysian national based in Singapore, was arrested by CPIB in July 2023 and released on bail shortly thereafter. Although no charges were initially filed against him, Ong’s involvement in the case intensified following Iswaran’s guilty plea.

The Attorney-General’s Chambers (AGC) had earlier indicated that it would soon make a decision regarding Ong’s legal standing, which has now led to the current charges.

According to the statement of facts read during Iswaran’s conviction, Ong’s case came to light as part of a broader investigation into his associates, which revealed Iswaran’s use of Ong’s private jet for a flight from Singapore to Doha in December 2022.

CPIB investigators uncovered the flight manifest and seized the document.

Upon learning that the flight records had been obtained, Ong contacted Iswaran, advising him to arrange for Singapore GP to bill him for the flight.

Iswaran subsequently paid Singapore GP S$5,700 for the Doha-Singapore business class flight in May 2023, forming the basis of his obstruction of justice charge.

Mr Ong is recognised as the figure who brought Formula One to Singapore in 2008, marking the first night race in the sport’s history.

He holds the rights to the Singapore Grand Prix. Iswaran was the chairman of the F1 steering committee and acted as the chief negotiator with Singapore GP on business matters concerning the race.

 

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Chee Soon Juan questions Shanmugam’s $88 million property sale amid silence from Mainstream Media

Dr Chee Soon Juan of the SDP raised concerns about the S$88 million sale of Mr K Shanmugam’s Good Class Bungalow at Astrid Hill, questioning transparency and the lack of mainstream media coverage. He called for clarity on the buyer, valuation, and potential conflicts of interest.

Published

2 weeks ago

on

23 September 2024

By

On Sunday (22 Sep), Dr Chee Soon Juan, Secretary General of the Singapore Democratic Party (SDP), issued a public statement on Facebook, expressing concerns regarding the sale of Minister for Home Affairs and Law, Mr K Shanmugam’s Good Class Bungalow (GCB) at Astrid Hill.

Dr Chee questioned the transparency of the S$88 million transaction and the absence of mainstream media coverage despite widespread discussion online.

According to multiple reports cited by Dr Chee, Mr Shanmugam’s property was transferred in August 2023 to UBS Trustees (Singapore) Pte Ltd, which holds the property in trust under the Jasmine Villa Settlement.

Dr Chee’s statement focused on two primary concerns: the lack of response from Mr Shanmugam regarding the transaction and the silence of major media outlets, including Singapore Press Holdings and Mediacorp.

He argued that, given the ongoing public discourse and the relevance of property prices in Singapore, the sale of a high-value asset by a public official warranted further scrutiny.

In his Facebook post, Dr Chee posed several questions directed at Mr Shanmugam and the government:

  1. Who purchased the property, and is the buyer a Singaporean citizen?
  2. Who owns Jasmine Villa Settlement?
  3. Were former Prime Minister Lee Hsien Loong and current Prime Minister Lawrence Wong informed of the transaction, and what were their responses?
  4. How was it ensured that the funds were not linked to money laundering?
  5. How was the property’s valuation determined, and by whom?

The Astrid Hill property, originally purchased by Mr Shanmugam in 2003 for S$7.95 million, saw a significant increase in value, aligning with the high-end status of District 10, where it is located. The 3,170.7 square-meter property was sold for S$88 million in August 2023.

Dr Chee highlighted that, despite Mr Shanmugam’s detailed responses regarding the Ridout Road property, no such transparency had been offered in relation to the Astrid Hill sale.

He argued that the lack of mainstream media coverage was particularly concerning, as public interest in the sale is high. Dr Chee emphasized that property prices and housing affordability are critical issues in Singapore, and transparency from public officials is essential to maintain trust.

Dr Chee emphasized that the Ministerial Code of Conduct unambiguously states: “A Minister must scrupulously avoid any actual or apparent conflict of interest between his office and his private financial interests.”

He concluded his statement by reiterating the need for Mr Shanmugam to address the questions raised, as the matter involves not only the Minister himself but also the integrity of the government and its responsibility to the public.

The supposed sale of Mr Shamugam’s Astrid Hill property took place just a month after Mr Shanmugam spoke in Parliament over his rental of a state-owned bungalow at Ridout Road via a ministerial statement addressing potential conflicts of interest.

At that time, Mr Shanmugam explained that his decision to sell his home was due to concerns about over-investment in a single asset, noting that his financial planning prompted him to sell the property and move into rental accommodation.

The Ridout Road saga last year centred on concerns about Mr Shanmugam’s rental of a sprawling black-and-white colonial bungalow, occupying a massive plot of land, managed by the Singapore Land Authority (SLA), which he oversees in his capacity as Minister for Law. Minister for Foreign Affairs, Dr Vivian Balakrishnan, also rented a similarly expansive property nearby.

Mr Shanmugam is said to have recused himself from the decision-making process, and a subsequent investigation by the Corrupt Practices Investigation Bureau (CPIB) found no wrongdoing while Senior Minister Teo Chee Hean confirmed in Parliament that Mr Shanmugam had removed himself from any decisions involving the property.

As of now, Mr Shanmugam has not commented publicly on the sale of his Astrid Hill property.

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