SDP calls for immediate release of Sembcorp Marine’s and Keppel’s financial status

The Singapore Democratic Party (SDP) calls for the immediate release of Sembcorp Marine’s and Keppel’s financial status after learning that Sembcorp Industries might inject funds into its subsidiary Sembcorp Marine or buy full control of the drilling rig builder to replenish finances strained by a collapse in oil prices.

The party also asked how much funds would Sembcorp Industries put up to help out its subsidiary.

Sembcorp Industries largely owned by Singapore’s investment arm, Temasek Holdings with 49.5% shares and Public (50.5%) while Sembcorp Industries owns 61% of Sembawang Marine as its parent company.

News quoted from a source saying, “It’s quite clear that financial support has to come in and a take-private is one of the easier options, but ultimately there needs to be a long-term solution,”

Sembcorp Industries, Sembcorp Marine and Temasek declined to comment the media queries.

The news of the injection on Tuesday caused shares prices of Sembcorp Marine to jump by as much as 8 percent at one point during Wednesday’s trading.

Sembcorp Marine is reported to have incurred huge losses after its dealings with customer Sete Brasil, an oil-drilling company, went sour. Sembcorp Marine and Keppel Corporation build oil-rigs for Sete Brasil which is said to be considering filing for bankruptcy because of a crash in oil prices. The Brazilian company is also facing charges of corruption.

SDP says that it is against the practice of the government under the People’s Action Party (PAP), using public funds to rescue troubled Government-linked companies (GLCs) with little accountability to the public.

It added that Singaporeans are not consulted on how Temasek invests the national funds and should not have to shoulder its losses. This is especially problematic when profits are not equitably distributed to Singaporeans.

The party also found issue with how the news of Sembcorp Industries’ potential rescue caused shares prices of Sembcorp Marine to jump, saying that public money should not be used by the government to benefit private investors in the stock market.

SDP said, “There are many questions surrounding this latest announcement, many of which can only be answered with Sembcorp Marine and Keppel Corporation releasing their financial reports.”