PM Lee forgets to mention at gala dinner how DBS attempted to acquire POSB unconstitutionally

PM Lee forgets to mention at gala dinner how DBS attempted to acquire POSB unconstitutionally

At a gala event to celebrate DBS’ 50th anniversary at Capitol Theatre yesterday night (4 Aug), Prime Minister Lee Hsien Loong was full of praise for DBS, a GLC under Temasek.

He praised DBS for playing a crucial role in Singapore’s early industrialisation, taking risks and absorbing downsides to benefit Singapore but not necessarily the bank itself.

At the time, DBS provided MNCs with financing on attractive terms and convinced them to set up manufacturing facilities here. One example PM Lee gave was German MNC, Rollei, which folded up its manufacturing facility in Singapore 10 years later.

He said that DBS faced another major period of transformation in 1998, during the Asian Financial Crisis, when the banking industry was progressively opened up to more international competition. Soon after, DBS merged with POSB and had to take on a full spectrum of customers with differing needs.

“It was a very challenging period for DBS, which plunged resolutely into its own transformation,” he said. There were missteps and setbacks along the way but DBS learned from these and emerged smarter and tougher.

In Singapore, Mr Lee said, it has always focused on bringing greater value to customers and supporting the nation’s development agenda, including its POSB initiatives and moves to make the bank more inclusive and serving children, the elderly, full-time national servicemen and people on public assistance.

DBS is now one of the top 40 banks in the world, he proudly noted.

DBS attempts to acquire POSB unconstitutionally

Even though PM Lee mentioned about the “merger” of DBS with POSB in the late 90s at the gala dinner, he did not reveal the circumstances how the 2 entities were “merged”. At the time of the “merger”, POSB was still a government statutory board of Singapore.

In March 2000, soon after the late President Ong Teng Cheong stepped down, he was interviewed by Asiaweek. Mr Ong revealed what happened behind the scene.

At the interview, Mr Ong disclosed that he, as then the President of Singapore, was not informed of the “merger”.

“Even in my last year as president, I was still not being informed about some ministerial procedures. For example, in April last year (1999), the government said it would allow the sale of the Post Office Savings Bank POSB to DBS Bank. In the past, when there was no elected president, they could just proceed with this kind of thing. But when there is an elected president you cannot, because the POSB is a statutory board whose reserves are to be protected by the president. You cannot just announce this without informing him,” Mr Ong revealed.

In fact, the late President was “informed” through the newspaper.

“I came to know of it from the newspaper. That is not quite right. Not only that, but they were even going to submit a bill to parliament for this sale and to dissolve the POSB without first informing me,” Mr Ong added.

The late President’s office then went to tell the PAP government that it was the wrong procedure – that the government could not simply attempt to “merge” a government statutory board with a company without the consent of the President, which he was entitled to under the Singapore Constitution.

Mr Ong told the Asiaweek, “You’ve got to do this first, do that first, before you can do this. It was question of principle and procedure. We had to bring all this to their attention. That they cannot forget us.”

“It’s not that we are busybodies, but under the Constitution we have a role to play and a responsibility. Sometimes in the newspaper I came to know of things that I am responsible for, but if it had not been reported in the newspaper I would not know about it,” he continued.

In other words, the late President was saying that there might be matters requiring the President’s consent done by the government without his consent, simply because the President did not even know about them in the first place.

Late President Ong Teng Cheong unhappy with PAP government

The Asiaweek’s journalist asked, “You must have been pretty angry that this was still happening in your last year as president?”

Mr Ong replied, “Yes, I was a bit grumpy.”

“And maybe not to the liking of the civil service. They did not like what I said. But I have to be a watchdog all the time, you see. So this is where they are supposed to help me to protect the reserves. And not for me to go and watch out when they do right or wrong,” he lamented.

Mr Ong explained that the President has the right to all the information available to the cabinet under the Constitution.

“And I sourced much information from the cabinet papers. But they are not used to it. So I said: I understand, it’s something new, and I know you don’t like my interference and busybody checking up and so on. But under the Constitution it is my job to do that,” he explained.

Mr Ong passed away on 8 Feb 2002 at the age of 66, about 2 years after giving the only long interview since he stepped down. He died in his sleep from lymphoma. Before his death, Mr Ong had asked to be cremated and for his ashes to be placed at Mandai Columbarium together with those of ordinary citizens instead of Kranji State Cemetery, where the late dignitaries are usually buried.

S R Nathan succeeded Mr Ong as the next President without any competition.

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