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ST Marine has yet to start building the Police Coast Guard boats after tender was awarded – why?

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5 years ago

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Back in November 2018, a Singapore shipbuilding company ST Marine was awarded a S$316 million for the construction and maintenance of 12 boats for the Police Coast Guard. However, after half a year since the contract was awarded, ST Marine has yet to build the boats. The contract term was for the winning tender to commence with construction immediately therefore confirmed designs for the boats had to be ready at the point of tender.

When ST Marine was awarded the contract, we raised some questions about the company being part of a government contract. One of the questions we raised was about lapse in notice that was given after the contract was awarded to ST Marine. We noted that while the contract was awarded in July 2018, other bidders were only notified in November, well beyond the required 72 day notice period according to the Government Procurement Regulation 2014.

Why a company embroiled in a major corruption scandal was allowed to bid on government contracts

Another significant question we asked was why this private company was still allowed to bid on government contracts given that it was embroiled in one of Singapore’s largest corruption scandal less than 10 years ago.

Back in 2017, former ST Marine group financial controller Ong Teck Liam as well as six other former senior executives of the company were convicted for a 2014 corruption scandal for covering up and accepting bribes of up to at least S24.9 million between 2000 and 2011.

Note that according to the Defence Science & Technology Agency (DSTA) website, there are clear Defence Procurement guidelines which states that any company found guilty of corruption will be barred from obtained any new contracts or tenders from the government. ST Marine certainly fits the bill here as DSTA doesn’t differentiate between corruption involving government and non-government contracts

However, according to the Standing Committee on Disbarment (SCOD), chaired by the Deputy Secretary of Finance (or his deputy), corruption offences are investigated by the CPIB and any company convicted of corruption involving public tenders with the government will be debarred and disallowed from participating in any future bids. Notice the term “involving public tenders with the government”.

So because ST Marine’s scandal didn’t involve any government contracts, the CPIB didn’t see fit to recommend to the SCOD to debar ST Marine from bidding on government tenders.

This was repeated by Ms Rajah in Parliament who said that the process of debarment is an ‘administrative procedure by the government’ to protect the interest of the government as a service buyer against those who have caused direct harm or losses to the government.

She stressed, “There must be a nexus to government related contracts before debarment can be applied.”

Ms Rajah added that the CPIB investigations did not reveal any connection with a government agency or contract where corruption occurred. Therefore, the circumstances in which debarment can be recommended under the policy parameters did not arise.

She added, “In this case, the charges and convictions were against individuals involved, namely ST Marines former group financial controller and six other former senior execs. They were convicted in 2017 for offences committed in the period between 2000 and 2011, the most recent act being 8 years ago.”

Basically, ST Marine was allowed to keep bidding for government contracts because the corruption scandal did not involve any government contracts, did not cause any losses or damages to government agencies, and happened a long time ago.

We asked back then, why the double standard between public and private sector contracts when it comes to debarring a company from procuring government contracts? Wouldn’t the risk of future damages be more or less the same in both cases?

No progress, just conflict of interest?

Just recently, we reached out to Ministry of Home Affairs (MHA) to inquire on the progress of the shipbuilding contract but were met with silence.

On a separate but related note, MHA has also just awarded a new tender for the supervision and management of a shipbuilding project. This one was awarded to a company under ST Electronics – which in fact comes under the ST Engineering group of companies which happens to also own ST Marine.

We wrote to MHA to ask for confirmation that this new tender to oversee a shipbuilding project is in fact the same shipbuilding project that was awarded to ST Marine in November 2018. So far, no response has been issued by MHA.

Considering that the second tender was just awarded on 10 May 2019 and assuming that it is in fact the same project that ST Marine is working on, we also asked if ST Marine was asked to pay any liquidated damages given the supposed delay in construction of the vessels. This query was also met with silence.

On the issue of ST Marine, Second Finance Minister Ms Indranee Rajah who took questions on the issue in Parliament noted there was an error in the date of award of the tender to ST Marine. She said that the contract was actually awarded in 26 November 2018 and that a notice of award was published on the government’s procurement portal GeBiz the next day, 27 November 2018. She added, ““The date of award of tender was initially incorrectly shown as 27 July 2018 and this has been rectified.”

While that answers the question of the lapse in notification of award of the tender to ST Marine, it raises a separate question of why the supervising tender which was ultimately awarded to ST Electronics has options that seems to cater to the needs of ST Marine’s building processess?

The fact is, the second tender which was issued in October of 2018, before the shipbuilding tender was awarded to ST Marine, includes the option for the supervising company to select where the PC Class boats are to be built – China, Taiwan, Latvia, or Singapore. This seems to cater to the ST Marine specifically given that bidders on the shipbuilding tender all have their own shipyards, with the exception of ST Marine.

Again, we note that the supervising tender was issued before the shipbuilding tender was even awarded. So was the tender already internally decided before the official announcement in November 2018?

Should we receive any updates from the government on this matter, we will update this post.

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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.

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1 day ago

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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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Current Affairs

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

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23 September 2024

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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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