Chief of the Monetary Authority of Singapore (MAS), Ravi Menon (Menon), has said that Singapore needs to raise its auditing and accounting standards to help boost the nation’s Environmental, Social, and Corporate Governance credibility following a series of corporate scandals.

As reported by Bloomberg: “Singapore has had its share of high-profile corporate scandals in recent years. Hyflux Ltd., a water-treatment firm, owes about S$2.8 billion ($2.1 billion) to some 34,000 retail investors and banks, while commodity trader Noble Group Holdings Ltd. remains under investigation by local authorities for its accounting practices. Troubled oil trader Hin Leong Trading  also faces forgery charges and accusations of hiding losses.” In fact, this publication has reported that Hin Leong has covered up US$800 million losses from creditors

Yet, while there remains much work to be done in regulating the more traditional regulatory standards in Singapore, it would appear that our city-state wants to push digital banks in Singapore even as far larger economies, such as China and the US are clamping down on such digital banks due to regulatory issues.  While this isn’t an attempt to denigrate digital banking or downplay innovation, one does have to question why authorities are pushing so aggressively ahead with something that is arguably harder to regulate when the standards of more traditional businesses might be lacking?

Menon has been quoted as saying that:

There have been several failures that are due to lapses in accounting, auditing, and some fraudulent activities are not as easily detected.

Should we perhaps prioritise getting our own house in order first before expanding so rapidly?

Further, it is noteworthy that while Singapore’s corporate disclosure level may have improved this year, it lags behind neighbouring countries like Malaysia and Thailand, according to a report published in October by the Securities Investors Association (Singapore).

Yet, despite this, Singapore has just issued four digital banking licenses to Alibaba’s Ant Group, joint bidders Singtel and Grab, internet services company Sea and a consortium comprising Greenland Financial Holdings, Linklogis Hong Kong, and Beijing Co-operative Equity Investment Fund Management.

Why are we rushing in when other jurisdictions are clamping down especially when we are, by our own admission not quite meeting the standards where traditional businesses are concerned?

Is this somewhat contradictory?

Should we not at least wait to see how our regulatory framework can be improved before rushing headlong into a new area? Should we not at least wait to see how investigations in Hin Leong Trading and the Noble Group pan out first before rushing to issue licenses in new areas?

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