Richard Hu Tsu Tau
Singapore
“Sir, I think it is eminently fair, because the proposal really is for the Government to spend money to give shares to Singapore citizens. Either you agree or you do not agree. Or, if you agree, perhaps you consider the amounts insufficient or too much.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time". The purpose of this Bill is to make provision in accordance with Articles 148(2) and 148C(2) of the Constitution for additional expenditure in excess of the provisions authorised by the Supply Act, 2001.”
“I think the Prime Minister and DPM Lee have already explained it will be based on income levels, with people living in flats as a proxy. So there is no political content in it. It depends on the income level, whether you have served national service or whether you are an elderly person.”
“I really do not understand. I know you are arguing on technicality for which I agree that you may have a point. But, nevertheless, because it is a proposal to share Singapore's surpluses with the population, the distribution is not something which you can argue against.”
“As I said, the estimates will be available around mid-October. I do not think, at this time, I want to give a specific date when the second package will be announced, but it will be done as soon as practicable. IN-PRINCIPLE AGREEMENT WITH MALAYSIA ON OUTSTANDING BILATERAL ISSUES (Assessment) 4.”
“Mr Speaker, Sir, when the $2.2 billion off-Budget package was announced in July this year, we said that the Government would do more to assist Singaporeans if the global economic situation worsened in the coming months.”
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“There has been an increase in non-performing housing loans over the year, ie, loans on which borrowers have not been servicing their instalments for 3 months or more. Such loans amounted to 1.7% of the banks' total number of housing loans as at end-August 1998 compared with 1.0% as at end December-19971. The default rate is not as yet worrying, but the MAS is monitoring closely the trend. 1 These estimates are based on data from 10 leading commercial banks, accounting for 90% of all housing loans extended by commercial banks. The proposed cut in CPF contribution rate would have some impact on mortgage loan repayments. However, the impact will be mitigated by both the banks and the Government. Just like the HDB will reschedule the loans for those purchasing HDB flats and shops, banks can be expected to reschedule the private property loans as far as possible and recall the loans only as a measure of last resort. As announced by the Prime Minister in his recent National Day Rally Speech, in the event the Government decides to cut CPF contribution rates, the Government will be prepared to help property owners in their monthly housing loan repayments through a bridging loan scheme. The scheme would offer loans to make up for shortfalls in housing loan repayments arising directly from the CPF cut. The Government is currently studying the terms and conditions and the implementation details of such a scheme, and will announce it at an appropriate time. PERMANENT RESIDENT AND CITIZENSHIP STATUS 4. Mr Shriniwas Rai asked the Minister for Home Affairs how many people were granted permanent resident and citizenship status from 1991 - 1995.”
“Under our existing tax laws, whether a payment is tax deductible will depend on whether it is a revenue or capital expenditure in nature. If it is the latter, it would not be allowed a deduction as conversely, we do not tax capital gains. Lease payments, if made for the purpose of acquiring an asset of enduring benefit, would be a capital expenditure and thus not allowed a tax deduction. Mr Ee may be aware that to assist companies to weather the tough economic conditions, JTC has introduced a number of changes with regard to its land lease policy. One of the measures is to offer industrial land tenants the option to pay their land rents for a period of up to 30 years in an upfront lump-sum payment, with effect from 1st January 1998. This option will help to reduce the cost of land for industrial users. To complement this measure, I have also decided to allow tax deduction for amortisation of such upfront payments made by JTC and HDB lessees for industrial land leases with a duration of less than 30 years. This is despite the fact that under our normal tax laws, such payments are generally capital expenditure and not allowed a tax deduction. The deduction is applicable to all qualifying new leases entered into on or after 1st January 98. MORTGAGE LOAN DEFAULTS 3. Mdm Claire Chiang See Ngoh asked the Minister for Finance if he will provide more information about the rise in private residential mortgage loan defaults from April to September 1998 and whether this will become a worrying trend; and how the Government will tackle this problem, particularly in view of the fact that any cut in Central Provident Fund contributions may exacerbate the problem.”
“As at the end of September 1998, the number of tax refunds to be processed by IRAS was about 14,500. 5,700 of these refunds are claimed by registered GST traders for input tax paid on their business purchases. GST traders filed their claims monthly, quarterly or yearly based on the filing frequency they have chosen. More than 90% of the traders get their GST refunds within 2 to 3 weeks of their claim. The refund for the other taxes, namely, income and property taxes are also expeditiously dealt with. 85% of income tax refunds are made within 2 weeks after the claims are processed. The more complicated cases may take 4 to 6 weeks. Refunds for property tax usually take about 1 month from the date the claims are processed. UPGRADING OF HOUSING AND DEVELOPMENT BOARD FLATS 28. Mr Chiam See Tong asked the Minister for National Development (a) whether lessees, whose flats are to be upgraded under the Housing and Development Board's upgrading programme, should contribute less towards the cost of upgrading their flats in view of the drop in property prices and building costs and (b) whether there would be a slow down in the upgrading of HDB flats this year.”
“The Government is closely monitoring business costs. In June this year, a package of Off-Budget Measures aimed at reducing business costs was announced. Further cost-cutting measures, including all forms of Government taxes and levies, are being reviewed. In the case of taxes on petroleum products, I should point out that the levying of excise duties is one of the measures used to curb excessive vehicle usage and minimise congestion on the roads. Any proposal to reduce duty on petrol would therefore have to take into account its impact on road usage. Electronic Road Pricing (ERP) has just been introduced and Government will need some time to monitor the new road usage and traffic patterns. TAX REFUND FOR CORPORATIONS AND INDIVIDUALS 26. Mr Chuang Shaw Peng asked the Minister for Finance what is the outstanding number of cases where corporations and individuals apply for tax refund; and whether his Ministry will expedite the processing of the refund so as to ease the cash flow of those who applied.”
“Mr Ong Kian Min asked the Minister for Finance whether, in line with its objective of reducing the cost of doing business in Singapore, the Government will consider reducing taxes on petrol and diesel and/or taking other measures to reduce pump prices of petrol and diesel.”
“GST was introduced in 1994 to achieve a better balance between direct and indirect taxes. With its introduction, both corporate and personal income taxes were cut substantially. The implementation of the 3% GST was intended to be revenue neutral. Last year, GST collection totalled $1,927 million. Whereas revenue forgone from the cut in income taxes and other offsets was $2,273 million, so that the original objective was achieved. The present economic downturn is due primarily to a fall in external demand. As domestic demand accounts for less than 30% of total demand, and the GST tax is only 3%, reducing or even suspending GST altogether will not raise total demand significantly. A 2% reduction in GST will mean a major loss to the Government of an important source of revenue. The Government has been lowering taxes and charges wherever possible to reduce business costs, and will continue to do so. However, the Government will adjust other taxes rather than the GST, for two reasons. Firstly, the incidence of the GST is widely and evenly distributed across all types of economic activity. So for the same amount of revenue collected, the burden of the GST is felt less heavily than taxes which levy a higher tax rate on a narrower range of activities, such as property tax. Secondly, any short term adjustments in taxes should be broadly consistent with our long term taxation policies. The Government had stated when the GST was introduced that the GST rate would remain unchanged for at least 5 years. Reducing the GST rate from 3% to 1% may mislead the public as to the Government's long term plans, and cause unnecessary anxiety and misunderstanding later when the GST rate has to be restored. REDUCTION OF PETROL AND DIESEL COSTS 25.”
“Singapore's official ringgit holdings consisted mainly of offshore ringgit deposits which GIC placed with banks based in Singapore, and on-shore ringgit deposits with Malaysian banks in Malaysia. Regarding the offshore ringgit deposits, the unexpected imposition of currency controls caused the banks to prepay GIC's ringgit deposits in US dollars at 4 ringgits to the US dollar. GIC has thus received full payment in US dollars for the offshore deposits. As for the on-shore deposits, GIC is discussing the status with Bank Negara Malaysia. MEASURES TO HELP WORKERS AFFECTED BY ECONOMIC CRISIS 22. Mr Cyrille Tan asked the Prime Minister, with the deepening economic crisis causing workers to face problems such as shorter workweek, no overtime work and lay-offs and having significant impact on their coping with the cost of living, whether the Government will introduce further measures to help the affected workers.”
“Nothwithstanding the Asian economic crisis, and the turmoil in world financial markets, our reserves are earning satisfactory returns. This is because our foreign reserves are well diversified in terms of currency distribution, and asset classes such as bonds, equities and cash. Moreover, the bulk of our reserves are invested in the G-7 countries. STATUS OF SINGAPORE'S RINGGIT HOLDINGS 20. Mr Inderjit Singh asked the Minister for Finance what is the status of the several billions of ringgit that Singapore was holding prior to the currency control imposed by the Malaysian Government.”
“Sir, I beg to move, (1) In page 6, line 35, to leave out "in favour of the resolution". (2) In page 7, line 18, to leave out "in favour of the resolution". (3) In page 8, line 15, and in lines 33 and 34, to leave out "in favour of the resolution". The reason is to clarify that interested parties cannot exercise their voting rights in any way on special resolutions to vary the earlier authority to conduct a share buy back. Amendments agreed to. Clause 5, as amended, ordered to stand part of the Bill. Clauses 6 to 14 inclusive ordered to stand part of the Bill. Bill reported with amendments; read a Third time and passed. PARLIAMENT (PRIVILEGES, IMMUNITIES AND POWERS) (AMENDMENT) BILL Order for Second Reading read. 6.00 pm”
“- [Dr Richard Hu Tsu Tau]. Bill considered in Committee. [Mr Deputy Speaker in the Chair] Clauses 1 to 4 inclusive ordered to stand part of the Bill. Clause 5 -”
“Also, there is a limit on the amount of shares which it can buy because it is limited to the distributable profits of the company. Turning now to other provisions of the Act, the Member is also concerned that the provision of "deemed interest" can go beyond one tier, in the case of a person having an interest in a share in which a body corporate has an interest in if the body corporate person is accustomed formally or informally to act in accordance with the direction of the person concerned. He also wants to know whether the term "controlling interest" will spell definitional problems. I would say that the hon. Member is right. It is precisely the intention of the provision to catch such situations. In the case described by the Member, the application of deemed interest can go beyond one tier. As for controlling interest, the term has long standing use in the Companies Act. To my knowledge, it has not encountered such problems in practice. There are other matters of detail which the hon. Member has raised. I will not answer them in detail but, generally, I would say that any items he has raised which are of significance will be taken care of in future amendments to the Act. Again, I would reiterate that the proposed amendments to the Act have been consulted extensively with the Corporate Finance Committee, the Association of Banks of Singapore, the Singapore Stock Exchange, the Law Society and other interested parties. So it covers most areas of interest. However, there are bound to be gaps in detail which we will take care of next time when we amend the Act again. Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill.”
“And shareholders and purchasers of shares can quickly see through the intent of management if it is otherwise. The Member is also concerned that the share buy back scheme will increase the debt equity ratio of a company. While this is a possibility, we have introduced a safeguard to allow only 10% to be purchased on each occasion. For the time being, I think this is an adequate safeguard. The Member is also concerned that the share buy back may create problems, triggering off takeover provisions when the 25% limit is inadvertently hit due to the share buy back process. I would like to inform the Member that the Securities Industry Council (SIC) is now crafting some rules to address this particular problem. Insider trading is also a question which has been raised. The prevention of insider trading, we believe, is adequately covered under section 103 of the Securities Industry Act (SIA). The provision prevents a company from trading in shares when their directors and officers are in possession of price sensitive information not yet disclosed to the public. By buying back its shares prior to public disclosure of such information, the company will obviously be in breach of the SIA prevention of insider trading provisions. The Member is also concerned over the possibility of directors and managers buying back shares for their own purposes and therefore engaging in market manipulation. I should like to point out that unscrupulous management could manipulate shares in other ways without the buy back scheme. However, the 10% rule which we have imposed will minimise the potential for manipulation because a 10% share repurchase will not significantly affect the share value of the company.”
“It is not possible for Government itself to determine what the rules for determining the maximum price should be, and this must be left to the shareholders. As regards risk of manipulation by directors in a situation where the company runs the risk of becoming insolvent, I think the penalties imposed on such activity are sufficiently penal for directors not to want to engage in such practices. A director or manager who approves a buy back scheme knowing that the company will become insolvent as a result of the buy back will be guilty of a criminal offence liable on conviction to imprisonment not exceeding 12 months or a maximum fine of $5,000. In addition, they will be personally liable to the creditors of the company to the extent by which the purchase consideration exceeded the distributable profits. I think these are sufficient deterrents to discourage such activity. Mr Sin Boon Ann has asked an extensive number of questions on matters of detail. I will try to answer as many of them as possible. But before doing so, I would like to point out that these amendments to the Companies Act are not comprehensive. We are engaged in a massive exercise in which the Companies Act will be amended over a series of occasions. And what is left undone on this occasion, we will have opportunity to review them in the future. The Member has suggested in a general way that the return of surplus capital to the shareholders may indicate a weakness on the part of management. While this is, of course, a possibility, I think the general experience has been that companies would only buy back shares if they have substantial amounts of surplus capital which they are unable to deploy effectively.”
“She also asked whether there are tax implications. The rule is that companies will be allowed to buy back shares only out of distributable profits. Therefore, consistent with the current practice of companies on the payment of dividends out of distributable profits, shares brought back out of distributable profits will also require franking under section 44 of the Income Tax Act. There is also concern about the tax treatment of shares sold on the open market when the seller of such shares may not know the tax implications. The tax rules here are quite complicated. But the basic principle is that if a share purchase is done in the open market, then the seller of the shares would have been deemed to have sold the shares and it is a capital gain. Whereas if the shares are bought under a special arrangement on an equal pro rata basis, it is deemed as equivalent to the distribution of dividends and is therefore subject to tax. IRAS will be issuing tax rules on this shortly. Mr Ong Kian Min wanted to know why preference shares are not included in the share buy back scheme. I have already explained this. He also wants to know whether the limit of 10% on each share buy back proposal can be reviewed from time to time. I can assure the House that this will be done. What we need is some working experience before we decide to make changes. Under our proposed rules, companies must notify shareholders of the authority given to the directors of the company for a share buy back exercise in which the maximum price to be paid will have to be specified, including the maximum number of shares which can be acquired. The reason for imposing such a condition is a safeguard to ensure that minority shareholders' interests are protected.”
“The Member is also concerned that management may be spending more time in managing share prices than in managing the business itself. I can only comment that you cannot stop this. Whether you have a share buy back purchase scheme or not, if management is inclined to do this, they will do it anyway. The Member has also asked whether there should be a cap. We have in fact imposed a cap of 5% as in the UK, rather than follow the one-broker rule which is prevalent in the United States. This was decided on after consultations with the Stock Exchange of Singapore, the Association of Banks and the Law Society. The Member is also concerned whether timing differences will disadvantage minority shareholders. One way to avoid this is to require that repurchased shares be cancelled immediately on purchase. In addition, listed companies will be required by the SES listings rules, which are yet to be implemented, to disclose all details of these repurchases, including the number of shares bought and the prices paid before the start of trading on the following business day. Also, section 103 of the Securities Industry Act prohibits the company's directors and other insiders from dealing in the company's shares when they are in possession of price sensitive information. This will help ensure that insiders do not deal in the company's shares when they have privileged information such as the time and number of shares to be purchased on any particular day. The Member has also asked whether there should not be a time bar on the distributable profits. I think there is no reason to impose a time bar. All the distributable profits are in fact profits which the company could have declared as dividends. So, to put a time bar on it does not seem reasonable.”
“One of the main reasons for companies deciding to buy back its shares is that it has accumulated substantial excess capital which it finds difficult to place into attractive investments. I do not believe - unless you are suggesting collusion - that an average company would rush around to buy back its shares without good reasons. It could be either because it has got more money than it knows what to do with, and therefore it is better to return part of these to shareholders who may then wish to re-invest in other things. The Member is also concerned as to whether there are adequate safeguards to ensure that the company insiders do not manipulate for personal advantage. Unlike some countries which do not impose limits on the number of shares which can be repurchased each time, we have imposed a rule that such purchases should be limited to 10% of share capital. The 10% limit for share repurchase will minimise the potential and scope for management to manipulate benchmarks such as earnings per share and the price earnings ratio. If a company is in fact making losses, repurchasing the shares will not improve its earnings related benchmarks. And if a company is making only modest profits, a 10% share repurchase will not inflate its earnings related benchmarks noticeably. The other safeguard which we have introduced is to allow buy backs only to be made out of distributable profits accumulated over time. It also requires prior shareholders' approval, and there is an insolvency test. I believe that under the present rules, there are sufficient safeguards to prevent abuse. Of course, in administering this particular amendment over time and as we acquire more experience, there may be a case for reviewing some of these rules.”
“Under the current legal position, where trading takes place through the Singapore office, this foreign institution can be considered as "carrying on business" in Singapore and hence should be registered as well. Such a requirement is unduly onerous, if the foreign parent already has a registered presence in Singapore. As increasingly more financial institutions adopt this practice, the gap between the law and commercial practice needs to be closed to keep pace with other jurisdictions like Hong Kong, where there is no such registration requirement. With the amendment, foreign companies need not register if they effect any transaction through its related corporation licensed or approved under any written law by the Monetary Authority of Singapore or under an arrangement approved by the MAS. In the second instance, clause 13 seeks to free foreign financial institutions from having to register if they establish a share transfer or share registration office in Singapore, in order to become a listed corporation. Conclusion These amendments to the Companies Act form the first group of amendments proposed, as part of a wider exercise to update and modernise company legislation in the coming months. Most of the proposed amendments are still being reviewed and will only be introduced next year. The review is part of an ongoing effort by the Government to improve the business environment and put in place a more flexible legislative framework that can respond quickly to opportunities when the economy picks up again. I believe that the amendments I have proposed take a step in this direction, and set the stage for a more vibrant economic and financial climate in Singapore. Sir, I beg to move. Question proposed.”
“There is no increased risk of inaccurate prospectuses being in circulation, following the extension to 12 months, as the managers and trustees are under legal obligation to re-lodge their prospectuses whenever material changes take place and are made. Substantial Property Transactions Clause 11 of the Bill seeks to repeal sections 160A and 160D of the Act, thus removing the restrictions relating to substantial property transactions. The provisions have created practical difficulties and are somewhat redundant, as all related-party transactions of listed companies are already subject to disclosure or shareholders' approval (depending on the amount) under the Stock Exchange of Singapore rules. Provisions indemnifying Directors or Officers of a Company Currently, it has not been clear from a reading of section 172 whether a company can pay the premiums for a director's indemnity policy. However, it is now standard practice in many jurisdictions for companies to take up insurance for their directors and pay the premium. The amendment makes it clear that a company may purchase insurance for any officer of the company against liability for negligence or breach of duty to the company, which are not occasioned by any wilful act or default on his part. The United Kingdom and Australia have provisions that have equivalent effect. Registration of Foreign Companies Clause 13 amends section 366 by seeking to exempt foreign companies from being registered in Singapore in two specific instances. Nowadays, global financial institutions transact in certain financial instruments booked into a single office of that financial institution. This "global book" will then be "passed" from one financial centre to another and traded by that financial institution's employees throughout the world.”
“Clause 6 amends the Act to provide that the maximum lifespan of employee stock options be extended from 5 years to 10 years. The lifespan of other forms of options remains at 5 years. Trade Franchises The next amendment under clause 7 seeks to amend the definition of "interest" in section 107 of the Act to exclude trade franchises. This will clarify that franchises offered to the public are not subject to the onerous trust arrangements, and trust deed and prospectus requirements of the Act. These provisions will enable the promotion of franchises on a larger scale, as a strategy for small retailers to upgrade and modernise their business. Only franchises as defined will be excluded from the definition. Unit trust and other collective investment schemes will continue to be regulated under the Companies Act. Unit Trust Legislation Unit trusts are currently regulated under the Companies Act as they are a form of "interest" as defined under section 107. The provisions in section 111 and regulation 9 of the Companies Regulations apply across the board to all forms of interest. In order to effectively regulate the different forms of interest under section 107, in particular unit trusts, the Minister for Finance needs to be empowered to be able to make specific regulations concerning each class of interest, as and when the need arises. Clauses 8 to10 of the Bill enable the Minister for Finance to do so. In addition, clauses 10 and 14 of the Bill also seek to extend the life of unit trust prospectuses from the current duration of 6 months to 12 months.”
“The amount by which a company's issued share capital is diminished by share buy backs must be transferred to its capital redemption reserve. Additional safeguards for public listed companies will be formulated by the Stock Exchange of Singapore as part of its listing rules, and will be announced shortly. Other amendments I shall now go through the other amendments in the Bill. These amendments are designed to improve market efficiency and liberalise regulations to afford companies more flexibility. They also seek to rationalise the provisions in the Companies Act with existing practice. Concept of "deemed interest" Clause 2 of the Bill seeks to amend the definition of "deemed interest" in the shares of a company in section 7(4) of the Act, to increase the threshold interest from 15% to 20%. This will bring the concept of "deemed interest" in the Companies Act in line with the threshold of significant influence in an associated company under the accounting convention and the Singapore Code on Take-Overs and Mergers. The current concept of "deemed interest" under section 7(4) is also capable of successive applications ad infinitum along a chain of companies. This has given rise to considerable confusion and practical difficulty. Clause 2 therefore amends the Act to restrict section 7(4) from applying to successive levels. The application of the "deemed interest" concept is restricted to one level. Lifespan of Employee Stock Options Currently, the law restricts all stock options, including those given to employees to take up unissued shares in a company, to a lifespan of 5 years. Employee stock options are a powerful tool to reward employees, and the lifespan should be extended to help retain and motivate employees.”
“These safeguards are as follows: (a) Companies will only be able to buy back their ordinary shares if their Articles of Association allow for it; (b) All companies must obtain their shareholders' approval by ordinary resolution to buy back their own shares via an off-market acquisition on an "equal access" scheme. This essentially means a pro-rata buy back offer. Listed companies must also obtain a similar approval in order to carry out on-market share buy backs; (c) Listed companies will not be allowed to conduct selective off-market purchases. Unlisted companies may, however, obtain their shareholders' approval by special resolution to conduct selective off-market buy backs, but interested parties will not be able to vote in favour of such a resolution; (d) Companies must buy back their shares out of distributable profits only; (e) Companies will be permitted to buy back shares up to a maximum of 10% of their issued ordinary share capital during each relevant period. The capital base to which the 10% is pegged is to be ascertained at the date of the last annual general meeting or at the date of the resolution, whichever is higher, unless the Court through an order had confirmed the reduction of share capital. In the latter case, the issued ordinary share capital of the company would be the amount as altered by the Court order during the relevant period; (f) There is also the introduction of an insolvency test. The company's directors may be personally liable as it is an offence for a director to approve a share buy back when he is aware that the company is insolvent or will become insolvent as a result of the buy back; (g) All repurchased shares must be cancelled; and (h) Companies must set up a capital redemption reserve account.”
“In contrast, a share buy-back affords a company greater flexibility in the timing, procedure and amount of capital to be returned to shareholders. It thus increases the company's ability to adjust its capital base and debt-equity ratio and can improve a company's return on capital, to the benefit of shareholders. [Mr Deputy Speaker in the Chair] 4.42 pm Because of these advantages, the Government earlier made an announcement, in response to the recommendation by the Finance and Banking Subcommittee, that companies will be allowed to repurchase their shares, subject to safeguards. Various forms of share buy-back schemes are already allowed in the United States, the United Kingdom, Hong Kong, Australia and New Zealand. Government agencies have studied these alternative models and have worked closely with the Corporate Finance Committee, the Stock Exchange of Singapore, the Association of Banks in Singapore, the Law Society and other interested parties to develop the proposal in the Bill before you. In this proposal, both listed and unlisted companies, public and private, can conduct share buy-backs. Now I will briefly walk the House through the provisions. Clauses 3 and 4 of the Bill seek to amend sections 73 and 76 to allow for the purchase or acquisition by a company of its own shares, without having to make an application to the High Court for approval. Clause 5 of the Bill introduces new sections 76B to 76G. These sections set out the appropriate safeguards and disclosure requirements that have been formulated to ensure that companies will not abuse the scheme of share buy-backs to the detriment of their creditors.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." Overview The Bill before the House principally focuses on the liberalisation of the law to allow companies to conduct share buy-backs. Apart from this major amendment, opportunity is also taken to incorporate seven other amendments. These amendments seek to: a) update the concept of "deemed interest" under section 7(4); b) extend the lifespan of employee stock options under section 77 from the current 5 years to 10 years; c) exclude trade franchises from the ambit of the Companies Act; d) empower the Minister to make regulations to regulate the administration of unit trusts by managers and trustees, and to extend the life of unit trust prospectuses; e) remove all restrictions relating to substantial property transactions under sections 160A to 160D; f) allow a company to purchase insurance for any officer of the company against liability on negligence or breach of duty to the company not occasioned by any wilful act or default on his part; and g) exempt foreign companies from being required to be registered in Singapore in certain instances. Share buy-backs I will first deal with the amendment relating to share buy-backs. The Bill proposes to allow for the purchase or acquisition by a company of its own shares out of distributable profits, after obtaining the necessary mandates from shareholders. It presents a direct and more efficient means of returning cash to shareholders, than the capital reduction procedure that is currently provided under the Companies Act. For example, a capital reduction exercise may take at least three months to complete and also requires confirmation by the High Court.”
“Sir, I beg to move, "That the Bill be now read a Third time."”
“(h) We expect to finalise the audit of POSBank's residual assets, seek approval from the President's Office for their transfer to the Government and effect the transfer by December 1998 or January 1999. (i) This will leave POSBank as an empty shell. (j) The Constitution (Amendment No.2) Act will then be brought into force through a Gazette Notification, thereby deleting POSBank from the Fifth Schedule. As a final step, a day will also be appointed under the Post Office Savings Bank of Singapore (Transfer of Undertakings and Dissolution) Act to dissolve POSBank. Sir, I beg to move.”
“(c) The Government will then set the date for the transfer of the undertakings of POSBank to DBS at 16th November 1998. This is the closing date for the transaction with DBS. (d) POSBank will still be in the Fifth Schedule on this transfer date. As the Government and POSBank are satisfied that the transfer of POSBank's undertakings to DBS is at fair market value, and thus will not result in any drawdown on past reserves, the President's approval is not required for the transaction. Nevertheless, given the size and importance of this transaction, the Government has kept the President's Office fully informed of the details of the transaction. It has also informed the President's Office that it will treat all proceeds received from the sale of POSBank as the past reserves of the Government. (e) On the transfer date, POSBank will receive new DBS shares as consideration for transferring its undertakings to DBS. It will also still have residual assets that have not been transferred to DBS. (f) On or after the transfer date, all of POSBank residual assets and DBS shares will be transferred to the Government, in a manner consistent with the constitutional safeguards. I, as Minister for Finance, will give an undertaking to the President in accordance with Article 22B(9) of the Constitution to transfer assets, (including all the new DBS shares) which comprise POSBank's past reserves to the past reserves of the Government. These past reserves will comprise the new DBS shares, and part of POSBank's residual assets. (g) POSBank's current reserves will also be returned to the Government. The Government will voluntarily treat these assets received from POSBank as past reserves of the Government.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The Bill before the House deals with the amendment of the Constitution to delete POSBank from the Fifth Schedule to the Constitution. The Fifth Schedule lists six key statutory boards, which are MAS, BCCS, HDB, CPF Board, JTC and POSBank, and three Government-linked companies (GLCs) and these are GIC, MND Holdings and Temasek Holdings, whose past reserves are protected by the Constitution. These statutory boards and GLCs are required by the Constitution to ensure that their past reserves are not drawn down without the approval of the Elected President. POSBank is presently in the Fifth Schedule. With its privatisation and subsequent dissolution, POSBank will have to be deleted from the Fifth Schedule. In keeping with the spirit of the Constitution, the Government will remove POSBank from the Fifth Schedule only after all of POSBank's assets have been transferred back to the Government and safeguarded in accordance with the requirements applicable to Fifth Schedule entities. The President has agreed to this arrangement. The transfer will be done in the followings steps: (a) Two Bills have been tabled before Parliament, which are the Post Office Savings Bank of Singapore (Transfer of Undertakings and Dissolution) Bill and the Constitution of the Republic of Singapore (Amendment No. 2) Bill. Both Bills are to be read for the Second and Third time at today's Parliamentary sitting. (b) Once the President has assented to the Bills, the Government will bring into force the Post Office Savings Bank of Singapore (Transfer of Undertakings and Dissolution) Act first, but not the Constitution (Amendment No. 2) Act.”
“The Schedule ordered to stand part of the Bill.. Bill reported with an amendment, read a Third time and passed. CONSTITUTION OF THE REPUBLIC OF SINGAPORE (AMENDMENT NO. 2) BILL Order for Second Reading read.”
“Sir, I beg to move, In page 13, after line 16, to insert - "(7) The Bank and the persons to whom section 47(3) of the Banking Act (Cap.19) applies may disclose information regarding the particulars of any account transferred to the Bank and the affairs of the customers of that account which the bank normally obtains permission from its own customers to disclose in accordance with its practice as at the transfer date and, in particular, the Bank and such persons may disclose information relating to any such accounts or affairs - (a) where the account relates to a staff loan granted to the customer under his employer's staff loan scheme administered or funded by POSB, Credit POSB or the Bank, to that employer of the customer for the purposes relating to that loan and any security therefor; and (b) where the account relates to a loan secured by any property or other asset, to the insurer or proposed insurer of that property or other asset for the purposes relating to the insurance of that property or asset, and the customer shall be deemed to have given his written permission for all such disclosures.". The reason for the amendment to clause 7 is to allow DBS to disclose information to POSBank and Credit POSB accounts after the transfer provided that this is for information that DBS will normally be allowed to disclose to its own customers. In particular, the amendment will also allow DBS to disclose information to employers for staff loan purposes and insurers for insurance policies. The amendment will treat the customer or transferee account as having given it permission for such disclosures. Amendment agreed to. Clause 7, as amended, ordered to stand part of the Bill. Clauses 8 to 19 inclusive ordered to stand part of the Bill.”
“I will answer this when we come to the next Bill. Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Dr Richard Hu Tsu Tau]. Bill considered in Committee. [Mr Speaker in the Chair] Clauses1 to 6 inclusive ordered to stand part of the Bill. Clause 7 -”
“Instead, POSBank's quality image will be preserved, together with its coverage network. I think I have answered the question raised by Dr Vasoo. I have also answered most of Mr Chew Heng Ching's questions, including the question raised by Mr Iswaran. I hope Dr Toh See Kiat is satisfied with the answers I have given so far. Because a lot of what he said was also covered by the other Members. I do not think I really need to respond to Dr Tan Cheng Bock. He has helped me to answer most of the questions.”
“However, one issue which has not been raised, but I will mention here, is that the MAS is studying the possibility of introducing a limited form of deposit insurance for banks in Singapore to provide an added measure of protection for small depositors. This would be in the context of Government's intention to open up the domestic banking sector gradually to more foreign competition. The issue is a complicated one and we would not want to rush into it. But it is certainly an option we can consider. I believe that Mr Chiam has misunderstood the tax exemption scheme. The phase-out of tax exemption over six years applies to all depositors, not just to persons below 21 and national servicemen. However, post merger, children, students under 21 and full-time national servicemen are the three categories of customers who will continue to be allowed to open savings accounts without a service charge. Mr Chiam also asked why POSBank was not sold by tender. I have explained earlier that the sale was not treated as a purely commercial transaction. In a sale by tender, POSBank would be sold to any bank which offered the highest price. This was not Government's intention. We wanted to select a bank which could best meet and implement our objectives. As Government had a controlling interest in DBS, there was assurance that DBS, as the acquiring bank, would be best placed to continue to maintain POSBank's social obligations. Once DBS was selected as the potential partner, negotiations for the sale and purchase price was conducted along commercial lines. Mr Rai recommends that after the merger, DBS should emulate POSBank in providing a high quality of service to its customers. I can assure him that the intention is not to degrade the quality of service.”
“The request for the phase-down to be extended from four years to six years, in case the downturn should go beyond the four-year period, would not be fair in that the four-year phase-down was agreed by DBS at the time the sales agreement was signed in July. Changing the terms now would impose an unfair new burden on POSBank. Furthermore, if the economic situation in Singapore should remain bad or even deteriorate after the four-year grace period, we would all indeed be in very serious trouble, in which case it is not just the Credit POSB's borrowers which Government needs to help but the entire Singapore population. So I think we will face that problem when we see it. I do not believe, therefore, we should vary the terms. I will now deal more specifically with the individual questions raised by Members, although some of these have already been covered by what I have said. Mr Leong Horn Kee wants to know whether the removal of Government's guarantee would mean that the new entity would be as safe as POSBank. Obviously, it cannot be as safe as a 100% Government guarantee. But, in practice, I should point out that no commercial bank has ever received a Government guarantee nor does it need to do so in Singapore. Singapore maintains a very tight supervisory oversight on its commercial banks and banks are encouraged to be very careful on their investments and ensure that the security of their depositors' funds is always adequately looked after. There is no reason for savers in the new bank to have concern over the potential for losses to their accounts.”
“Some concern has been expressed as to why the tax exemption period should not be extended. I think six years is more than adequate - three years of tax exemption for all POSBank deposits followed by another three years of tax exemption for the first $100,000 of deposits. It is only by the year 2005 that all tax exemption is entirely removed. We cannot allow, of course, the combined bank to enjoy tax exemption indefinitely because it would be unfair to the other commercial banks. On the question of Credit POSB's mortgage interest rates which are now between 1.5% and 1.75% lower than commercial bank rates, we have said that Government's policy is not to subsidise purchasers of private property. Government subsidies for housing are extended through the HDB housing programme and this is unaffected by the changes in Credit POSB's mortgage interest rates. Dr Tan Cheng Bock has already quoted some published figures which show that the great bulk of the borrowings through Credit POSB is by people buying condominiums and private properties in the range of $460,000, going as high as $1 million. Persons with loans of this size are clearly not from the low-income groups and it is not Government's policy to continue to subsidise such loans indefinitely. The reason why they are currently enjoying lower interest rates is because of the special circumstances of POSBank in which restrictions on its investment opportunities have driven them to gain market share in the housing loan market by offering lower mortgage interest loans through Credit POSB. A phase-down period of four years is considered to be reasonable.”
“In addition, it is also undertaking to retain all POSBank staff on current conditions and there would be no redundancies. Of course, they cannot guarantee this over the long term, because conditions change. But there is no intention of letting anybody become redundant. I share his sentiments about the loss of an icon. It is indeed an institution which is so well known that you see it everywhere. But it is just the thought of an icon lost, because many features of the icon will remain, including the logo and the quality of service which POSBank has built up. Another question asked by Members was why Government selected DBS as the marriage partner instead of getting the best value by tendering the POSBank to all. The reason is that this particular merger did not start off with a purely commercial intent. We were not out to maximise the profits to the Government. The objective, as I have explained earlier, was to build on Government's wish to develop a strong bank in Singapore, and at the same time we wanted to ensure that the range of POSBank's services would be maintained as far as possible. Of course, over time, some things will have to change but, by and large, the best features will be maintained for as long as feasible. The combined bank, headed by DBS, will ensure that POSBank's social functions are retained, and this includes the provision of affordable banking services to small depositors. DBS has also agreed to phase down the mortgage rates currently extended to Credit POSB's borrowers over an extended period of time. The tax exemption features of POSBank will also be phased out over six years. These concessions will allow DBS to commit to the maintenance of POSBank's social function as part of the purchase and sales agreement.”
“Mr Speaker, Sir, I thank all the Members who have spoken in support of the Bill, especially Dr Tan Cheng Bock who, in fact, answered half the questions I intend to answer. I particularly join him in thanking the POSBank's staff for their sterling service over the years. The one feature which has been commonly raised by all Members here who have spoken today is the seeming loss of an icon, and there is some suggestion that somehow after the merger, POSB just fades away. I can assure Members that is not the case. The merger or the combination of these two banks achieves a very important objective. It is Government's policy to encourage the growth of strong Singapore banks, and this particular combination is a beginning, so that we have a Singapore bank which can compete effectively in the region and in the world. POSBank was chosen to be married to DBS because they have complementary strengths. POSBank has a very large retail network and extensive coverage. Therefore, it is an excellent retail bank serving a whole spectrum of small and large customers. On the other hand, DBS is a very strong commercial bank with strong corporate accounts. So the merger and the fit is excellent. And I can assure the House that it is not the intention of DBS - I hope they remember this - to make POSBank disappear. Instead, it will build on its strength to retain all the good features of POSBank in order to add to its attractiveness as a combined bank. Certainly the network, the ATMs, will be maintained and DBS has assured us that it will continue to provide services for the small depositors and indeed children up to 12 years, students up to 21 years and full-time National Servicemen will all continue to be able to have a POSBank account without a service charge.”
“The preference shares will be convertible on a 60(Local):40(Foreign) ratio so as not to upset the existing Local/Foreign tranche balance. (f) Clause 18: Repeal of the POSBank Act. This Bill will repeal most sections of the existing POSBank Act with effect from the Transfer Date. However, certain sections of the Act will still be retained, and will only be repealed upon POSBank's Dissolution Date. This is to allow POSBank to remain as a shell statutory board to see through the disposal of its residual assets and to finalise any management issues remaining. (g) Clause 19 and the Schedule: Consequential amendments to other laws. The Income Tax Act will be amended to allow for the extension of tax exemption on POSBank savings deposits, for both existing and new POSBank accounts. Consequential amendments are also made to other Acts. Sir, I beg to move. Question proposed.”
“To put POSBank customers on the same footing as existing DBS customers, DBS can write to every POSBank customer to seek written permission, but it would be obviously impractical to do so. There is no guarantee that these customers will agree or even bother to reply to give consent. This clause therefore allows DBS to disclose information only for the administration of POSBank customers' accounts, and only insofar as it is in line with DBS' existing practice. I should point out that in practice, this clause is not a material change because POSBank has had, and has been disclosing such information to third parties all these years where required in the normal course of its work. The proposed amendment essentially ensures that DBS would be able to administer the POSBank accounts after the transfer, in a manner which complies with the Banking Act and with minimal inconvenience to POSBank's 3 million customers, so that the transfer of POSBank to DBS is as seamless as possible. (d) Clause 8: Staff provisions. As with other privatisation exercises, all POSBank and Credit POSB staff would cross over to DBS at existing terms and conditions of service. DBS has stated that, as far as possible, it will retain and re-train POSBank staff, to provide them with better prospects and broader career opportunities. (e) Clause 15: Consideration shares. DBS' purchase consideration would be offered to the Government in the form of non-voting preference shares, instead of ordinary voting shares. These preference shares enjoy the same dividend rate as ordinary shares. They will not be listed on the Stock Exchange, but would be convertible to ordinary shares which can then be sold. However, the Government has committed not to sell the shares until 2002 at the earliest.”
“(b) Clause 4(3): Excluded assets and liabilities DBS will not be taking over all the undertakings of POSBank in this transaction. There will be some assets and liabilities left with the Government, including the POSBank Tower and some equity and bond investments. DBS has asked the Government to retain POSBank Tower, which is still under construction, as DBS has no need for another large Headquarters Building. The equities and bonds held back by the Government are to enable DBS to comply with section 31 of the Banking Act, which requires that the investments of a bank should not exceed 40% of its capital funds. The assets retained by Government amount to about $1 billion. The list to be specified under this clause spells out the assets and liabilities that are being retained by the Government; all other assets and liabilities will legally be transferred to DBS. (c) Clause 7(7): Supplementary provisions on disclosure of information The secrecy provisions contained in section 47 of the Banking Act, which does not apply to POSBank prior to the transfer, forbids banks to reveal any information on their customers' accounts, unless, among other conditions, the customer or his personal representatives had given written permission to do so. Therefore, POSBank's terms and conditions for its accounts as well as Credit POSB's loan agreements, unlike the commercial banks, generally do not contain disclosure authorisation clauses. The POSBank accounts, including Credit POSB's loan portfolio, to be transferred to DBS will be subject to this provision. Like most banks, DBS obtains its customers' written consent as a standard feature in its account documents and loan agreements.”
“This four-year transition is more than fair. No better alternative to merging with DBS A viable future for POSBank requires it to be competitive with full banks. But the financial services environment today is a very tough place. With rapid developments in the variety and complexity of financial products, banks can only compete effectively by having the strength to carry increased market and currency risks, and larger asset size to reap economies of scale. This is why the Government has been encouraging our local banks to consolidate. Within this framework, it makes most sense for POSBank to merge with a successful local bank than to strike out on its own. This route would best enable it to serve its customers better. This would of course also help set the pace for the other banks. DBS was a natural choice as the most suitable partner for POSBank. Since the Government is a major shareholder of DBS, it can be more confident that DBS will preserve the spirit of POSBank's social responsibilities. The merger will at the same time significantly strengthen Singapore's banking sector for international competition. Specific provisions of the Bill I shall now proceed to explain the specific key provisions of the Bill, which are: (a) Clauses 3 and 18: Transfer/Dissolution dates Instead of the usual practice of dissolving the statutory board and simultaneously transferring all the assets and liabilities to the successor company, the transfer date and the dissolution date will be distinct. This is to allow Government to comply with Presidential safeguards on the protection of reserves, which will be covered in the Second Reading speech on the Constitution of the Republic of Singapore (Amendment No. 2) Bill.”
“The tax exemption therefore ended up benefiting only 15% of POSBank's depositor base, primarily the large depositors with high income and high marginal income tax rates. This is not the group that the tax exempt status was intended to help. We are therefore no longer serving the original policy intent. To compound the problem, Government had imposed constraints on POSBank's investment and lending activities in the belief that POSBank's tax exempt status should not unfairly disadvantage the commercial banks. This led to product limitation, low savings interest rates, and a lack of alternative uses for its deposits. This in turn resulted in Credit POSB pricing its mortgages below market rates, in its drive to gain market share within POSBank's limited scope of business. In effect, the good intentions of the tax exempt status had resulted in Government providing subsidised mortgage financing for private housing. This was not Government's intention. There is little public policy justification for it. The Government recognises that these market distortions have to go. However, to ease the burden of adjustment in this privatisation exercise, we are taking care to ensure that painful disruptions for POSBank's depositors and borrowers are minimised. We therefore set out a transitional arrangement to help all parties adjust over time. For depositors, the removal of tax exemption will be phased over a period of six years; it will be entirely removed only from 1st January 2005 onwards. To ease the burden of adjustment for existing borrowers, the Government has asked DBS to maintain the differential gap between POSBank and DBS mortgage rates of between 1.5% and 1.75% until the end of 1999, and thereafter to close it gradually over a three-year period.”
“For instance, when the gap in interest rates on savings deposits between POSBank and commercial banks increased last year, these depositors were quick to move their deposits to the commercial banks. Government has concluded that the idea of a limited function savings bank is largely out of step with the times. There can be a continuing role for POSBank, but only if it is competitive with full banks. We believe that enabling it to compete as a full bank via merger with DBS is the best way forward. This would enable Government to lift the fetters that have constrained its operations and distorted market signals and consumer behaviour. It is also useful to note that most developed countries, and many of our Asian counterparts, no longer operate post office savings banks or national savings banks. The list includes USA, Australia, New Zealand, Hong Kong, Taiwan, and Indonesia. Norway and Germany's national savings banks are also being privatised, with commercial banks likely to take control. In the region, only India, Japan and Thailand still operate national savings banks. Transitional arrangements The tax exemption on POSBank deposits is one example of how the constraints on POSBank, built up over time, had led to a situation where our regulations increasingly risked losing their original purpose. The reason for granting POSBank's tax exempt status was to encourage small depositors to save. However, over the years, personal income tax rates have been brought down to such a degree that nowadays, most small depositors no longer pay any income tax, and so do not benefit from the tax exemption. POSBank's data show that some 85% of their depositors do not pay income tax.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The Bill before the House mainly deals with the transfer of the undertakings and employees of POSBank and Credit POSB to DBS, the dissolution of POSBank and the repeal of the Post Office Savings Bank of Singapore Act. It transfers POSBank's existing property, rights and liabilities to DBS, excluding a list of assets and liabilities and makes the necessary arrangements for the transfer. The Government announced the privatisation of POSBank and its acquisition by DBS for $1.6 billion on 24th July 1998. DBS will pay for it with new non-voting convertible DBS preference shares. I would now take the House through the rationale underlying the privatisation of POSBank. Rationale for privatisation POSBank was set up in 1972. Its specific purpose was to promote thrift and saving among Singaporeans. POSBank has fulfilled this function very well. The objective of encouraging savings remains valid today. However, the banking environment has changed substantially since POSBank's inception more than 25 years ago. The large mass of depositors now have access to the local retail banks, which are able to offer them a full range of competitive services. Not being a commercial bank, POSBank cannot offer the full range of services such as fixed deposits, foreign currency deposits, asset management services and so on. At the same time, it is facing tough competition in its core business, ie, its deposit-gathering business, which it is not in a strong position to counter. POSBank's depositors have become more sophisticated. As other banking avenues have opened up, they are much more aware that they may be better served elsewhere.”
“Mrs Yu-Foo Yee Shoon asked the Minister for Manpower what is the latest unemployment figure; what is the success rate for the job placement service that his Ministry provides; and how many workers have been able to find jobs through this service.”
“The Government has also established a $50 million Technology Development Fund (TDF) which co-invests with private venture capital firms to fund early stage ventures. Other similar funds include the $100 million Technology Commercialization Fund and the $100 million Pharmaceutical and Biotechnology Growth Fund. EDB Investments Pte Ltd, a subsidiary of the Economic Development Board, also runs venture capital funds that invest in start-up companies at various stages of development. As to the concern on the avenues open to local enterprises to develop partnerships with GLCs, I would like to point out that GLCs have been forming partnerships with smaller local enterprises for regional projects. However, the test is in the degree of complementarity between the specific needs of the GLCs and the capabilities of the SMEs. We should not force a pace beyond what commercial reality dictates. The Government has also been facilitating the development of partnerships between the GLCs and smaller Singapore companies. An example is through the business interaction and networking made possible at Trade Development Board trade missions. GLC/SME partnerships are already beginning to happen on the ground. For example, STIC, a GLC, has brought its core group of suppliers to Wuxi in China and paved the way for the latter to form business tie-ups with our suppliers there. Sembawang Shipyard has brought a number of local contractors to support their Karimun yard in Indonesia. Another example is PSA helping local companies bring their port-related innovations to overseas ports that PSA has invested in. UNEMPLOYMENT AND JOB PLACEMENT 6.”
“Mr Speaker, Sir, a number of policy changes and programmes have already been implemented to nurture an entrepreneurial business environment in Singapore. Our bankruptcy laws went through a major reform in 1995. One of the primary objectives of the new Bankruptcy Act was to encourage entrepreneurship, especially in cases where bankruptcy had arisen from misfortune rather than malpractice, by having a more liberal regime in bankruptcy discharges. With the liberalization, bankrupts are also encouraged to work towards an early discharge. The law was also amended to enable the Official Assignee to discharge more bankrupts by certificate. Further studies are currently being undertaken to determine if additional changes are necessary. The Government has also appointed a Corporate Finance Committee under the Financial Sector Review Group, which is currently looking into ways to facilitate the listing of start-ups on the stock exchange. Details will be released in due course. In addition, the Government has also been actively promoting the venture capital industry in the mid-1980s. As at the end of 1997, there was over $7.7 billion worth of venture capital funds managed in Singapore. Currently, these funds enjoy tax exemption on the gains from disposal of investments, and on certain investment incomes for a maximum of 10 years. To further encourage the growth of the venture capital industry, I have announced in this year's Budget Statement that the current 10-year limit will be extended, on a case-by-case basis, by up to a further five years, at a concessionary tax rate of not more than 10%. This will encourage venture capital funds to take a longer-term perspective of their investments and to minimize premature divestment.”
“Mr Tay Beng Chuan asked the Minister for Finance (a) what kind of fiscal measures or policy changes the Government will introduce to nurture an entrepreneurial business environment in Singapore; and (b) what avenues are open to local enterprises to develop partnerships with Government-linked companies in order to capitalise on emerging opportunities in the region.”
“Mr Speaker, Sir, the share buy-back proposal is in fact included in the Companies (Amendment) Bill 1998 being tabled today. It had been developed after extensive consultation with the Stock Exchange of Singapore (SES), the Association of Banks of Singapore (ABS), the Singapore Merchant Bankers' Association (SMBA), the Law Society, companies and industry participants. The proposal will be implemented when Parliament has discussed and agreed to pass the Bill, which will hopefully be in November or earlier. The amendment, if passed, will allow the purchase or acquisition by a company of its own shares, without having to apply to court for approval. Currently, a company can only return capital to its shareholders by way of a capital reduction under section 73, which requires confirmation by the High Court. This can be a time-consuming and expensive process. Capital reduction also does not give listed companies the same flexibility as a share repurchase in terms of the method, timing and amount of capital to be returned to shareholders. Appropriate safeguards and disclosure requirements have been incorporated in the proposed amendments to ensure that share buy-backs by companies will not be abused to the detriment of shareholders and creditors. The details are set out in the Companies (Amendment) Bill 1998. Additional safeguards for public listed companies will be formulated by the Stock Exchange of Singapore as part of its listing rules. NURTURING OF ENTREPRENEURIAL BUSINESS ENVIRONMENT (Introduction of fiscal measures) 5.”
“The question is slightly outside the ambit of the question. However, I do not think that the ringgit holdings should be used for specific purposes because we can fund all our aid projects from our normal pool of funds. On the question of the status of our ringgit deposits, the Prime Minister has already said that the Government has several billion dollars worth of ringgit in its reserves. Some of these ringgit are in the form of on-shore deposits placed with Malaysian banks in Kuala Lumpur. But the bulk of it is held in ringgit deposits in Singapore banks. The GIC is currently seeking clarification from the Malaysian authorities on the status of our on-shore ringgit deposits and GIC is also discussing with our local banks on ways in which the ringgit deposits can be repaid to the Government. However, whatever the outcome of these discussions, I can assure the Member that the GIC will not suffer any capital loss on its ringgit holdings. BUY BACK OF COMPANY'S SHARES (Implementation) 4. Dr Ker Sin Tze asked the Minister for Finance whether he will consider allowing companies to buy back their shares from the market and, if so, whether such a scheme will be implemented in the near future.”
“The Assistance Schemes comprise seven support programmes for Overseas Project Identification, Overseas Project Implementation, and two support funds for Joint Venture Feasibility Studies in third countries. The aim is to provide selective aid in the form of economic incentives - mainly grants and financing schemes - for local enterprises to undertake meaningful and viable development projects and other investments. These will in turn help generate employment and contribute towards economic development in these countries. In FY97, the Government spent approximately S$18 million on the Regionalisation Assistance Schemes. In respect of humanitarian aid, the Government has offered support in cash and kind towards humanitarian relief in various disasters around the world. These have typically been on the scale of tens of thousands of dollars. None have been of the magnitude of the S$12 million worth of rice and medicine Singapore is offering Indonesia over and above the S$5 million raised by the Singapore Red Cross.”