Business
Concerns over conflict of interest and corporate governance arise in Income’s sale to Allianz
Morgan Stanley’s role as financial advisor for Allianz’s purchase of Income Insurance raises concerns due to Mr Ronald Ong’s dual roles as Chairman of Income and a high-ranking executive at Morgan Stanley.
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The proposed sale of Income Insurance to German multinational financial services company Allianz has sparked significant public discontent and raised serious questions about corporate governance within the organization.
Industry experts and concerned citizens have voiced worries about potential conflicts of interest and the future of the homegrown insurance company.
Corporate Governance Questions
According to Income’s statement on 17 July, Morgan Stanley is named the exclusive financial advisor to Income Insurance on the purchase offer by Allianz Europe of 51% of Income’s shares for approximately US$1.6 billion.
The offer includes S$40.58 per share, resulting in a transaction value of S$2.2 billion (US$1.64 billion) for 51 percent of the shares in Income Insurance. NTUC Enterprise, currently holding a 72.8 percent stake in Income, will remain a substantial shareholder if the sale is finalized but will no longer be the majority shareholder.
Morgan Stanley’s role as the exclusive financial advisor for the transaction has come under scrutiny due to the involvement of Mr Ronald Ong, the Chairman of Income Insurance Limited, who also holds a high-ranking position at Morgan Stanley.
Mr Ronald Ong has been with Morgan Stanley for over 20 years and currently serves as the Chairman and CEO for Southeast Asia.
His dual roles have prompted questions about the integrity of the decision-making process behind the appointment of Morgan Stanley as the financial advisor.
Mr Ong was co-opted to the Board of NTUC Income Insurance Co-operative Limited on 23 August 2018 and later elected as a non-independent non-executive director on 24 May 2019.
Since 1 August 2022, he has been the Chairman of the Board and Board Executive Committee of Income Insurance Limited.
Additionally, he serves as a Board Member of NTUC Enterprise Co-operative Limited, the majority owner of Income Insurance.
Concerns about potential conflicts of interest were highlighted by authoritative voices in corporate governance.
Professor Mak Yuen Teen, a corporate governance expert and former Vice Dean of the NUS Business School, expressed his astonishment on LinkedIn.
“So his firm is the financial advisor, and he’s chairman of Income and chair of its exco, and director of Enterprise. I certainly hope he’s not involved in the decision to appoint MS [Morgan Stanley] as financial advisor as MAS CG guidelines for FIs state that directors should recuse if they have a conflict of interest,” he wrote.
Retired banker Chris Kuan also voiced his concerns on Facebook, highlighting the potential conflict of interest involving Mr Ong and other key figures in NTUC Enterprise.
Kuan stated, “Thanks to a Biz Times, we now know that Income’s chairman is on the board of NTUC Enterprise, the majority owner who sold to Allianz. Income’s deputy chairman is NTUC Enterprises’ CEO. NTUC Enterprises’ best interest may not be in the best interest of Income, having these executives from NTUC Enterprises in key decision-making positions of Income in the event of a sale is a clear conflict of interest and can only be resolved if the two of them recuse themselves from the decision to sell 51% of Income.”
Kuan elaborated on the complexities of the situation, drawing parallels with past instances of conflicts of interest in the financial sector. He emphasized the need for transparency and proper governance to maintain the integrity of the financial market in Singapore.
Corporatisation and Opposition
The transition from a co-operative to a corporate entity has also raised significant concerns.
Established in 1970 as the first co-operative society by Singapore’s labour movement, NTUC Income maintains a social mission to provide affordable insurance to workers and families.
Formerly known as NTUC Income Insurance Co-operative before corporatisation in September 2012, it was the only insurance co-operative in Singapore, serving around 2 million customers with life, health, general insurance, and investment-linked products.
Tan Suee Chieh, who previously headed NTUC Income and NTUC Enterprise, posted on his LinkedIn page that he was informed in a letter from NTUC Income that NTUC Enterprise’s majority stake would be maintained after corporatisation.
In his post, Tan wrote, “Income has not only reversed its 2022 commitment to maintain NE as the majority shareholder, but NE would also crystallise a significant capital gain through the sale of its shares. This gain, I argued in 2022, should be more fairly distributed to those shareholders who invested before NTUC Enterprise’s capital injection in 2015-2020.”
Tan stated that he advocated “for a fairer distribution of equity gains for shareholders who invested before NTUC Enterprise’s capital injection, but without success.” He brought his concerns to the Monetary Authority of Singapore, which shared them with the Registrar of Cooperatives. However, the Registrar of Cooperatives declined to intervene.
In early 2022, during an extraordinary general meeting to discuss corporatisation, NTUC Enterprise indicated to Income’s board that it would remain a majority shareholder and was committed to supporting Income in terms of maintaining sound liquidity and a solid financial position.
The minutes of the meeting documented, “Post-corporatisation, NTUC Enterprise will continue to be the majority shareholder of the new company, Income Insurance Limited.”
While the Business Times reported that NTUC Enterprise showed indications that if a strategic shareholder better able than NTUC Enterprise supports Income’s growth, NTUC Enterprise may cede its position as the largest shareholder, this was not clearly indicated to shareholders or the public.
Public Discontent
In addition to corporate governance concerns, the proposed sale has stirred public discontent.
In a Facebook post on Tuesday, Dr Tommy Koh, Ambassador-At-Large at the Ministry of Foreign Affairs and Chairman of the Institute of Policy Studies, voiced his opposition to the proposed sale. Dr Koh highlighted the origins of NTUC Income, stating, “INCOME started life as a cooperative of NTUC like Fairprice. The idea was to offer insurance to the people at affordable rates. A few years ago, it was made into a company and ceased to be a cooperative. Now we are told that it may be sold to a German insurance company.”
Dr Koh further emphasized the social mission of NTUC Income, saying, “I don’t think it’s a good idea to sell INCOME. It was founded to serve a social purpose and a social need. They remain valid today. I wish to argue that INCOME and Fairprice should never be sold.”
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PAP Gagmt should step in now, and strike off the deal….. If they are real concerns about public out cries over the deal.
Obviously, broken promise by NTUC not be sold, as mentioned by Dr Tan Cheng Bock beside other notable figures about destroying the core interests of NTUC, and of common people interest, philosphy.
PAP gagmt is only concern of money, making money.
That why called Pap gagmt is called Singapore INC.
Common people interests are brushed aside, many instances of such cases.
Wakeup Singaporeans before it is too late!!!
Another National Asset Sold:
Sinkies get some small peanuts.
Wow this fellow to be up there at Morgan Stanley, he ought to be quite good.
Hmmm, why is he getting into such silly mess.
Such public outcry against selling INCOME to a foreign entity should give opportunities to Members of Parliament, including both PAP and Opposition, to lend their voices to ensure that such sale must be stopped. MPs are voted by their constituents and need to speak out for them. Where are your voices?
For someone of this position to not to have tt level of corporate self awareness regarding conflict of interest in business, then this entire deal is a KELONG Deal from the start. It smacks of corporate GREED at the highest levels of both the management teams. Shame on NTUC !! Our PM should intervene and get rid of these MONEY RAIDERS !
I am in full agreement with Dr. Tommy Koh that NTUC Income must not be sold at all. I am a long-time customer and supporter of NTUC Income and would not like to lose out as a result of the sale of Income. I have had such bad experience before even when promises were made. But then the company that took over ownership reserved the right to make changes as it wished to maximise profits. I am fully against the sale of NTUC Income.
Whatever done now may well be initiated to divert attention of the public from the management disaster at Income.Substantial losses might have been sustained by Income through failures on the part Income’s Board to mitigate it’s investments overseas in particular CCP China led by the big boys GIC and TH over the years.Unlike GIC,TH and MAS,Income does not have the everlasting financial backing of Sugar Daddies.All these restructuring arranged through the Chair of Income rather quickly read a lot the need to brush aside and put to rest the questions of accountability at top management of Income and NTUC enterprise… Read more »
This is a serious social matter beyond economic decision. It warrants the attention from our prime minister .
White is always clean
> 26 Jul 2024
It is not just abt the costs of Premiums
IT IS ABOUT OUR BIODATA
Which Allianz and insiders could access n sell to do harm on us
Have said many times, when they can kelong a PE, they can kelong anything nowadays. The original building blocks meant to serve Singaporeans (e.g. POSB, HDB, NTUC Fairprice, etc.) are now being capitalized to serve the main shareholders.
Don’t believe “conflict of interest” can be cited as a valid reason, let alone concern, … not especially in SillyPore !!!
Sure, there’ll be the odd few hundred disgruntled voices, but the overwhelming majority have embraced conflicts of interest from the top down, so, … this’ll be just a light storm, which’ll blow over after a week or two !!!
Conflict of interests IS NOT the PAP Administration’s CONCERN when good ethics isn’t one too.
Look at the Commercial side since this is a so called commercial dealing tho PAP Administration’s POLITICAL FINGERPRINT is SO MASSIVELY clear – WHAT listing ENFORCEMENT did the SGX did to Keppel Corpn Briberies and Keppels INDICTMENT, PUNISHMENTS of 100s Millions of DOLLARS of FINES?
Is the SG Stock Exchange a PAP SLAVE or a Service to Investors, to the Public of SG?
Integrity of the decision-making process?
Is there ever such a thing for singapore?
🤣🤣🤣
When Finance Minister is also Prime Minister, when household members are all over in various parts of the system….
Integrity is human-based or system-based?
50 years is just about time we yield the return of man-based trust system that holds neither accountability nor responsibility but only power-unlimited cronies.
It will ultimately goes down someday and bring us all along.
This guy look a dead ringer for the Empress Dowager. One would have thought they are siblings. HOW is it possible that someone can be BOTH the Chairman of Income AND an executive at Morgan Stanley? Oops … is that due to that constitutional amendment to allow the president of Singapore to “moonlight” at another job?
This PAP Administration is VICIOUS ENOUGH – to have the NEED to low-ball DISGUSTINGLY Singaporeans.
Classically PAP has CONTINUE to DISPLAY it’s OBNOXIOUS HATRED for SGpns, even INCLUDING those Voted for them.
What conflict of interest when the model answer is in the recusal to make everything above board. They will have in dependent directors to see the deal through.
They already can sell the country, what other Singapore icon they cannot sell?
I guess there will come a time when all shareholders will have to recuse from voting due to conflict of interest and left with only 1 single shareholder with 1 share as the kingmaker for the deal to either go or fall through.
VTO. VTO.
Conflict of interest exits only if opposition parties are involved.
For any other situations, there is no conflict. end of statement.. and repeated
within the protected walls of Parliament…
PAP must never ever govern Singapore again.
This is an entirely different ballgame altogether. No matter how Lim Boon Heng wants to spin the latest information, the whole deal is already tainted. To me so long as there is even a speck of doubt about the whole due diligence and negotiation process, the deal has to be aborted. And since a serious case of a conflict of interest has risen, the MAS or the Finance Minister cum Prime Minister should order a cancellation of the deal. To insist to proceed will fundamentally show that the G treats its citizens with disdain and that we do not matter… Read more »
Controversey!
BeWare.
The papee “shit” is hitting the fan,how come the decrepit old man of TOMBmasex when he cme out today talking about a good a deal he did not mention potential “cuntflict of interest,& just want to push the deal through!”?????
An off topic but crucial point to emphasize.
Often it’s this saying, that says, when 🇺🇸 sneezes the world catches a cold, and contextually very relevant to SG economy.
Reversely, the 🇺🇸 economy streaming along finely, for many quarters, BUT NOT SEEING SG economy under the PAP Administration doing satisfactorily. Days gone when 🇺🇸 economy acting up 2,3 per cent, SG’s at 5,6 per cent Kuan Yew days. Now 🇺🇸 at 2,3 percent GDP growth, SG’s NO MORE 5,6 percent. This is A BAD INDICTMENT of current PAP hopeless doings.
Any surprises? In the PAP dictionary , “Conflict of Interest, ” doesn’t exist. This is the result of State Organs not being separate from the government. They wouldn’t care and will proceed with the sale. If anyone continues to criticise, they will use POFMA. After which they will take us to Court for damages. Any change must be done at the Ballot Box. At present, due to the poor nos. of Opposition members in Parliament, we have no representation. So the bulldozing will only continue.
The Ridout Road Bungalow SCANDALS has all the Hallmarks of DIRTY businesses. A Recusal was ALL IT TOOK to turn from under board to above board.
Same template, a golden verbal ‘recuse’, legal tender can be used by Politicians. Commercial dealings cannot? Who is playing with fire, and who is kidding who?