Income-Allianz deal: NTUC central committee did not know about capital reduction plan, says Desmond Tan
SINGAPORE: The central committee of the National Trades Union Congress (NTUC) only knew about the capital reduction plan in the proposed deal between Income Insurance and Allianz when it was announced in parliament, said deputy secretary-general Desmond Tan on Wednesday (Oct 16).
“In fact, the central committee and myself only knew of this on Monday at the ministerial statement,” said Mr Tan, who is also senior minister of state in the Prime Minister’s Office.
Desmond Tan explained that NTUC Enterprise holds a 72.8 per cent stake in Income Insurance, with NTUC being a major shareholder, but not involved in the day-to-day running of operations. He disclosed that while the central committee was briefed on the “strategic imperatives” for the deal, the capital reduction plan was not highlighted to them.
“And as I’m made aware now, from clarifications with (NTUC Enterprise) and Income, Income as a non-listed public company would have to comply with the legal responsibility of non-disclosure of commercially sensitive information on Allianz’s plans post acquisition … because as a non-listed public company … Income is subject to the Singapore code of takeover and mergers.”
The proposed Income-Allianz deal aimed to decrease the capital held by Income, returning some S$1.85 billion to shareholders within three years.
Consequently, the NTUC leadership came under scrutiny from Members of Parliament questioning their knowledge of the deal. Nominated MP Raj Joshua Thomas raised concerns about whether the NTUC leadership had been briefed on the proposed initiative to reduce share capital. He stated, “I think that Income has a bit of explaining to do.”
Non-Constituency MP Leong Mun Wai also probed into whether NTUC’s leadership was fully briefed on the details of the transaction, including the capital reduction plan.
Minister Edwin Tong informed parliament that the government had blocked the proposed deal, with concerns raised over the preservation of Income’s social mission. While the government rejected the deal in its current form, it remained open to new arrangements if the issues of public interest were addressed.
NTUC emphasized their commitment to the social mission of Income, stressing the importance of providing low-cost insurance schemes and affordable premiums for lower-income workers. They reiterated their focus on the well-being of workers and accepted the government’s decision regarding the proposed transaction.
In conclusion, NTUC and other union leaders met with government officials to discuss the implications of the deal being blocked. Labour chief Ng Chee Meng stated, “Our unwavering focus is on the well-being of our workers, and we will continue to put our workers first in all we do.”
