Tan Suee Chieh, the former CEO of NTUC Income (now Income Insurance) and NTUC Enterprise, has issued a rebuttal to NTUC Enterprise’s recent clarification. His rebuttal, published on his Facebook and LinkedIn accounts, follows his open letter to the Monetary Authority of Singapore’s (MAS) chairman, Gan Kim Yong, on Aug 2, asking government regulators to review the sale of NTUC Income to Allianz.
On July 30, NTUC Enterprise stated that Income Insurance needs to grow and thrive as an enterprise to fulfill its obligations to its policyholders.
NTUC Enterprise explained that the differences between the circumstances when Income Insurance was founded and today, as well as changes in the competitive landscape, indicate that “strong and continuous capital support and resilience are prerequisites for growth in this competitive environment, which a social enterprise model alone cannot shoulder.”
In his Aug 5 posts, Tan noted that many insurance cooperatives or social enterprises, such as Folksam of Sweden and Co-operators of Canada, are prospering and delivering social impact in their communities worldwide. He pointed out that these cooperatives, similar in size to Income Insurance, did not need to go regional or international or be acquired by a listed company to succeed.
Edwin Tong, Minister for Culture, Community & Youth and Second Minister for Law, also weighed in. In a Facebook post on Aug 4, Tong emphasized that co-operatives, as business enterprises with social missions, must be financially sustainable.
“Social enterprises must achieve this, not as an end in itself, but to better serve their members and social causes in a fast-changing economic environment,” he wrote.
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Regarding the corporatisation of Income in 2022, Tong mentioned that the Registry of Co-operative Societies (RCS) under MCCY had informed all parties that the corporatisation was for NTUC Income and its members to “collectively determine and resolve.”
“What was important was the need to be transparent about the arrangements and to allow Income’s members to decide whether or not to proceed with corporatisation,” he added. “We note that NTUC Income had done so at that time, through consultation with their members at several meetings. NTUC Income had provided the necessary disclosures to members and given ample opportunities for members to seek clarification on the corporatisation plans. Eventually, members voted overwhelmingly in favour of corporatisation.”
As such, the RCS is “satisfied” that due process was followed during the corporatisation exercise.
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Tong further stated that the government values the social mission of NTUC and that all Singaporeans have benefited from NTUC’s co-operatives over the years.
“We look forward to NTUC (and its enterprises) continuing with its social mission to uplift the lives and livelihoods of workers in Singapore,” said Tong.
Former diplomat Tommy Koh, who expressed concerns over the sale in a Facebook post on July 23, stated in another post dated July 31 that he was not convinced by NTUC Enterprise chairman Lim Boon Heng’s reasons behind the sale. Koh listed four reasons, including Income’s mission to make insurance accessible and affordable to the ordinary people of Singapore. He also noted that Income was the first insurance company to provide coverage for children with autism in 2013, a move that a foreign insurance company might not have made.
He pointed out that Income is not a loss-making company in need of a rescue.
“In its 54-year history, it has always been a profitable company. In view of this fact, why does NTUC Enterprise wish to sell Income? Is it because it will make a profit of $1 billion?” he asked.
According to Tong’s post, several Parliamentary questions have been raised about the proposed deal between Income and Allianz, and his colleagues will be answering them in Parliament.
Questions on the sale are set to be asked in Parliament during its next sitting on Aug 6.
Follow The Edge Singapore’s coverage of Allianz and Income Insurance:
- May 23: Singapore’s Income Insurance considering partnerships or stake sale
- June 14: Income Insurance and Allianz hold 'transaction' talks, latest possible Singapore insurance M&A
- July 17: Allianz offers $40.58 per Income share, representing premium of 37.3% over NAV
- July 25: NTUC Enterprise says it remains ‘fully committed’ to Income Insurance in clarification statement
- July 30: NTUC Enterprise issues further clarification statement, stresses its commitment to Income Insurance
- Aug 3: Income Insurance: open letter, global backdrop, redeemable and irredeemable shares
- Aug 4: NTUC Enterprise explains the difference between redeemable and irredeemable shares to former CEO
- Aug 6: Income-Allianz deal saga: From a minority shareholder’s perspective
