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The Corrupt Practices Investigation Bureau (CPIB) has found no evidence of corruption or preferential treatment given to Ministers K Shanmugam and Vivian Balakrishnan.

The report detailed that Minister for Law and Home Affairs K Shanmugam pays S$26,500 a month for the rental property at 26 Ridout Road.

Senior Minister Teo Chee Hean's report and a report by CPIB were submitted to Prime Minister (PM) Lee Hsien Loong, said the Prime Minister's Office (PMO) in a press release on Jun. 28, 2023.

The CPIB report found no evidence of corruption or criminal wrongdoing by the ministers.

In its report to PM Lee, CPIB found no preferential treatment given to the ministers and their spouses, and no disclosure of privileged information in the process of the rental transactions.

There was no evidence to suggest any abuse of position by the ministers for personal gain, CPIB noted.

S$26,500 guide rent

CPIB revealed in its Jun. 28, 2023 report that the black and white bungalow's guide rent was assessed to be S$26,500.

It was tasked to investigate and determine whether Shanmugam and Vivian had committed a breach in their renting of the Ridout Road state properties.

Teo was also instructed to conduct a separate review to address the wider potential process or policy issues, which go beyond the scope of CPIB’s investigation.

Shanmugam and agent unaware of S$26,500 guide rent

With regard to 26 Ridout Road, CPIB said neither Shanmugam nor the property agent that he appointed in January 2018 was aware of the guide rent.

The guide rent is assessed by the Singapore Land Authority (SLA) and is the minimum rental to be achieved.

His agent studied the rental of comparable neighbouring properties, and independently determined and valued the rent.

Shanmugam also instructed his property agent that he should not be paying less than his neighbours.

A neighbouring unit was tenanted at S$26,000.

The final negotiated rent amount was $26,500, which met the minimum rental to be achieved by SLA.

Offered to maintain adjacent land

SLA assessed 26 Ridout Road's initial guide rent to be S$24,500, but added another S$2,000 to recover the amortised cost of works to clear and incorporate the additional land.

During a site visit, Shanmugam noticed an empty slope of land adjacent to 26 Ridout Road that had thick and overgrown vegetation.

Concerned that the overgrown vegetation might pose public health and safety risks, he negotiated with SLA through his property agent for the adjacent land to be cleared before his leasing of 26 Ridout Road.

He did not want to lease the additional adjacent land but offered to maintain the adjacent land at his own cost.

SLA felt that it is not a tenant’s responsibility to maintain beyond their rental property's boundary.

However, since Shanmugam was maintaining the adjacent land at his own cost, SLA decided to incorporate the adjacent land into 26 Ridout Road's property boundary, thus increasing its land size from 9,350 sqm to 23,164 sqm.

Paid for car porch and additional improvement works

According to CPIB, SLA paid S$172,000 to clear and fence the adjacent land, and replant greenery, after receiving approval from the National Parks Board to clear the adjacent land, and the agency will eventually recover these costs from Shanmugam's rent.

As such, SLA valued the guide rent, or minimum rental, of 26 Ridout Road, including the additional cleared land, at S$26,500.

Shanmugam will be paying approximately S$25,000 per year to maintain the cleared land.

This was also the final rent amount that Shanmugam's agent negotiated, who independently determined and valued the S$26,500 monthly rent after studying the rental of comparable neighbouring properties.

SLA also paid S$515,400 for essential repair works to restore 26 Ridout Road, which has been vacant since December 2013 and has fallen into disrepair.

According to CPIB, landlords have the responsibility to undertake essential repair works to ensure that the condition of the property is habitable.

Shanmugam paid S$61,400 to build the car porch and over S$400,000 for additional improvement works that were not covered by SLA’s restoration works.

Additionally, no approval was required for the installation of the swimming pool at 26 Ridout Road.

Signed 3+3+3

CPIB said that these improvements will be surrendered to SLA as is, without any right of claims or recovery of costs by the tenant, upon the lease's expiry, as per SLA's policy.

Shanmugam's wife signed the tenancy agreement of 3+3+3 years for 26 Ridout Road in June 2018.

CPIB said that due diligence checks were also done before the tenancy agreement was signed.

Recused himself

It said the then SLA chief executive made a declaration dated Mar. 29, 2018 to the then Ministry of Law (MinLaw) permanent secretary and reported that the processing of the rental transaction was properly done with no conflict of interest.

The SLA chief executive also assured the MinLaw permanent secretary that the proposed rental was according to market rate with assessment by SLA valuers independently of the SLA leasing officers, and confirmed that the tenancy agreement was a standard form for all other residential tenancies.

Shanmugam informed the then Deputy Secretary of MinLaw that he would recuse himself from any discussion related to the rental of the property.

Shanmugam also instructed the Deputy Secretary to approach the then Senior Minister of State Indranee Rajah in the event that any matter had to be referred to the minister.

Shanmugam also informed Teo if the matter had to go beyond Indranee, she would approach Teo.

CPIB said there was no matter raised by SLA to MinLaw during the entire rental process.

Wife renewed second term

Shanmugam's wife renewed the tenancy for a second three-year term after the first term in June 2021.

SLA considered the prevailing market conditions and determined that the rental was to be maintained at S$26,500 per month.

Top image by Mothership and from Google Maps