Tommy Koh said he agrees with former NTUC Income CEO Tan Suee Chieh's views on the proposed sale of homegrown Income Insurance to German insurer Allianz.

In an Aug. 6 Facebook post, the Ambassador-at-large called Income Insurance "the people's insurance company".

"I support the views of Tan Suee Chieh and hope that the Singapore Parliament will do the right thing when it discusses the matter this afternoon," he wrote.

"It should not be sold and certainly not to a foreign company. It is part of our social compact."

Several Members of Parliament, including Bukit Panjang MP Liang Eng Hwa and Sengkang MP He Ting Ru, have filed parliamentary questions on the sale.

The ongoing debate

On Aug. 2 and 5, Tan penned two open letters to Monetary Authority of Singapore Chairman Gan Kim Yong, calling for MAS to "carefully scrutinise" the sale.

In the first letter, he said the sale of the NTUC's majority stake in Income Insurance would "fundamentally erode [its] social mission".

"There is no reason to believe that Allianz will prioritise NTUC's social mission above its own profits," he said.

In response, NTUC Enterprise and Income Insurance issued a joint statement on Aug. 4, saying that in raising objections, Tan cast aspersions on the stakeholders about the transaction, which are "not well-founded" and "unfair".

The statement also refuted claims made by Tan, calling them "untrue" and "erroneous".

Tan responded with another open letter on Aug. 5.

He wrote:

"The NTUC Joint Statement claims that the arguments in my first open letter are “not well founded” and “unfair”. I disagree.

With respect, it is the NTUC Joint Statement that has got some key points fundamentally wrong."

In particular, he addressed a point he had earlier made that NTUC Enterprise increased its stake in then-NTUC Income with a series of capital injections at a par value of S$10 per share instead of “market value”, in other words, at a discount.

The joint statement by NTUC rebutted that such a claim was "inaccurate", as co-operative shares are not traded on the open market, and hence, do not hold a "market value".

However, Tan responded in his Aug. 5 statement that "there can be no question that... [NTUC Enterprise] obtained those shares at a very steep discount to their true value".

As such, the current plan would generate "a tremendous profit" for NTUC Enterprise — a windfall which would not be shared with minority shareholders, he alleged.

Tan also said NTUC's joint statement has not shown that Allianz has given a "legally binding commitment to make NTUC's social mission paramount over its own profits".

He added that if the sale goes through, NTUC Enterprise as a minority shareholder would have "no power to ensure that Allianz, a for-profit corporation, will subordinate its own profit-making objectives to further NTUC’s social mission".

"Respectfully, the NTUC Joint Statement misses the woods for the trees," he concluded.

He then reiterated his hope that MAS would scrutinise the proposed sale "in the interest of Singaporeans".

NTUC's statement

Less than half an hour later, at 5pm on the same day, NTUC published a statement by its President K Thanaletchimi and Sec-Gen Ng Chee Meng stressing that its "social mission will not change".

It added that Income Insurance had reassured NTUC that it would continue with two low-cost schemes for union members and keep the premiums affordable for policyholders.

The labour union also promised to ensure that Income "upholds this commitment".

In a previous Jul. 25 statement, NTUC Enterprise chairman Lim Boon Heng assured the public that Income would still offer affordable insurance to its lower-income customers, even after Allianz bought out a majority stake.

The matter will be discussed in Parliament on Aug. 6.

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Top image from Tommy Koh/Facebook and Income/Facebook