WHY THE DEAL WAS BLOCKED BY THE GOVERNMENT
Culture, Community and Youth Minister Edwin Tong , told , parliament , in a supervisory statement on Monday that the state had “assessed the proposed deal and has decided that it would not be in the public curiosity for the purchase, in its present form, to deal”.
He claimed that the Ministry of Culture, Community, and Youth (MCCY ) is unsure whether the proposed agreement will have an impact on Money or the co-op action as a whole in the direction of its social goal.
We find it challenging to balance Income’s representations to MCCY during the corporatization exercise with the proposed significant capital reduction, which is intended to increase its financial strength and build up, according to Mr. Tong.  ,
Money, a past co-op, was corporatised in 2022. According to the secretary, it sought to be exempted from Section 88 of the Co-operative Societies Act and was thus given the right to take over about S$ 2 billion in surplus to the new commercial institution.  ,
The proposed money decline in the Income-Allianz offer “runs store” to the idea for why the provision was given, he added.  ,
” Instead of the supervisory provision in 2023, the Income Co-op’s accumulated deficit of about S$ 2 billion may have gone to the CSLA after being wound up to support the co-op activity in Singapore as a whole,” he said.
According to him, “MCCY has not seen any agreement within the current exchange that accounts for the estimated S$ 2 billion deficit that was carried over to the new business entity as a result of the exemption,” he continued.  ,
” There is no clarity on how this sum will be directed towards advancing Income’s social mission” . ,
Therefore, according to Mr. Tong, the government is not confident Income will be able to carry out its social objective after the proposed transaction.  ,
There are no specific binding agreements or architectural safeguards in the agreement to guarantee Income’s social mission will be carried out.
But, Mr Tong added that the government is open to new plans, whether with Allianz or any other lovers, as long as the issues highlighted are completely addressed.
The minister emphasized that the government understands and accepts that the corporate goal behind Income’s corporatization training and possible collaboration with Allianz was to develop it and render it more financially stable in the long run, and that the government understands and accepts that.  ,
Income Insurance acknowledged that its proposed agreement with Allianz would strengthen its position” for the long run” and acknowledged the government’s knowledge of the” proper purpose” behind its corporatization exercise in 2022 in a statement released on Monday.