NTUC Enterprise and Income Insurance have denied the allegations made by former NTUC Income CEO Tan Suu Kyi. Open Letter He raised corporate governance issues with the Monetary Authority of Singapore (MAS) and expressed concerns that the sale to Allianz could undermine NTUC Income’s social mission.
Last month, Allianz Announced The company plans to acquire a 51% stake in Singapore’s Income Insurance for about S$2.2 billion (EUR1.5 billion).
Tan highlighted two key events preceding the sale: First, NTUC Enterprise injected S$630 million into NTUC Income between 2015 and 2020 in exchange for shares with a par value of S$10 per share.
This was well below its actual market and economic value: NTUC acquired shares worth far more than the S$630 million it had injected into NTUC Income.
The acquisition was made with the assurance that the shares would be held in perpetuity to safeguard NTUC Income’s social mission.
Secondly, the incorporation of NTUC Income in 2022 raised concerns about the permanence of NTUC Enterprise’s commitments, despite written assurances.
Mr Tan argued that the recent announcement of NTUC Income’s sale to Allianz was inconsistent with NTUC Enterprise’s previous commitments and could undermine NTUC Income’s social mission.
He highlighted the huge profits NE made from the shares it acquired at face value and called on MAS to scrutinise the sale.
In response, NTUC Enterprise and Income Insurance issued a joint statement saying his opposition “casts aspersions on stakeholders regarding the proposed transaction” and that these assassinations are “baseless and unjustified in fact”.
They said the conversion into perpetual shares was to meet regulatory requirements as the shares of the cooperative were always valued at par value and not at market value.
They noted that NTUC Income’s incorporation process had actually increased the rights and voting power of minority shareholders.
The statement emphasised that cooperative shares, by their very nature, are purchased and redeemed at face value and not market price.
The capital injections made by NTUC Enterprise between 2015 and 2020 were also at face value, in line with this principle.
The 2022 incorporation saw the co-op shares converted one-for-one into shares, allowing minority shareholders to maximize the value of their shares and increasing their voting power from 0.3% to 26.2%.
NTUC Enterprise and Income Insurance also cited concerns over NTUC Enterprise’s promise to hold its shares in the company forever.
NTUC Enterprise noted that it had initially committed to holding shares in NTUC Income to support its social mission, but that changing competitive environment and regulatory requirements necessitated the change to ensure financial resilience and sustainability.
The statement also highlighted Allianz’s financial strength and capability, noting that its involvement will create a highly competitive “insurance giant” in Singapore, ensuring long-term sustainability and support for NTUC Income’s social mission.
Minority shareholders had the opportunity to sell their shares at a significant premium, reflecting annual earnings well above the market average, and were confident that they would profit from the sale.
