Latest news with #AngelaTan
Singapore Law Watch
10 hours ago
- Business
- Singapore Law Watch
‘We just want our money': Income Insurance shareholders disappointed at failed Allianz deal
'We just want our money': Income Insurance shareholders disappointed at failed Allianz deal Source: Straits Times Article Date: 25 Jun 2025 Author: Angela Tan & Kang Wan Chern Some express wish to cash out shares; Income exploring share liquidity options. German insurer Allianz's failed offer to buy a majority stake in Income Insurance disappointed many of Income's minority shareholders, who simply want to cash out their shares in the public non-listed home-grown insurer. This sentiment was expressed by some of the 600 minority shareholders who attended Income's annual general meeting (AGM) on June 24, many of whom were seen streaming into The Star Theatre in Buona Vista at around 4pm, more than an hour before the meeting started. The AGM was helmed by Income's outgoing chairman Ronald Ong and chief executive Andrew Yeo, who addressed questions from some 20 shareholders for about 3½ hours. During his opening speech, Mr Ong assured shareholders that 'we are keeping our options open and are continuing to explore different share liquidity options, which can include a share buyback programme'. 'We will update shareholders of any material development accordingly,' he added. While the media was not allowed to attend the meeting, retail shareholders there told The Straits Times about their key concerns, including that of Income's future. One shareholder lamented that he was stuck with Income shares, which have a par value of $10 each but were once worth $40.58 a share – the price offered by Allianz when it sought to buy at least 51 per cent of Income in a $2.2 billion cash deal in July 2024. The deal was blocked by the Government over concerns about its structure, which included a capital reduction plan where Income would return $1.85 billion in cash to shareholders within three years, and Income's ability to continue its social mission. As a result, Allianz withdrew its offer in December 2024. Today, the market value of Income shares is unclear as they are not publicly traded. Shareholders' main concern during the AGM was how to cash out of their Income shares, with several voicing their disappointment that the insurer's deal with Allianz did not go through, according to lawyer Robson Lee who was among those present at the AGM. Some asked if another deal with Allianz would be considered at the same offer price of around $40. Others expressed gratitude to Income's board for entering the proposed deal with Allianz, while criticising those who had opposed the German insurer's offer, arguing that such voices did not represent the broader shareholder base. Income has 15,510 individual shareholders who hold 27.4 million Income shares, according to its 2024 annual report. They must now go through the tedious task of finding willing buyers themselves once again if they want to sell their shares. Some are hoping the insurer considers an initial public offering on the Singapore Exchange, but this drew a mixed reaction from the crowd, with worries that valuations could come in lower than the par value of Income shares. Others were concerned about Income's decreasing dividends. 'We just want our money,' an elderly couple who holds a combined 7,300 shares told ST before the AGM. 'We are already so old,' said the wife, as she clutched her husband's hand while they joined the snaking queue, surrounded by other elderly shareholders. The couple said they have held on to Income shares as they have enjoyed healthy dividends in the past. But lately, this has shrunk. For the year ended Dec 31, 2024, Income's board had proposed an ordinary dividend payment of 20.8 cents a share, compared with 33.4 cents a share in 2023. To celebrate the company's 55th anniversary, the board also recommended a special dividend of 20.8 cents a share, down from 31.3 cents a share in 2023. Income generated a net profit of $44.8 million in 2024 compared with $15.3 million in a restated 18-month period from July 1, 2022, to Dec 31, 2023. Its net asset value per share, after excluding non-controlling interest, was $31.97, compared with $32.16 for 2023. At the AGM, Income's lead independent director Joy Tan was appointed its new chairwoman, replacing Mr Ong, who stepped down on June 24. Both received applause from shareholders in attendance. Ms Tan was elected to the board of NTUC Income Insurance Co-operative as an independent non-executive director on May 26, 2017. She was appointed to the board of Income on Aug 1, 2022. Ms Tan works at WongPartnership, where she is the co-head of the commercial and corporate disputes practice, the corporate governance and compliance practice and the financial services regulatory practice. The controversy surrounding the proposed Allianz transaction had been heightened by concerns over Mr Ong's dual positions as chairman of Income and CEO for South-east Asia at Morgan Stanley. This was despite Mr Ong having recused himself when the American bank was appointed as Income's financial adviser for the proposed transaction. The appointment of the financial adviser underwent a selection process, during which two financial advisers, including Morgan Stanley, were identified for consideration. Morgan Stanley was selected for its strong record in the insurance space and in mergers and acquisitions, particularly in Asia, said Income's Mr Yeo at the AGM. On his decision not to stand for re-election, Mr Ong said that it is the right time for him to take on additional responsibilities at NTUC Enterprise (NE) after serving as Income's chairman for the last seven years – four years at the cooperative and three years at Income. Mr Ong also touched on issues related to Income's corporatisation and Allianz's proposed offer. He said the corporatisation of Income was 'vital' for levelling the playing field, by enabling the company to achieve operational flexibility and gain access to strategic growth options to compete on an equal footing with other insurers here and abroad. 'More significantly, we must recognise that our success, thus far, would not have been possible without the numerous capital injections by NE over the years,' he said. NE holds about 78 million Income shares, representing close to 73 per cent of Income. Mr Ong said the regular capital injections from NE, as Income's only source of Tier-1 capital under the cooperative structure, was not a sustainable solution to capitalise the insurer in the long run. 'As such, we saw the urgency for Income Insurance to break out of the cooperative status quo, so that it could be better placed to potentially gain access to other capital sources if required,' he said. Corporatisation also enabled the insurer to potentially unlock equity value, he said. 'As a shareholder of Income Insurance, you are now participating in the company's economic interest and its growth and will be able to participate in any liquidity event involving the shares of Income Insurance,' Mr Ong said. On voting rights, all shareholders now have one vote a share, compared with ordinary shareholders having a 'one man, one vote' system when the insurer was a cooperative. 'Minority shareholders now have more voting rights as their vote count has risen to more than 26 per cent compared with less than 1 per cent previously, when we were a co-op,' Mr Ong said. He also addressed the surplus of around $2 billion that was carried over in 2022 from the cooperative NTUC Income to the corporatised entity Income Insurance, and what the money was used for. This was 'necessary and fundamental' in ensuring that Income remained solvent to discharge its legal and regulatory obligations and protect the interest of 1.4 million policyholders as it transitioned from a cooperative to a corporate entity, added Mr Ong. Mr Yeo said Income will focus on growing its sales force in 2025 as it doubles down on investment-linked insurance policies. The company is also prioritising higher-margin products and driving efficiencies such as repricing and claims management to enhance its business across its corporate business portfolios to ensure profitability, the CEO said. During the AGM, all 14 resolutions tabled, including the re-election of Income's board, received more than 99 per cent approval from shareholders. It came after the Monetary Authority of Singapore (MAS) issued a statement on the night of June 23 about the regulatory oversight on Allianz's offer. The regulator had outlined key events and points in response to former NTUC Income chief executive Tan Suee Chieh's open letters on the deal, which he had publicly opposed in 2024. Among the points raised was that while Allianz and NTUC Enterprise had received its approval prior to Allianz's preconditional voluntary cash general offer in 2024, the approval was to allow the two entities 'to enter into an agreement or arrangement to act together to acquire an interest of 5 per cent or more of Income's voting shares'. It did not mean that MAS had approved the deal, said the regulator. Source: The Straits Times © SPH Media Limited. Permission required for reproduction. Print
Singapore Law Watch
a day ago
- Business
- Singapore Law Watch
MAS sets on record its regulatory oversight in Allianz's offer for Income Insurance
MAS sets on record its regulatory oversight in Allianz's offer for Income Insurance Source: Straits Times Article Date: 24 Jun 2025 Author: Angela Tan MAS' reply comes ahead of Income's annual general meeting, which is scheduled to take place on the evening of June 24. The Monetary Authority of Singapore (MAS) has on June 23 set on record matters related to its regulatory oversight during German insurer Allianz's planned offer to buy a majority stake in homegrown Income Insurance in 2024. In a late night release, the regulator outlined key events and points in response to former NTUC Income chief executive officer Tan Suee Chieh's open letters on the proposed acquisition, which fell apart after Allianz withdrew its offer on Dec 16. MAS's reply comes ahead of Income's annual general meeting, which is scheduled to take place on June 24 evening. In July 2024, Allianz announced plans to buy a majority stake of at least 51 per cent in Income for $40.58 a share in a $2.2 billion cash deal. The offer faced public backlash due to concerns that Income might shed its social mission of providing affordable insurance to Singaporeans. Then, majority shareholder NTUC Enterprise and Income had assured that affordable insurance would be maintained. Questions were later raised in Parliament about the deal's impact on policyholders and the company's social mission, with government officials stating that Allianz and Income would be held accountable for their commitments. It was later revealed that Allianz had a capital reduction plan where Income would return $1.85 billion in cash to shareholders within three years. This drew concerns from the Government and the law was urgently amended to allow the deal to be blocked. Mr Tan's three open letters - of which two were published in August 2024, and one on April 28, 2025 - included questions about MAS' regulatory oversight of the transaction. The letters were addressed to the MAS and its chairman, Deputy Prime Minister Gan Kim Yong. Mr Tan had also written to MAS on June 9, 2025, seeking a response and requesting a meeting with DPM Gan or a senior MAS representative. Mr Tan was CEO of NTUC Income from 2007 to 2013 before becoming group CEO of NTUC Enterprise from 2013 to 2017. MAS said on June 23 that Allianz and NTUC Enterprise had received its approval prior to Allianz making its pre-conditional voluntary cash general offer on July 17, 2024. The approval was to allow the two entities 'to enter into an agreement or arrangement to act together to acquire an interest of 5 per cent or more of Income's voting shares', as outlined in the Insurance Act. It did not mean that MAS had approved the deal, said the regulator. 'The proposed transaction was subject to further regulatory approval from MAS for Allianz to obtain effective control and become a substantial shareholder of Income,' said MAS. At this point, the regulatory approval process was not completed and would have taken a few months for MAS to complete its assessment, it added. Mr Chee Hong Tat, who is MAS deputy chairman, had said in Parliament on Aug 6, 2024 that 'the proposed deal was still subject to MAS' regulatory approval' and there was 'due process for this'. MAS reiterated on June 23 that it had received Allianz's preliminary business plan for Income in mid-July 2024. This included a set of business and financial projections, which included a plan for capital efficiency and reduction. 'There was no application to MAS to approve the capital reduction plan, neither did MAS give any such approval. Any capital reduction would need separate and specific MAS approval,' said the regulator. The capital reduction plan proved to be a sticking point in the proposed deal. A key factor was the ministerial exemption that Income received when it was corporatised in 2022, which allowed it to carry over a surplus of about $2 billion. Otherwise, the money would have been returned to the Co-operative Societies Liquidation Account to benefit the sector at large. While the MAS did not have prudential grounds for concern about the transaction after the Aug 6 parliament sitting, it had noted that the capital reduction plan could be relevant to Ministry of Culture, Community and Youth (MCCY), given Income's previous status as a co-operative society. After MAS shared the information with MCCY, the Government decided to amend the Insurance Act on an urgent basis to allow the approval of the deal to be withheld. This paved the way for the MAS to consider the views of the MCCY in future applications related to insurers that are cooperatives or are linked to cooperatives. During the Parliament sitting on Oct 14 when the legislative amendment was tabled, then-MCCY Minister Edwin Tong explained that 'when we first saw the announcements, we accepted the intent of the transaction, which is to strengthen Income.' He also stated that 'the Government also does not have concerns over Allianz's standing or suitability to acquire a majority stake in Income'. However, MCCY found it 'difficult to reconcile the proposed substantial capital reduction, soon after the transaction is completed, with Income's representations to MCCY during the corporatisation exercise that it was aiming to build up capital resources and enhance its financial strength'. MCCY was also 'not satisfied that Income will be able to continue fulfilling its social mission after the proposed transaction.' Mr Chee, who was then the Transport Minister and Second Minister for Finance, also made clear on Oct 16 that 'there is no formal application yet by Allianz to obtain effective control and become a substantial shareholder of Income'. MAS said on June 23 that before sharing the capital reduction plan with MCCY, the regulator 'had not been aware of the representations that Income had made to MCCY when it was allowed to carry over $2 billion in surplus to the new corporatised entity'. Allianz withdrew its offer in December, and the matter was raised by various members of alternative political parties during the recently-concluded General Election. MAS said it will not agree to Mr Tan's meeting request 'given that the proposed transaction and amendments to the Insurance Act had been extensively debated in Parliament, and addressed again in this open reply'. 'Nevertheless, if Mr Tan has further feedback or information to share with us, we will duly consider them,' it added. Sequence of key events 2024 July 17: German insurer Allianz offers $40.58 a share to buy a stake of at least 51 per cent in Income Insurance in a $2.2 billion cash deal. NTUC Enterprise, which holds a 72.8 per cent stake, has given an irrevocable undertaking to accept the offer. Mid-July: Allianz, Income and its parent NTUC Enterprise submit plans to the Monetary Authority of Singapore (MAS) around the time the offer was made. It includes details about Income returning $1.85 billion in cash to shareholders within the first three years after the deal wraps up. This was not publicly disclosed. July 25: NTUC Enterprise chairman Lim Boon Heng says that Income will continue to provide affordable insurance after the deal. The statement comes after some former executives and members of the public raised concerns about the insurer's social mission. July 27: Income issues a statement that its chairman Ronald Ong had recused himself when Morgan Stanley was appointed as the financial adviser for the deal, after questions were raised about it. July 30: Mr Lim, Income chief executive Andrew Yeo and Income board's lead independent director Joy Tan further clarify concerns over the deal in an interview with ST and in a separate joint statement. Aug 4: NTUC Enterprise and Income rebuts an open letter by former NTUC Income chief executive Tan Suee Chieh, in which he objected to the Allianz offer. MCCY Minister Edwin Tong writes in a Facebook post that co-ops as social enterprises must be financially sustainable in order to better serve their members in a fast changing economic environment. Aug 5: NTUC's secretary-general Ng Chee Meng and president K Thanaletchimi say in a joint statement that the central committee was briefed on the deal, and outlined why Income needed to become more competitive. Aug 6: The deal is debated in Parliament. The Ministry of Culture, Community and Youth (MCCY) is unaware of the post-transaction details at this time. After Aug 6: MCCY continues to do due diligence and enquire further into the proposed deal. MAS provides MCCY with further details, including Income's capital optimisation plan as the regulator felt it could be relevant to the ministry's views on the deal. MCCY had not seen this information earlier. Oct 14: MCCY minister Edwin Tong tells Parliament that the Government will halt the deal in its current form on concerns over its structure and ability of Income to continue serving its social mission. A Bill to amend the Insurance Act is tabled on an urgent basis. In a late statement, Allianz says it will consider revising the deal structure. Income and NTUC Enterprise say they will work closely with stakeholders on the next course of action. Oct 16: NTUC Deputy Secretary-General Desmond Tan tells Parliament that NTUC's central committee was unaware of the capital extraction plan and learnt of it on Oct 14. MPs debate the issue for nearly four hours, and vote to pass the Bill. Nov 14: Despite the government's stance, Income and Allianz said in a bourse filing that discussions over the deal for a majority stake acquisition in the Singapore insurer were still ongoing. Dec 16: Allianz withdraws offer for Income in view of the legislative changes. NTUC Enterprise says it will take time to study how to address the Government's concerns, and to consider all strategic options that can further strengthen Income Insurance's financial resilience. 2025 April-May: Issue resurfaces during Singapore's General Election. June 9: Mr Ronald Ong will step down as Income's chairman on Jun 24, 2025, while retaining his role at NTUC Enterprise. The search for a new chairman has begun. Source: The Straits Times © SPH Media Limited. Permission required for reproduction. Print
Singapore Law Watch
08-05-2025
- Business
- Singapore Law Watch
Singapore and EU sign digital trade pact, deepening cooperation amid global uncertainties
Singapore and EU sign digital trade pact, deepening cooperation amid global uncertainties Source: Straits Times Article Date: 08 May 2025 Author: Angela Tan The agreement supplements the EU-Singapore Free Trade Agreement (EUSFTA) that entered into force in 2019. Singapore and the European Union on May 7 inked a digital trade agreement designed to provide greater clarity and legal certainty for consumers and businesses on both sides to transact online more seamlessly. Minister-in-charge of Trade Relations Grace Fu and EU Commissioner for Trade and Economic Security Maros Sefcovic signed the European Union-Singapore Digital Trade Agreement (EUSDTA) at The Treasury in High Street. The agreement supplements the EU-Singapore Free Trade Agreement (EUSFTA) that entered into force in 2019. The EUSDTA aims to set global standards for digital trade and cross-border data flows without unjustified barriers. It includes rules on e-signatures, spam and cyber security, among others. It should also lower costs for businesses, boosting services trade. The EU is Singapore's fifth-largest goods trading partner. In 2024, bilateral trade in goods grew to over $100 billion, representing 7.8 per cent of Singapore's total goods trade. The EU is also Singapore's second-largest services trading partner, with bilateral trade in services reaching over $110 billion in 2023. Investment ties remain robust, with the EU being Singapore's second-largest foreign investor and second-largest overseas investment destination. Singapore is the EU's fifth-largest partner in services trade, and more than half of these services are delivered digitally. Ms Fu said the signing of the EUSDTA is a significant step forward in deepening digital economic cooperation between Singapore and the EU, given the global uncertainties. She said: 'The EUSDTA reflects our shared commitment to foster a trusted, secure and inclusive digital economy, and create new opportunities for our companies and citizens in digital trade. 'As the EU's first bilateral digital economy agreement with an Asean country, the EUSDTA will also support greater region-to-region digital connectivity.' The EUSDTA follows similar partnerships with Australia, the United Kingdom, New Zealand, Chile and South Korea that put in place rules for digital trade and cross-border data flows. Data from the World Trade Organisation showed global digital service exports surpassed US$4.2 trillion (S$5.42 trillion) in 2023, up 9 per cent from 2022. Digitally delivered services trade globally has risen on average by 8.2 per cent per year from 2005 to 2023, outpacing increases in trade of goods and other services, its data showed. Under the EUSDTA, businesses will be allowed to transfer data, including requirements to store data in specified locations, to support electronic commerce. There will be a legal framework to protect the personal data of individuals, based on principles and guidelines developed by relevant international bodies. It should be easier and cheaper for people and businesses to pay each other online, even if they are in different countries. Both jurisdictions will use internationally accepted standards, promote interoperability, and encourage innovation and competition in electronic payment services. Electronic invoicing should also be easier, so businesses can send and receive e-invoices smoothly across borders without extra hassle. Trade documents will be made available in electronic format and accepted as the legal equivalent of paper versions. No customs duties on electronic transmissions will be imposed under the EUSDTA. To ensure software makers feel safe and trusted when they do business, their special computer instructions – called source code – need to be protected. Hence, Singapore and the EU have agreed that companies will not have to share their secret source code just to sell their software in each other's countries. This helps keep ideas safe and encourages people to create new things. To enhance consumer protection, Singapore and the EU will adopt measures that guard against fraudulent, misleading or deceptive commercial activities that cause harm to consumers engaged in electronic commerce. Singapore and the EU will cooperate to help small and medium-sized enterprises (SMEs) participate in digital trade space. Ms Nele Cornelis, executive director at EuroCham Singapore, which represents European businesses here, sees the partnership as 'a catalyst for stronger government-to-business collaboration, regulatory alignment, and SME digital inclusion'. 'It enables businesses to trade more efficiently, scale globally with confidence, and operate within a secure and forward-looking digital environment,' she said. Mr Kok Ping Soon, chief executive officer of the Singapore Business Federation, said the EUSFTA, which eliminates all tariffs on goods into the EU, was among the top three most utilised FTAs among Singapore businesses in 2023. He is hopeful the EUSDTA will help create new opportunities for various sectors here, including e-commerce and financial services. Mr Lim Chung Chun, group CEO of digital wealth platform iFast Corporation, said he is keen to explore opportunities to expand cross-border financial services into the EU. For Singapore-based fintech firms specialising in cross-border payments like Nium, trusted cross-border data flows, aligned standards for payments and interoperable frameworks are essential to delivering seamless services across borders. Mr Anupam Pahuja, Nium's general manager for Asia-Pacific, Middle East and Africa, welcomes the commitment to protect personal data, promote cyber security, and enable greater SME participation in digital finance. Source: The Straits Times © SPH Media Limited. Permission required for reproduction. Print
