Questions to be answered in the Allianz-Income saga

Experts call for explanations of how Income will fulfil social mission in future

- Angela Tan

A plan for German insurer Allianz to buy a majority stake in Singapore's Income Insurance went awry when a key piece of information belatedly came to light.

Allianz's plan to return $1.85 billion in cash to shareholders within three years after the transaction in a capital reduction exercise proved to be a sticking point, prompting the Government to urgently pass new laws on Oct 16 to halt the deal.

Had the planned deal gone through, Allianz would have taken a stake of at least 51 per cent in Income. NTUC Enterprise would have seen its stake in Income shaved from 72.8 per cent to between 21.8 per cent and 49 per cent, depending on how minority shareholders tender their shares.

The changes to the Insurance Act allow the minister in charge of the Monetary Authority of Singapore to withhold approval in cases that involve an insurer that is a cooperative or is linked to one.

Income used to be a cooperative before it changed its legal structure to a company in 2022, and parent NTUC Enterprise is a cooperative.

NTUC Enterprise, in turn, is set up by the National Trades Union Congress (NTUC), the Singapore Labour Foundation and their affiliated unions.

In a four-hour debate on Oct 16, MPs from both the ruling and opposition parties – as well as Nominated MPs - raised several points related to Income and NTUC entities.

Industry experts who spoke to The Straits Times also questioned the role of those involved in the deal.

ST examines the issues and some of the questions that remain unanswered.

COMMUNICATION ABOUT THE CAPITAL REDUCTION PLAN

NTUC deputy secretary-general Desmond Tan said on Oct 16 that the labour movement's central committee did not know of the insurers' plan to return $1.85 billion to shareholders before it was made known in Parliament on Oct 14.