ohmysingapore

According to recent industry data, while the mass-market segment is still enjoying healthy demand and price increases, the prime segment seems to be suffering from waning demand as foreign investors exit the Singapore residential property market.

Take the January and February sales figures as a case in point. Prime property accounted for only 1 to 2 per cent of total developer sales, while foreign buyers made up only 4 to 6 per cent of the caveats lodged during the first two months of this year. We believe the additional buyer’s stamp duty imposed last December is one of the main reasons foreign investor interest in the Singapore residential market has shrunk significantly, thus resulting in the weak demand for the prime housing units in which they traditionally invest.

This development leads us to ask: Will we see a decoupling of the two segments, resulting in a two-tier private housing market in Singapore? Will mass-market prices continue to trend up, while prime prices weaken due to a lack of foreign demand?

While a decoupling of the different segments of the Singapore housing market is rare, it did happen for a certain period during the last global financial crisis. From early 2008 to mid-2009, private residential prices fell significantly across the board – by an average of 25 per cent – while HDB resale flat prices trended slightly higher. However, we believe this decoupling and the strength of HDB prices were driven mainly by a shortage of supply, as the actual completion of HDB flats plunged from around 28,000 units in 2000 to only around 2,000 units in 2008.

Now, looking at the supply conditions in the mass-market private residential segment, we estimate that around 3,000 units were completed last year. We expect this to increase to around 4,000 units this year and 7,000 units in 2013.

The popularity of these properties, especially the so-called shoebox units, which really took off in late 2009 and early 2010, had resulted in the subsequent launch of a significant number of mass-market private residential projects. Factoring in a three-year construction period, some of these projects should be completed by late 2012 and significantly more in 2013.

In addition, looking at the Government Land Sales programme in the second half of 2011 and as planned in the first half of this year, the bulk of the land sales – an estimated 75 per cent by the number of units – is in the mass-market segment. This would ensure that the supply of mass-market private residential units would remain ample from 2014 onwards.

Taking these two factors into account – the narrowing price premium between prime and mass-market properties over the last two years, and the outlook for ample mass-market supply starting next year – we believe any decoupling of the two segments will be short-lived. This means that while mass-market private residential demand and prices are currently still doing well, any potential further weakness in the prime segment could eventually spread to the mass market.

Tan Chin Keong is an analyst at UBS Wealth Management Research.

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Singapore population tipped at 5.18 million as of July 2011, and approximately 10% of the population are permanent residents. In 2010, almost 50,000 foreigners were granted permanent resident status and the numbers are increasing. The sophisticated infrastructure, education, safety and healthcare are the top reasons why these new permanent residents choose to make Singapore their home.

Singapore has been keeping an open door immigration policy to attract foreign talent and to maintain a healthy population growth. The driving factor has always been an economic one. The low birth rate and the need to improve human capital in Singapore have been the two main impetuses that led to the escalation in Singapore’s population growth in the last two decades. Foreign talent is an invaluable asset to a competitive economy. Singapore has made a concerted effort in courting and retaining foreign talent through various schemes including the benefit of permanent residence status. There are four Main Singapore Permanent Resident Schemes for foreign professionals and investors who are keen to immigrate to Singapore.

싱가포르에서 일하는 개인들을 위한 영주권 프로그램(Singapore Permanent Resident SCHEME FOR INDIVIDUALS WORKING IN SINGAPORE)

I. Professional, Technical Personnel and Skilled Worker Scheme (PTS Scheme)
The most popular scheme for permanent residence in Singapore is the Professional, Technical Personnel and Skilled Worker scheme (PTS Scheme). The scheme enables foreign professionals working in Singapore under an Employment Pass, Entrepreneur Pass or EntrePass and Skilled Worker Pass or S Pass to apply for permanent residence.

투자를 통한 영주권 프로그램(Singapore Permanent Resident SCHEME FOR CAPITAL INVESTORS)

II. Global Investor Program Scheme (GIP Scheme)
The Global Investor Program is an initiative launched by Singapore Economic Development Board and Ministry of Manpower. It is a program for foreign individuals and entrepreneurs who are keen to invest in or initiate new business activities in Singapore, and in the process, obtain Singapore permanent residence. Spouses and children of these investors are also eligible for Singapore permanent residence.

III. Financial Investor Scheme (FIS Scheme)
FIS is suited for the Ultra High Net worth Individuals. The Financial Investor Scheme, launched by the Monetary Authority of Singapore (MAS) enables and encourages UHNWI’s and their families to become Permanent Residents of Singapore, so that they can benefit from Singapore’s array of financial services, as well as its high standard of living.

IV. Foreign Artistic Talent Scheme (FA Scheme)
The Foreign Artistic Talent Scheme is a joint program of the National Arts Council and the Immigration and Checkpoints Authority of Singapore to attract foreign artists with outstanding track records in dance, music, theatre, literary arts, visual arts to immigrate to Singapore. This scheme includes technical professionals in related arts but excludes the entertainment, journalism, broadcasting, and film industries. These artists should have had at least 3 years formal training and at least 6 years active work. The successful applicants will enjoy the same benefits like NAC grants and awards as Singaporean artists, and will be required to take up full employment in Singapore for the grant of full PR status.

National Service Liability
Note: Main applicants who are granted Permanent Residency status under the Professionals/Technical Personnel and Skilled Workers (PTS) Scheme or the Investor Scheme are exempted from NS. Male children who are granted PR status under their parents’ sponsorship are liable for NS under the Enlistment Act.

NS-liable PRs are expected to serve NS. Renouncing or losing one’s PR status without serving or completing full-time NS would have an adverse impact on any immediate or future applications to work or study in Singapore, or for Singapore citizenship or PR status.

Males who are granted Singapore PR, and who were previously Singapore Citizens or Singapore Permanent Residents, are liable to be called up for NS regardless of the type of PR status they have been granted

–

GIP Scheme

Interested to be a Permanent Resident of Singapore?
Global Investor Programme (GIP) is launched for investors who are interested in starting up a business or investing in Singapore. Through this programme, the investors, their spouses and children who are below 21 years of age are eligible for Singapore Permanent Residence (PR) status. Male dependants under the age of 21 years will be liable for Singapore National Service. The investor’s unmarried children who are over 21 years of age do not qualify for Singapore PR but are eligible to apply for the renewable five-year Long Term Visit Pass, subject to the investor’s re-entry permit validity.

GIP offers two investment options:

Option A: Invest at least S$2.5 million in a new business entity or expansion of an existing business operation. A business proposal or investment plan is required.
Option B: Invest at least S$2.5 million in a GIP-approved fund.

Eligibility Criteria

You are eligible to apply if you meet one of following criteria:

A minimum of three-year entrepreneurial track record. The annual revenue of your company must be at least S$30 million in the most recent year and an average of S$30 million per year for the last three years. Audited financial statements of your company for the last three years are also required.
Corporate managers holding the position of Chairman, CEO, CFO, CTO, etc. who have more than 10 years of experience in a company with annual revenue of at least S$100 million may also apply for GIP.
If you qualify for the GIP based on the above information, please email us your profile and your company’s Profit & Loss statement for the past three years for a quick evaluation. Upon evaluation, we will contact you on the necessary GIP application proceedings.

–

FIS Scheme

Interested to be a Permanent Resident of Singapore?
Financial Investor Scheme (FIS) has been launched for individuals who have net personal assets of S$20 million or more, and who are interested in investing in Singapore. Through this programme these individuals and their family* are eligible for the Singapore Permanent Residence (PR) status.

Option A: Place a minimum of S$10 million of financial asset in Singapore to be managed by a financial institution approved by Monetary Authority of Singapore (MAS).

Eligibility Criteria

You are eligible to apply if you meet one of following criteria:

Must be 21 years or older;
Must have a Net Personal Asset of S$20 million; and
Place a minimum of S$10 million of financial asset for at least 5 years in Singapore with a MAS-approved financial institution.
Definition of financial assets to be placed under the approved financial institution:

Bank deposits;
Capital market products i.e. Shares, Bonds, Gold;
Collective investment schemes;
Premiums paid in respect of life insurance policies; and
Other investment products.
Purchase of properties: Singapore property is subject to foreign ownership restrictions under the Residential Properties Act. Only newly acquired property purchased within 6 months from the formal submission of the application can be included.

Singapore Permanent Resident Status

Immigration and Checkpoints Authority of Singapore grants permanent resident status to qualified applicants upon submission and approval of all required documents.

*Family Eligibility Criteria

Spouses and children who are below 21 years of age are eligible for the Singapore Permanent Residence (PR) status. Male dependants will then be liable for Singapore National Service. Investor’s unmarried children who are over 21 years old do not qualify for Singapore PR but are eligible to apply for the renewable 5-year Long Term Visit Pass, subject to the investor’s re-entry permit validity.

As of 1 January 2011 parents and parents-in-law are no longer eligible for PR status; instead, they can apply for a renewable 5-year Long Term Visit Pass (LTVP).

Apply Now for a Quick Evaluation

If you qualify for the FIS based on the above information, please email us your net worth statement for a quick evaluation. Upon evaluation, we will contact you on the necessary FIS application proceedings. If you qualify, we will arrange a meeting with our panel of MAS financial institution approved to discuss your application for free. Please feel free to contact us should you need further details or clarification.

(references : rikvin.com)

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COE가 두달간 만불이 떨어져서 소나타가 많이 싸졌습니다. Only 1억3천… 엘란트라는 그냥 9천만원…

민영화되고 총리가 대주주인 버스와 지하철은 사상최고의 흑자를 내면서 공공요금을 올리고…

인프라에는 그닥 투자를 하지않는 참 멋진 나라입니다.

미래가 밝습니다.

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SINGAPORE – For the first time, Singapore overtook Hong Kong as a more expensive city for expatriates, driven by a stronger currency and higher rents, according to Mercer’s Worldwide Cost of Living Survey.

The island-nation was ranked the eighth-most expensive city worldwide, rising from the 11th spot last year following a “substantial increase” in housing costs, Mercer said in an emailed statement yesterday. Hong Kong dropped one level to ninth place, the survey showed.

Singapore’s record economic growth last year helped the city to become home to the world’s highest proportion of millionaire households at 15.5 per cent of the population, according to a Boston Consulting Group report in May.

Inflation rose 4.5 per cent in May, exceeding economists’ estimates, as food and transportation costs climbed, supporting the central bank’s decision to allow the currency to appreciate further.

“You have got high inflation and we’re talking generally about consumer price pressures, rise in property prices, the strong Singapore dollar and tight labour markets,” said Mr Vishnu Varathan, an economist at Capital Economics Asia in Singapore. “So it’s quite clear how Singapore managed to edge out Hong Kong.”

The Singapore dollar has risen about 13 per cent against the United States dollar in the past year, matching the South Korean won as the best performers among the 10 most actively traded currencies in Asia outside Japan.

Mercer benchmarked the costs of each city against New York and compared prices in US dollar terms. While Hong Kong’s housing costs increased 30 per cent during the survey period, exceeding Singapore’s 23 per cent gain, the appreciation of the island-state’s currency made it a more expensive place to live, according to Mr Phil Stanley, Mercer’s Asia Pacific global mobility leader for information products.

“It should also be kept in mind that just because a location may have moved up in its ranking, it doesn’t necessarily mean that the location’s costs have increased in local currency terms,” Mr Stanley said.

Hong Kong’s ranking in this survey may also have been hurt by China’s efforts to cool the economy through housing curbs and five interest rate increases since October.

“One might argue that the China effect on Hong Kong might be a little bit more pronounced,” Capital Economics’s Varathan said. “So if China’s engineering of a soft landing is in fact quite effective, then Singapore might remain ahead of Hong Kong in that sense.”

Luanda in Angola retained its title of the world’s most expensive city, while Tokyo was ranked No 2, Mercer said. New York City, the most expensive US city, dropped to 32nd spot from 27th, while London slipped one place to 18th. Bloomberg

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As a Singaporean who had dedicated 2.5 years of his life to serving the nation, it really pains me to read about what is becoming of this nation in the article “The woes of a Singaporean IT consultant” – we now have under-qualified “foreign talents” who had merely fabricated their resumes are now being given priority to local jobs over qualified Singaporean PMET’s (who, like me, had dedicated 2.5 years to serving the country). These foreign talents do not have to sacrifice a single second of their lives to protecting Singapore, yet are able to share in the same benefits as the Singaporeans whose jobs they have displaced.

If this is not bad enough, let me add that Singapore is now being sold piecemeal to rich foreigners (some of which hail from dubious backgrounds, just like our “foreign talents”), by foreigners who have now decided to call themselves “Singaporeans” but actually have no intention to contribute back to Singapore (in any way), what benefits they have taken as “Singaporeans”. How do they do this? Via the Global Investor Program (a.k.a GIP scheme) [Link] sanctioned by Contact Singapore. Let me explain how this works…

The GIP scheme was actually endorsed by the government to attract skilled and rich individuals to invest in Singapore. One way is for the foreign individual to invest at least S$ 2.5 million in one of GIP-approved private equity funds [Link]; of course, the migrant in question must satisfy certain criteria to ensure that Singapore is actually accepting talent and not junk. If the criteria is satisfied and the migrant passes the interviews by the relevant governing body, he / she is then allowed to “invest” this money in one of the GIP-approved funds and then obtains a Singapore-PR with no questions asked.

From the GIP fund’s point of view, they manage the funds and are required by governing mandate to invest at least 50% of the funds into Singapore enterprises to encourage the growth of local enterprises. At the same time, the fund-manager collects 2.5%p.a. of the funds under management as management fees to cover operating costs. The fundamental intentions behind this idea are good.

However, it has come to my attention that there are funds, which have been started by former PRCs who have either become Singapore citizens or are currently awaiting to become Singapore citizens. Ironically, they too became Singapore PRs (and then subsequently citizens) through this GIP scheme.

Unfortunately (according to an insider), none of them have professional fund-management experience and are focused on raising as much money as possible (i.e. getting as many migrant-investors / clients to invest in their fund as possible) rather than channeling the money to helping businesses grow, so that they may benefit from the 2.5% management fee. It appears that they have a terrible market reputation and actually advice some of their clients who do not meet the criteria to qualify for Singaporean PR under this scheme to get their documents forged.

To make things worse, they have not invested a single cent of the funds raised in any Singaporean enterprise (instead investing in Chinese enterprises recommended by their own friends or clients) and are not intending to invest a single cent in any Singaporean enterprise.

To top it all off, I was told that this firm (based in Singapore) employs a lot more PRCs rather than Singaporeans. From what I understand, the founder of the firm has sent his wife and son to the UK for the son’s education, and is intending to send his son to the States thereafter for his university education, with no intention to let his son serve his rightful share of national service.

To summarise it in a nutshell, Singapore offered such ingrates a good life in Singapore by offering them Singaporean passports, and ultimately Singaporean citizenship, and how do they repay us?

By opening the floodgates to more foreigners and selling Singapore to more foreigners (some of who do not meet the criteria of highly-skilled migrants are encouraged to forge the necessary documents in order to pass the ICA) so that they may collect more fees and enrich themselves further;

the funds that were meant to go towards growing Singaporean enterprises in exchange for the Singaporean PRs we have so awarded these rich individuals, are now being channeled back into China to fund Chinese enterprises – one does wonder why we’re awarding a Singaporean passport to the rich foreigners in the first place if it will not benefit the country;

a token number of jobs are created for Singaporeans in this firm – the firm still prefers to hire PRCs as the bosses do not trust Singaporeans from what I understand;

the founders of the firm are not letting their families serve their rightful due of national service to the country which gave them clean air to breathe and a safe environment to dream in every night; if they were back in China, they’d probably be choking on the polluted air and worrying about whether they would be kidnapped and held ransom by random thugs.
Really, seeing such things happen in Singapore does make me wonder what this country is coming to – to have a country being sold out to foreigners by its own government is a terrible thing. To have a country’s government let foreigners sell its own country out piecemeal? That’s unheard of and absolutely ludicrous.

[http://www.temasekreview.com]

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“I would like to remind the public that HKD interest rates may rise even before the Fed’s rate hikes. Apart from following USD interest rates, HKD interest rates are also affected by changes in the demand and supply of HKD in the local banking system. As HKD loans have grown faster than HKD deposits since last year, the loan-to-deposit ratio of banks in Hong Kong has risen from 71% at the beginning of last year to 81% in February this year. Quite a number of banks have already raised HKD lending and deposit rates. Since the HKD loan demand is likely to remain strong, local banks’ HKD interest rates may face further upward pressure.”

HKMA Chief Executive Norman Chan, 28 April 2011

Hong Kong mortgage rates have risen by as much as a 1pp over the past three months, as loan-deposit ratios rise given the lending spree. Loan-deposit ratios have risen to about 82% compared with 71% in early 2010. Hong Kong’s three biggest mortgage lenders currently charge new borrowers about 1.7% to 2.2%, or 1.5% to 2% above HIBOR, compared to less than 1% above HIBOR last year (or about 1% mortgage rate).

We ask ourselves the same question in Singapore. Will interest or mortgage rates also be heading higher, driven by demand supply dynamics in the local banking system, despite US interest rates staying low for the foreseeable future? A similar lending spree is taking place in Singapore. Loan growth is sprinting at 21.9%, while deposit growth is 12.7% (as at April 2011). The loan-to-deposit ratio has, as a result, climbed from a low of about 71% in March last year to about 77% as at April 2011. Loan growth is broad-based, with corporate loans growing 24.3% and mortgage loans at 22.2%.

If the gap between loan and deposit growth persists, the loan-to-deposit ratio will likely reach 80% by Q4. That would be the highest since February 2006. A high system-wide loan-to-deposit ratio will likely increase the bargaining leverage of Singapore local banks and increase the likelihood of higher mortgage spreads or short-term interbank rates.

We find that Singapore 3M SIBOR rates are significantly influenced by loandeposit ratios historically, even after controlling for US interest rates (Table 1). Our estimates show that an increase in the loan-deposit ratio to 0.80 from the current 0.77, for example, could increase short-term rates by about 9bp. There nevertheless remains a large difference in the loan-deposit (LD) ratios between the three Singapore local banks. DBS – the dominant interbank lender and mortgage lender – still has a relatively low LD ratio of 0.60, versus above 0.80 for OCBC and UOB (Table 2). The uneven LD ratio spread (short of collusive action) may reduce the possibility of a Hong Kong-type outcome.

The other dynamic in Hong Kong driving up mortgage rates is the shift toward RMB currency deposits. Concerns of further depreciation and negative real returns have prompted a switch from HK and US dollar deposits into renminbi. Hong Kong dollar deposits are growing at 5.2% as a result, versus foreign currency deposits at 18%. At end-April, Chinese currency deposits accounted for 8.4% of all deposits.

Such a dynamic is absent in Singapore. Savers are quite happy to keep their funds in Singapore dollars, given the MAS’ commitment of a “slightly steeper” appreciation bias. The Singapore dollar has strengthened some 12% against the US dollar over the last one and a half years. Foreign currency deposits are only growing at about 2.5% as at April. There have been major RMB product launches in recent months, but these have yet to make any significant impact on overall system-wide deposits, in contrast to Hong Kong. Singapore dollar appreciation moreover has been faster than RMB appreciation over the last two years (CNYSGD has moved from low of 4.40 in March 2009 to 5.25 currently).

Whether Singapore’s loan growth can continue running at the current rapid pace (21.9% in April) is another key question. The government had recently tightened loan-to-value ratios for investment residential properties to 60% for individuals and 50% for non-individuals (on 13 January). Some of the local banks have signaled a drop in mortgage applications since these measures. Corporate lending may also cool off if the current soft economic patch persists.

Higher short-term interest rates may also occur by year-end if the MAS decides to normalize the appreciation bias back to “modest and gradual” from the current “slightly steeper” stance at the October policy meeting.

This is not our base case,but cannot be ruled out given the current growth deceleration.

Moreover, the inflation threat is not as acute, with headline CPI having peaked in January 2011. Normalization of the MAS appreciation bias could increase short-term rates by about 10-15 bp, based on the past market reaction when MAS had to tighten. A larger interest rate reaction is however possible, as regional interest rates (Malaysia, Thailand and Indonesia) have been rising. A 3% ringgit deposit rate, for example, might start looking more attractive against a 2% Singapore dollar appreciation bias, which could prompt some deposit shifts.

In summary, we believe Singapore interest and mortgage rates will at best be only slightly higher if the loan-deposit ratio continues climbing, with a higher likelihood of a larger increase if MAS normalizes the appreciation bias in October.

The dynamics driving HK mortgage rates higher are not quite the same, as there is a flight to RMB deposits in Hong Kong. In contrast, the strengthening Singapore dollar has held up Singapore deposit growth in the low teens despite low rates.

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5-6조원의 가치는 없다고 생각하지만…

sky park도 생각보다 괜찮고…

카지노도 나쁘지 않은 곳.

호텔 내부. 위의 철 그물(?)은 호텔 디자인한 사람의… 몸을 형상화 한거라나;;;

카지노 전경. (돈 쉽게 번다;;;)

호텔 정면.

sky park

sky park의 lap pool.

관광객(투숙객 말고)이 아직 많고… 레스토랑은 안 열었지만…

생각보다 꽤 괜찮았던 곳.

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It is an open secret that Singapore’s Prime Minister Lee Hsien Loong is the highest paid political leader in the world, but the figures still appear shocking nevertheless when his salary is ranked alongside that of others.

In a report published by The Economist this week, PM Lee tops the list of the salaries of selected leaders – he is paid more than 40 times Singapore’s GDP per person, an astonishing statistic considering the fact that Singapore is one of the smallest country in the world with a land mass of only 700 square meters.

In contrast, India’s Prime Minister Manmohan Singh who is the leader of the 7th largest country in the world is paid less than one time the country’s GDP per person.

PM Lee is paid more than S$3 million dollars a year, or more than 5 times the annual salary of U.S. President Barack Obama. On top of his salary, he is entitled to a pension for life (even upon stepping down) amounting to two-thirds of his last-drawn pay.

Despite disgruntlement among Singaporeans at the obscene pay packages of their leaders, they continue to insist that they be paid at “market rates” pegged to the private sector in order to retain their “services” in government.

The median salary of an average Singapore worker is only $2,400 monthly compared to a junior minister who can expect to take home more than $160,000 in the same period of time.

PAP ministers and MPs are expected to get a hefty 8.8 percent or more pay hike at the end of the year on the back of an improving economy.

http://www.temasekreview.com/2010/07/06/singapore-pm-lee-has-highest-salary-among-world-leaders/

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City of London Corporation 에서 실시하는 Global Financial Centres Index에 따르면 싱가포르 금융센터 경쟁력 순위가 영국(런던), 미국(뉴욕), 홍콩을 이어 세계 4위로 나타났습니다. 이번 조사는 People, Business Environment, Market Access, Infrastructure 카테고리를 중심으로 조사되었으며 TOP 10 순위는 아래와 같습니다.

금융센터 경쟁력 TOP 10

1. London, United Kingdom
2. New York City, United States
3. Hong Kong
4. Singapore
5. Tokyo, Japan
6. Chicago, United States
7. Zurich, Switzerland
8. Geneva, Switzerland
9. Shenzhen, China
10. Sydney, Australia

* Global Financial Centres Index is a ranking of the competitiveness of financial centres based on 26,629 financial centre assessments from an online questionnaire together with over 60 indices. It is compiled by Z/Yen Group and published twice a year by the City of London Corporation

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Much has been made of the role of ‘Independent Directors’ in Singapore. Differing opinions have emerged regarding the responsibility of an ‘Independent Director’ but there has been little or no discussion surrounding the fundamental question of whether the concept of the ‘Independent Director’ is a legal reality or a myth. In order to settle the legitimacy of the office of the ‘Independent Director’, this question
needs to be considered.

THE COMPANIES ACT AND COMPARABLE LEGISLATION
The Companies Act makes no distinction between Independent, Non-Executive, or Executive Directors with regard to their responsibility as a Director. The Act merely states that ‘a Director shall at all times act honestly and use reasonable diligence in the discharge of the duties of his office’. It neither defines nor indicates the existence of the position of an ‘Independent Director’. Therefore, there is no formal recognition of ‘Independent Director’ by the local laws. The relevant laws in the UK, Australia, and Hong Kong offer the same definition of Directors’ duties, following the common law principle that ‘Directors must act bona fide in the interests of the company’. It should be noted, however, that the Hong Kong’s Securities and Futures Commission hasrecognised that’ there is a growing general expectation by market commentators that independent non-executive directors are appointed to the board to represent the minority shareholders’. This is the stance that minority shareholders have taken in Singapore.

ORIGIN OF THE NOTION OF THE ‘INDEPENDENT DIRECTOR’ IN SINGAPORE
The Code of Corporate Governance (‘the Code’), which lacks the force of law, introduced the notion of the ‘Independent Director’ in Singapore. Clause 2 of the Code, entitled ‘Board Composition and Balance’, advocates ‘a strong and independent element’ on the Board. It defines an Independent Director as ‘one who has no relationship with the company, its related companies or its officers that could interfere, or reasonably perceived to interfere, with the exercise of the Director’s independent business judgement with the view to the best interests of the company’. It illustrates four relationships as examples of situations which would deem a director to lack independence. The Code promotes independence on the Board by stipulating that an ‘Independent Director’ should be able to exercise objective judgment on corporate affairs, in particular, independent of management. It further declares, ‘No individual or small group of individuals should be allowed to dominate the Board’s decision making.’ The Code falls short, however, of expressly mentioning independence from majority shareholders. Whilst it seeks to preserve the independence of ‘Independent Directors’, there is nothing in the Code to ensure the successful implementation of this noble objective. Further, the Code does not provide any mechanism to achieve its objective.

LACK OF ‘INDEPENDENCE’ IN THE OFFICE OF INDEPENDENT DIRECTORS
As the law stands, the majority shareholder(s) can dictate the composition of the Board. Although all shareholders can vote on the appointment of Directors, the dominance of the majority ensures that their nominees prevail. This undermines the implied objective of the Code. To be truly ‘Independent’, a Director cannot be, nor perceived to be, controlled. It is fallacious to expect an ‘Independent Director’ to exercise his or her mind impartially against the wishes or interest/s of the majority shareholder(s), when the tenure of his or her office depends on their appointment by the majority shareholder(s). If the authors of the Code were serious about practically ensuring a’strong and independent element on the Board’, then the Code should stipulate that the appointment of Independent Directors should be made by an independent party and not by the majority shareholder(s).

In the recent case of Isetan, minority shareholders attempted to unseat three non-executive directors whom they referred to as ‘Independent Directors’. The move arose because of the alleged failure by these directors to ensure that the Board resolves to distribute the Section 44A tax credit to shareholders. This clearly demonstrates the expectations of minority shareholders that non-executive directors display independence in decision-making at Board level.

Although it is well accepted that the duty of all directors is to protect the interests of shareholders including minority shareholders, it is the so-called ‘Independent Directors’ who are entrusted by the minority shareholder(s) to protect their interests. In spite of their appointment by majority shareholder(s), ‘Independent Directors’ are expected to pay particular attention to the interests of the minority shareholder(s). It is this juxtaposition that diminishes the actual and perceived independence of ‘Independent Directors’. This is especially true when their interests may be compromised by the expectations of the majority shareholder(s). As a guiding principle, they should always act impartially, looking out for the best interest of the company, its shareholders and in particular its minority shareholders. ‘Independent Directors’ should discharge their duties without fear or favour.

Until such time that the appointment of ‘Independent Directors’ is made by an impartial source, it is questionable
whether there will ever be a ‘strong and independent element on the Board’. Securities Investors Association (Singapore) (SIAS), Singapore Institute of Directors (SID), Association of Chartered Certified Accountants (ACCA), the Institute of Certified Public Accountants of Singapore (ICPAS) and the Law Society could together play a pivotal role here on behalf of minority shareholders. They could provide suitable candidates as ‘Independent Directors’ to corporate Boards. The ‘Nomination Committee’ could then invite the nominees from these institutions or from minority shareholders of the company directly to the Board.This would demonstrate a fundamental desire to promote independence. For this to eventuate, there must be momentum from legislative quarters and a similar ‘corporate will’ to adopt this position on their Board. Until such time, the concept of the ‘Independent Director’will remain a myth to the detriment of minority shareholders.

David Gerald
President & CEO
Securities Investors Association (Singapore)

(http://www.sias.org.sg/sites/sias.org.sg/CMS/File/singaporeInvestor/fa-davidgeraldMarch.html)

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