Ministerial Statement by SM Teo Chee Hean on the Review of the Rentals of State Properties at 26 and 31 Ridout Road on 3 July 2023 at Parliament

Mr Deputy Speaker Sir

Members have asked several questions about the renting out of two Black and White bungalows, No. 26 and No. 31 Ridout Road, by the Singapore Land Authority, or SLA, to the Minister for Law and Home Affairs Mr. Shanmugam and the Minister for Foreign Affairs Mr. Vivian Balakrishnan respectively. Minister Edwin Tong and I will be delivering Ministerial Statements on this matter. Our Statements will address Oral Question Nos 1 to 23 and Written Questions Nos 1, and 9 to 13 on today’s Order Paper.

Mr Gan Thiam Poh, Mr Leon Perera, Ms Hazel Poa, and Mr Alex Yam have filed Oral and Written Questions scheduled for future Sittings on this matter. As today’s Ministerial Statements will address those questions as well, I invite these Members to seek clarifications, should they have any, on this matter after the Ministerial Statements.And should their queries be sufficiently addressed, it may not be necessary for them to proceed with their PQs for future Sittings.

On 17 May 2023, Prime Minister Lee had tasked the Corrupt Practices Investigation Bureau, or “CPIB”, to investigate and determine if there was any corruption or criminal wrongdoing in the rental transactions of the Ridout Road State properties by the two Ministers. Ministers Shanmugam and Balakrishnan had also spoken to PM Lee to ask for a review that is independent of the ministries and agencies that they oversee.

On 22 May 23, Prime Minister Lee tasked me to review the matter, and establish whether proper processes had been followed, and if there had been any wrongdoing.

Both the CPIB investigation and the Review have been completed. On 28 June 2023, the Prime Minister submitted a Miscellaneous Paper to this House attaching the report of my Review as well as the report by CPIB. Members would have had the opportunity to read and scrutinise the two reports.

I will now summarise the findings of my Review, which I should emphasise, relies on CPIB’s findings and report, before addressing questions on specific matters which Members had filed.

Objective of Review

The Review sought to achieve three objectives.

a. First, to establish the facts surrounding the renting out of the two properties at No. 26 and No. 31 Ridout Road.

b. Second, to establish if there was any wrongdoing, including any abuse of power or conflict of interest, resulting in the Ministers gaining an unfair advantage or privileges.

c. Third, to establish whether the policies and processes governing the renting out of Black and White bungalows were followed in renting out the two properties, and if there were any process gaps or lapses.

As the Prime Minister had already directed CPIB to investigate the renting out of the two properties for corruption or criminal wrongdoing, it was decided, in consultation with the Prime Minister, that my Review would rely on CPIB’s investigation to establish the facts surrounding the renting out of these two specific properties. Sir, investigations by CPIB are carried out by professional investigators, and empowered by the Prevention of Corruption Act, under which persons required by CPIB to provide information are legally bound to provide accurate information. Hence, CPIB’s investigation findings would be independent, thorough, and authoritative.

In its investigations, the CPIB conducted interviews with the two Ministers and their spouses, former and current officers from MinLaw, SLA and NParks, property and managing agents, who had knowledge of the rental transactions of the two State properties. The CPIB also obtained evidence from documents and other information related to the rental transactions and parties involved – including through contemporaneous phone records, Whatsapp messages, and SMSes. I would like to place on record my thanks to the CPIB officers for their diligence and attention to detail in conducting their investigations into these cases.

Sir, I trust Members realise the import, the meaning, the weight, of the Prime Minister asking CPIB to investigate this matter. The agency reports directly to him, the Prime Minister, – not to the Minister of Home Affairs, or to me, for that matter, the Coordinating Minister for National Security. Moreover, the Director of CPIB can go directly to the President if the Prime Minister stops him from investigating a possible crime – the Constitution provides the CPIB Director that right. There is no more thorough, persistent, and I daresay, even fearsome investigative body in Singapore. That the Prime Minister did not hesitate to call in the CPIB in to investigate two senior ministers is a signal how seriously we take such matters of incorruptibility and its absolute value in our system.

In addition to CPIB’s investigation, I asked the Ministry of Law to provide a detailed briefing on the policies and processes governing the management of Black and White bungalows.

My review therefore relied on CPIB’s investigation findings on the renting out of the two properties, and a review of the policies and processes governing the management of Black and White bungalows, to come to its conclusions.

Chronology of events for the rentals of No. 26 and No. 31 Ridout Road

Several Members, Mr Zhulkarnain, Mr Murali Pillai and Mr Pritam Singh, asked about the rental process. Let me summarise for this House the key facts of the case, as established by the CPIB investigation¹.

No. 26 Ridout Road

The No. 26 Ridout Road State property had a land size of 9,350 sqm then. It had been vacant since December 2013. Mr Deputy Speaker Sir, I will quote liberally verbatim from the CPIB report because it is authoritative, independent, and established the facts. Similarly, my report which was submitted by the Prime Minister to Parliament, quotes liberally verbatim from the CPIB report, and members would have seen those sections in italics. I cannot speak in italics, but I will tell members which parts of my statement I am quoting directly from the CPIB report. So let me quote directly from CPIB for the next few paragraphs.

In January 2018, Minister Shanmugam appointed a property agent to represent him for the rental transaction of the No. 26 Ridout Road State property. By then, the property had been vacant without attracting any bids for more than four years.

During a site visit, Minister Shanmugam noticed thick and overgrown vegetation on an empty slope of land adjacent to the property. Minister Shanmugam expressed his concern to SLA that the overgrown vegetation might pose public health and safety risks from snakes, mosquitoes and fallen trees.

Through his property agent, Minister Shanmugam negotiated with SLA on clearing of the adjacent land before leasing the property. He was not confident that the adjacent land would be maintained in a way that would keep the place free of health and safety issues. He offered to maintain the adjacent land at his own cost. Minister Shanmugam stated in his interview with CPIB that he had not wanted to lease the additional adjacent land as there would be legal obligations attached to leasing it.

SLA’s view was that the tenant’s responsibility would not extend to maintain the area beyond the tenant's property boundary. If Minister Shanmugam was to maintain the adjacent land at his own cost, the adjacent land had to be included into the tenancy of the No. 26 Ridout Road State property. SLA then did the fencing of the adjacent land within the property boundary. As a result, the land size was increased from 9,350 sqm to 23,164 sqm.

The cost of site clearance, replanting of greenery and fencing was $172,000 which was initially borne by SLA and subsequently to be recovered from the tenant’s rent. The cost of maintaining this additional land, approximately $25,000 per year, was incurred by Minister Shanmugam which would otherwise be borne by SLA.

Minister Shanmugam and his agent were not aware of the Guide Rent. His agent studied the rental of comparable neighbouring properties, and independently determined and valued the rent. Minister Shanmugam instructed his property agent that he should not be paying less than his neighbours. A neighbouring unit was tenanted at $26,000. The final negotiated rent amount was $26,500, which met the minimum rental to be achieved by SLA.

As the property had not been in use since 2013, substantial repairs were needed. The total cost of essential repair works borne by SLA to restore No. 26 Ridout Road State property was $515,400. The landlord, i.e. SLA, has the responsibility to undertake essential repair works to ensure that the condition of the property is habitable. Minister Shanmugam paid $61,400 to build the car porch. In addition, he stated in his interview with CPIB that he paid over $400,000 for additional improvement works to the State property not covered by SLA’s restoration works.

Mrs. Shanmugam signed the Tenancy Agreement of 3+3+3 years in June 2018. After the first 3-year term, the tenancy was renewed in June 2021 for a second 3-year term. The rental for the second term was maintained at $26,500 per month, as determined by SLA, considering the then prevailing market condition.

Unquote. The preceding paragraphs were all quoted verbatim from the CPIB report.

31 Ridout Road

For the rental of 31 Ridout Road, the key facts are as follows. Again, the next few paragraphs are quoted verbatim from the CPIB report.

The No. 31 Ridout Road State property, of land size 9,157.36 sqm, had been vacant since July 2013. It was listed on the State Property Information Online website. The property had been vacant for 5 years before two unsuccessful bids were made below the prevailing Guide Rent, i.e. $12,000 in July 2018 and $5,000 in August 2018.

Mrs. Balakrishnan came across a “For Lease” sign at the No. 31 Ridout Road State property. She contacted the SLA’s appointed MA on 11 September 2018 and they negotiated on the rental price. The MA named an asking rent of $19,000. Mrs. Balakrishnan offered $19,000 with the inclusion of essential repair works and upgrading of the toilet. The MA rejected the toilet upgrading as it was considered to be improvement works, and Mrs. Balakrishnan subsequently agreed to bear the costs of the toilet upgrading. The asking rent for the No. 31 Ridout Road State property was independently determined and valued by the MA. Neither Minister Balakrishnan nor Mrs. Balakrishnan were aware of the Guide Rent. The SLA Leasing Department subsequently accepted the lease proposal, because the final secured rent of $19,000 was not below the prevailing Guide Rent, which was $18,800.

The total cost of essential repair works borne by SLA to restore the No. 31 Ridout Road State property was $570,500. Minister Balakrishnan stated in his interview with CPIB that he paid more than $200,000 on additional improvement works to the State property.

The tenancy agreement for 3+2+2 years was signed by Mrs. Balakrishnan in October 2019. After the first 3-year term, Mrs. Balakrishnan requested and was granted a renewal of another 3+2-year term instead of 2+2-year term (that was earlier granted). The rental for the second term was increased from $19,000 to $20,000 per month, taking into consideration the then prevailing market conditions in 2022.²

Unquote. Again, I must emphasise that these preceding paragraphs were from CPIB’s report.

Concerns over Rentals of No. 26 and No. 31 Ridout Road

Let me now address the key questions raised by several members. I will address questions on the rental transactions of these two properties while Minister Edwin Tong will address questions regarding SLA’s policies and practices in the management of state properties in general.

Mr Sitoh Yih Pin asked whether the two Ministers’ tenancies at Ridout Road from SLA have been handled without any corrupt behaviours.

Let me quote verbatim again from CPIB’s report to the Prime Minister.

“CPIB has found no evidence of corruption or criminal wrongdoing in the two rental transactions of the Ridout Road State properties by Ministers Shanmugam and Balakrishnan.

In CPIB’s view, the Direct Tenancy rules were applied fairly for both rental transactions. The investigation did not reveal any corrupt intent on the part of any person, or any inducement given to any individual involved in the processing of the rentals.

CPIB found no preferential treatment given to the Ministers and their spouses, and no disclosure of privileged information in the process of the rental transactions. There was no evidence to suggest any abuse of position by the Ministers for personal gain”.

Unquote.

The CPIB has submitted its Investigation Papers to the Attorney-General’s Chambers. The AGC has reviewed and agreed with CPIB’s findings and recommendations, and directed that no further action be taken.

Mr Dennis Tan, Mr Murali Pillai, Mr Louis Chua, Mr Alex Yam and Ms Hazel Poa asked whether there was any conflict of interest involved in the renting of the two properties to Ministers Shanmugam and Minister Vivian Balakrishnan, and if the Ministers had complied with the Code of Conduct for Ministers.

The Review concluded that there was no conflict of interest in the rental of these two properties. Both the Ministers and the public officers involved duly declared any potential conflict of interest and followed the proper processes to prevent any actual conflict of interest from arising.

In the case of No. 26 Ridout Road, as Minister Shanmugam is the Minister for Law and the Ministry of Law oversees SLA, a conflict of interest could have arisen if Minister Shanmugam had remained in the chain of command exercising authority over the renting out of this property. And had Minister Shanmugam made decisions that affected his rental of No. 26 Ridout Road, that would have been an actual conflict of interest. So it could have been a conflict of interest and if he had taken any decisions affecting his own rental, that would have been an actual conflict of interest.

However, Minister Shanmugam had removed himself from the chain of command and decision-making process entirely. CPIB established that Minister Shanmugam informed the then Deputy Secretary of the Ministry of Law that he would recuse himself on any discussion related to the rental of the property. Minister Shanmugam also instructed the then Deputy Secretary to approach the then Senior Minister of State in MinLaw, Ms Indranee Rajah, in the event any matter had to be referred to the Minister. Minister Shanmugam had also informed me that if the matter had to go beyond SMS Indranee, she would approach me. CPIB established that there was no matter raised by SLA to MinLaw and hence, to any of the Ministers during the entire rental process.

Minister Shanmugam had recognised the potential conflict of interest, duly declared it to me, and took effective steps to eliminate this potential conflict. This prevented any actual conflict from arising. Mr Deputy Speaker, I wish also to state that as no matters were raised to me regarding any aspect of the rental transaction, I am not an involved party in the rental process.

CPIB found that due diligence checks were also carried out before the signing of the Tenancy Agreement for the No. 26 Ridout Road State property. The then Chief Executive of SLA made a declaration dated 29 March 2018 to the then Permanent Secretary of MinLaw and reported that the processing of the rental transaction was properly done with no conflict of interest. In response to the PS/MinLaw’s queries, the Chief Executive of SLA assured him that the proposed rental was according to market rate with assessment done by SLA valuers, independently of the SLA leasing officers. He also confirmed that the tenancy agreement was a standard form for all other residential tenancies.

In the case of No. 31 Ridout Road, no issue of conflict of interest arose because Minister Balakrishnan’s official responsibilities did not include SLA. CPIB also found that there was no preferential treatment given in the process of the rental transaction. In fact, CPIB found that in response to the MA’s query on policy for VVIPs, the SLA Leasing Manager had emphasised in her email reply that there was no policy for VVIPs, and all prospects and tenants were to be treated equally.

Ms Hazel Poa asked what are the current rules and processes for Cabinet Ministers to declare conflicts of interest and whether there are any plans to strengthen such rules and processes.

A Code of Conduct for Ministers has been in place since 1954 and was last updated in 2005. Ministers and other Political Office Holders are notified of this Code at the start of each term of office and whenever a new Political Office Holder is appointed. The Prime Minister also issues Rules of Prudence after every election to all Members of Parliament of the People’s Action Party. These Rules are released to the media, with the latest version released in August 2020.

The Code clearly states that a Minister must not direct or request a civil servant to do anything or perform any function that may conflict with the Civil Service’s core values of incorruptibility, impartiality, integrity, and honesty. Ministers are expected to be scrupulously above board and to ensure that there is no real or perceived conflict between their official duties and private interests.

The Code and Rules set out the principles to be applied. The Code of Conduct and the Rules of Prudence also give examples to illustrate the application of the guidelines, but these examples are not exhaustive, in fact the Code says the examples are not exhaustive, as it is not possible to lay out specific rules governing behaviour for every single situation.

For the Public Service, the Code of Conduct is set out in the Instruction Manual. All public officers must take an annual Code of Conduct quiz and make the necessary declarations such as being free of financial embarrassment, their investments in non-owner-occupied properties, and their investments in private firms. They are also required to make ad hoc declarations of purchases of private residential properties, commercial properties, and land.

The principles laid out in the Codes of Conduct adequately cover any potential conflict of interest that could have arisen, including in this case. Both the Ministers and the public officers, as well as private sector intermediaries involved, conducted themselves properly in the two rental transactions. They were aware of their duty to declare and avoid any conflict of interest and they took appropriate steps to prevent any potential or actual conflict of interest from arising. Mr Deputy Speaker, it is more important to observe the spirit rather than just the letter of the Codes.

Nevertheless, the Public Service will reference this case as an additional example to reinforce the importance for public officers to act with integrity.

In addition, the Public Service Division will work with relevant Ministries and statutory boards (such as HDB, JTC, NEA and SLA) to introduce a standard declaration requirement for selected groups of officers who have access to, or are involved in, leasing and valuation matters. Officers in these organizations who have access to privileged information and/or can influence the outcomes of decisions will have to make a declaration before they can rent government properties managed by their agencies. The officer will have to declare that he has taken adequate steps to prevent any conflict of interest from arising, e.g. by recusing himself from overseeing or processing the transaction. These properties will include commercial and residential state properties; such as black and white bungalows, terraces, factory/office spaces, business parks, shops in neighbourhood centres, hawker and market stalls.

The Prime Minister will also review the declarations required for property transactions for Ministers and PAP Members of Parliament.

Mr Murali Pillai, Mr Pritam Singh and Mr Sitoh Yih Pin asked whether the Ministers benefitted from privileged information or from favourable rental rates.

The Review concluded that the Ministers did not benefit from any privileged information.

CPIB found no preferential treatment given to the Ministers or to their spouses, and no disclosure of privileged information in the process of the rental transactions. There was no evidence to suggest any abuse of position by the Ministers for personal gain.

CPIB established that the availability of No. 26 and No. 31 Ridout Road for lease was public information. Both properties had “For Lease” signs displayed prominently at the gates of these properties, and in addition No. 31 was listed on the State Property Information Online website.

The Guide Rents were not revealed to Minister Shanmugam and his agent nor to Minister and Mrs Balakrishnan.

The Review also established that the rental rates paid by both Ministers were at fair market value and not below market valuation. There was no evidence that the Ministers were given favourable rental rates due to their positions.

With your permission Sir, may I ask the Clerks to distribute some handouts which are already Annexes to the Review Report submitted to Parliament. Members would be familiar with it. Members may also access the handouts through the MP@SGPARL app. These show the rental rates for transactions involving Black and White bungalows in the Ridout Road Estate at the material time in 2018 and 2019. So these were new transactions at the material time in 2018 and 2019.

Chart 1 shows that in 2018, the rental per unit gross floor area for the Black and White Bungalow at No. 26 Ridout Road was $30.94 per sqm per month. This was comparable to that for the other Ridout Road properties, which ranged from $26.00 per sqm per month to $33.33 per sqm per month. These are averages.

Chart 2 shows that in 2019, the rental per unit floor area for No. 31 Ridout Road at $23.05 per sqm per month was slightly lower than the range of $25.00 to $33.33 per sqm per month for other Ridout properties that were tenanted out at the material time. However, this was due to the condition of the property. This rental of $23.05 per sqm per month was comparable to other properties of “Average” condition at that time.

When the tenancies of the two properties were up for renewal after the initial 3 years, a revaluation was done to peg the rentals to the prevailing market rate, i.e. to mark them to market. This valuation was also based on market comparables. The property at No. 26 Ridout Road was renewed in Jun 2021 for 3 years with the rent maintained at $26,500 per month. The property at No. 31 Ridout Road was renewed in Oct 2022 for 3 years with the rent increased to $20,000 per month, from $19,000 per month.

However, CPIB discovered that there was a lack of precision in the SLA’s use of the term “Guide Rent” for No. 26 Ridout Road. As a result of this lack of precision, the earlier SLA statement dated 12 May 2023 that the offer by the tenant, that is $26,500, was above the Guide Rent was incorrect. In fact, the $26,500 rental Minister Shanmugam paid was equal to the correct Guide Rent on the property.

I would like to take Members through what CPIB’s investigation found.

The Guide Rent of No. 26 Ridout Road, with the original land area of 9,350 sqm, was established by the SLA’s Valuer as $24,500.

From Feb 2018, SLA and Minister Shanmugam (through his appointed agent) negotiated the rental of No. 26 Ridout Road.

Both sides discussed the clearance of the heavily vegetated adjacent land which posed potential public health and safety concerns. Minister Shanmugam offered to maintain the adjacent land at his own cost if SLA cleared the vegetation. He told CPIB that he preferred to exclude the land from his tenancy, as there would be legal obligations attached to including the adjacent land. However, SLA’s preference was to include the adjacent land within the property boundary. That would make it clear that responsibility for maintaining the land would fall on the tenant, as would the legal obligations (e.g. the tenant would be responsible for any mosquito breeding).

SLA negotiated an agreement with the prospective tenant in which the adjacent land would be included within the property boundary, with the tenant responsible for maintaining it. This would make the responsibilities clear, and the tenant rather than SLA would bear the obligations and the cost of maintaining the land.

Minister Shanmugam initially offered a rental of $25,000 per month, based on his agent’s advice. He instructed his property agent that he should not be paying less than his neighbours. A neighbouring unit was tenanted at $26,000. SLA proposed a rental of $26,500 and this was agreed by Minister Shanmugam.

SLA wanted to recover from the tenant the cost of land clearance and new fencing to amalgamate the cleared land. SLA’s Leasing Division calculated that SLA needed to recover an amortised cost of $2,000 per month from the tenant, over the duration of the tenancy. This includes interest.

The SLA’s Leasing Division then asked the SLA’s Valuer, what the impact would be on the Guide Rent if the plot was enlarged, the additional land cleared, and SLA recovered the amortised cost of the land clearance from the tenant as part of the monthly rental. The SLA’s Valuer told CPIB in the interview that in her view the Guide Rent for the larger land area of 23,164 sqm, once cleared of vegetation, should be $26,500. But if the tenant paid the clearance costs, then the Guide Rent of $24,500 could be maintained.

Throughout this episode, the SLA Valuer did not know the identity of the prospective tenant. The SLA Valuer said that she only learnt that the tenant was Minister Shanmugam after the matter was reported in the media. The SLA Valuer also did not know the rental amount which the Leasing Division had negotiated with the tenant.

The SLA’s Leasing Division then added the amortised cost of $2,000 per month to what the Leasing Division treated as the Guide Rent of $24,500, calculated the minimum rental to be achieved at $26,500, and confirmed that the agreed rental of $26,500 met this threshold.

Sir, as the “Guide Rent” should be the minimum rental to be achieved, SLA should have assessed the Guide Rent for No. 26 Ridout Road with the additional cleared land at $26,500. Instead, SLA treated the Guide Rent as $24,500, but with the additional $2,000 amortised cost to also be recovered. Mr Deputy Speaker, I should report that SLA accepts CPIB’s observations and finding on this point.

CPIB found that despite the imprecise use of the term Guide Rent, SLA was always clear that the minimum rental to be achieved was $26,500 and ensured that Minister Shanmugam paid not less than this amount. CPIB has also confirmed that this lack of precision in the process of deriving the Guide Rent did not result from any ill intent on the part of any SLA officers involved. It found no evidence of any mala fide abuse of position in the valuation. This is also covered in CPIB’s report.

Mr Sitoh Yih Pin and Ms Hazel Poa asked whether the terms of the lease agreements of these properties were standard as compared to other Black and White Bungalows managed by SLA. Mr Leong Mun Wai and Mr Leon Perera asked about the costs incurred in maintenance and upgrading works for these two properties.

Mr Deputy Speaker, the review established that the tenancy terms and renewal of both properties were in accordance with the general policies guiding tenancy, and renewal of tenancies for residential properties managed by SLA.

Tenancies are granted on 2-year or 3-year terms, and up to a maximum of 3+3+3 years in the first instance when entering into a tenancy agreement. In deciding on the length of the tenancy, SLA will take into account various factors, including the likely capital expenditure that the tenant will incur to live in the property. Under the terms of the tenancy agreement, all approved improvements undertaken by the tenant that remain usable, will subsequently become the property of the landlord and revert to State ownership upon return of the property. As such, tenants who incur substantial capital expenditure for improvement works will be granted longer tenure, to allow for the amortisation of their expenses over a longer period.

Both the tenancy periods of No. 26 and No. 31 Ridout Road were within the maximum allowable tenancy of 3+3+3 years for residential properties rented out by SLA or SLA’s MAs at any one time.

In the case of the No. 26 Ridout Road, SLA granted a tenancy of 3+3+3 years because Mrs. Shanmugam had committed to undertake improvement works at a cost in excess of $400,000. In the case of No. 31 Ridout Road, SLA had granted a tenancy of 3+2+2 years upfront as Mrs. Balakrishnan had committed to undertake improvement works totalling over $200,000. At the first renewal, Mrs. Balakrishnan requested for, and SLA agreed, to an extension of 3+2 years. This was also within the cap of 3+3+3 years tenancy that SLA can grant, at any one time.

The Review also concluded that the works done for the two properties were in keeping with SLA’s general practice. As the landlord, it is the responsibility of the SLA to ensure that the properties rented out are in a reasonably good condition so that tenants are able to reside in these properties safely.

With your permission Sir, may I ask the Clerks to distribute the second set of handouts. Let me refer Members to Chart 3. It shows the scope of the works done by SLA for No. 26 Ridout Road and No. 31 Ridout Road, compared to the works done for other SLA Black and White properties.

The works for No. 26 Ridout Road totalled $515,400. The works included general building repairs; electrical rewiring; water pump repair; sewerage repair; horticultural works; road and fencing repairs and treatment for termites. Members can get a sense of the nature and scope of the works done from the pictures at Handout No. 4.

The works for No.31 came to $570,500. This comprised general building repairs, roof repair and water-proofing; electrical rewiring; replacing the water tank; horticultural works; road and fencing repairs; and treatment for termites. Members can get a sense of the nature and scope of the works done from the pictures at Handout No. 5.

The works done by SLA for No. 26 and No. 31 Ridout Road were to make both properties safe and habitable. The scope of works is comparable to that for other SLA black and white properties as Chart 3 shows.

The valuation of the property will have factored in the condition of the property after works are done to bring them to a habitable condition. SLA did a cost-benefit analysis to confirm that the rent that can be recovered will more than justify the works over the expected service life of these works, which can be 10 years or more. Once rented out, the tenant is responsible for the proper maintenance of the property. CPIB’s report also stated that “SLA policy is that upon expiry of the lease, the tenant is responsible for repairing any damage to the property, where appropriate. The property with any improvements approved by SLA will be surrendered to SLA as is, without any right of claims or recovery of costs by the tenant”.

An additional piece of work relating to No. 26 Ridout Road was the clearance of the heavily vegetated land. SLA recovered the costs from the tenant by amortising it at $2,000 per month over the lease period. An example where SLA also cleared land to address disamenities, is at a State property in Dalvey Estate in 2019. SLA carried out partial site clearance even after the tenancy started, due to feedback from the surrounding neighbours and the tenant on mosquito breeding, which was not resolved despite repeated fogging.

Conclusion

Mr Deputy Speaker, let me conclude.

The two ministers had requested the Prime Minister to carry out a review into the rentals of No. 26 and No. 31 Ridout Road. As I stated earlier, that the Prime Minister had directed the CPIB to investigate the matter shows his determination to establish the facts of the case and get to the bottom of the matter.

The Review arrived at three key conclusions, drawing substantially from CPIB’s independent report.

First, the CPIB found no evidence of corruption or criminal wrongdoing in the two rental transactions of the Ridout Road State properties by Ministers Shanmugam and Balakrishnan. CPIB found that the Direct Tenancy rules were applied fairly for both rental transactions. The investigation did not reveal any corrupt intent on the part of any person, or any inducement given to any individual involved in the processing of the rentals. CPIB found no preferential treatment given to the Ministers and their spouses, and no disclosure of privileged information in the process of the rental transactions. There was no evidence to suggest any abuse of position by the Ministers for personal gain.

Second, both the Ministers and the public officers, as well as private sector intermediaries involved, conducted themselves properly in the two rental transactions. They were aware of their duty to declare and avoid any conflict of interest and took appropriate steps to prevent any potential or actual conflict of interest from arising. Sir, this is testimony to the integrity of our officers. I want to thank our officers for acting professionally and with integrity in carrying out their duties. I should add that the thorough investigations by CPIB proceeded smoothly because the persons interviewed, including Ministers and their spouses, public officers and private sector managing and property agents, were forthcoming and cooperative allowing the investigations to proceed smoothly.

Third, the rental of the State properties at No. 26 and No. 31 Ridout Road by the SLA to Minister Shanmugam and Minister Balakrishnan did not deviate from the prevailing SLA guidelines and approaches in renting out Black and White bungalows for residential purposes.

Mr Deputy Speaker Sir, this episode demonstrates the paramount importance of maintaining high standards of integrity and accountability in the government and nationally. The extensive questions posed by Members from both sides of the House reflect the importance we place on the integrity and quality of Singapore’s system of government. So Mr Deputy Speaker Sir, let us continue, generation after generation, to instil strong values in our people, especially the men and women in politics and public service, to continue serving with Integrity and Excellence, even when no one is looking.

I will be ready to answer any clarifications that Members may seek after my colleagues have made their statements.

Thank you very much, Sir.

* * * * *

¹ Text in italics is from the CPIB report
² CPIB Report, paras 27-31

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