SINGAPORE BUS SERVICE LIMITED (Vested interests of owners and management staff)

[Mr Speaker in the Chair]

Encik Abdul Aziz Karim asked the Minister for Communications if he has been informed by the owners and management staff of the Singapore Bus Service (Private) Limited of their vested interests in finance, insurance, motor garages, motor repair shops, petrol service stations, tyre shops, motor spare part shops and other concerns which have dealings with the Company; and if he has taken all possible steps to ensure that there are no contrivances of irregular and improper practices amongst such business concerns which may be considered to be against the public interest.

The Minister for Communications (Mr Yong Nyuk Lin): Sir, as there are no statutory requirements under the Companies Act (Chapter 185) or the Bus Services Licensing Authority Act, 1971, for owners and management staff of the Singapore Bus Service Ltd to declare to the Ministry of Communications "their vested interests in finance, insurance, motor garages, motor repair shops, petrol service stations, tyre shops, motor spare part shops and other concerns which have dealings with SBS", before SBS was issued with licences to operate on the approved routes under the Bus Services Licensing Authority Act, there was no cause for them to inform me of their interests, if any.

However, during the course of the weekly meetings of the Bus Services Reorganisation Committee (BSRC) since October, 1973, SBS's interests in two companies which appear to have a bearing on SBS operations did come to my notice, namely:-

(a) At the BSRC meeting on 18th December, 1973, information was given that two directors of Green Bus Company, which Company constitutes part of the United Bus Co, and which in turn forms a component part of SBS, would appear to be closely associated with Soon Chow Corpn. (Pte) Ltd which is known to build the bodywork of many new buses for SBS.

(b) On 19th March, 1974, information was made available to the BSRC that the Managing Director of SBS is also a Director of Inter-Island Transport Maintenance (Pte) Ltd, which was formed to enable SBS to maintain its fleet of buses as well as to purchase spare parts more expeditiously and get on with the early repair of a large part of its immobilised bus fleet, as the present method of ordering spare parts through agents of 17 different makes of buses proved unsatisfactory because of great price fluctuations and also inability to deliver on schedule for the orders made.

In view of the fact that one of the conditions for the bus fare revision authorised by my Ministry on 10th February, 1974, has fixed a ceiling to the annual profits which SBS would be allowed to earn over the next three years (namely, 8% of its net assets, i.e, net book value of Buses less Hire purchase obligations) as certified by its auditors, BSRC has since been instructed to request all shareholders and senior management staff who have the authority to make purchases or authorise repairs and services for SBS to make such declarations of their interests in related business, to the Bus Services Licensing Authority within one month. Amending legislation will be introduced soon, to make such declarations mandatory.

The Member for Kallang can be assured that all reasonable steps will be taken by my Ministry to ensure that SBS and its associated companies, when disclosed, will conduct their activities in a proper and business-like manner, and should any action against public interest be discovered whoever responsible will be suitably dealt with under the law.

Finally, the Member for Kallang may be aware that present legislation requires Directors of Companies to make full disclosure of their respective interests at meetings when contracts with the company are being dealt with, under section 131 of the Companies Act (Cap. 185). Failure on the part of directors to disclose such material interests, if brought to the notice of the Registrar of Companies, can render the person liable for appropriate penalties under the Companies Act.