HAW PAR BROTHERS INTERNATIONAL LTD (Progress in investigations)

Mr Hwang Soo Jin asked the Minister for Finance what progress has been made in the investigations into the affairs of Haw Par and in particular (a) what further evidence has been obtained to substantiate the allegations against those former directors of the Company who had participated in Spydar Securities Ltd; (b) what steps have been taken to ensure the co-operation of the authorities in Kuala Lumpur, London and Hong Kong; (c) whether he will inform the House of the reason for the resignation of Mr G. Starforth Hill as an Inspector and whether Mr Hill's resignation would in any way impede the course of the investigation; (d) whether the validity of the loan of US$29 million from Slater Walker Securities Lid to Haw Par is being investigated; and (e) what steps the Board of Directors of Haw Par have taken, or propose to take, with a view, to strengthening the management of the Company.

The Minister for Finance (Mr Hon Sui Sen): Mr Speaker, Sir, I am not yet in a position to report to the House the progress made as the investigations into the affairs of Haw Par are still continuing.

The Inspector appointed by me under the Companies Act to investigate these affairs has informed me that he intends to submit an interim report by the end of November. What further evidence he has against those former directors of the company who participated in Spydar Securities Ltd should be known when the report has been submitted to me. I have been given so far only copies of a statement by Mr Slater explaining the circumstances of Spydar's formation, and one or two other documents. However, after five months of investigations, he should have sufficient material upon which to base his interim report which will deal with the affairs of Spydar Securities Ltd and a number of other crucial matters.

Members are aware that there have also been other investigations which have not been initiated by me. They include those by the Stock Exchange of Singapore and by the Commercial Crimes Division of the Police Force. These investigations are time consuming and will not be completed for quite some time.

On steps to ensure the co-operation of authorities in other jurisdictions, I am happy to inform the House that officers of the Attorney-General and the Police Force have received co-operation from the authorities in Hong Kong, where some of the matters have had to be investigated. There has also been consultation between the relevant authorities in London and Singapore, direct as well as through the United Kingdom High Commissioner in Singapore. The Government of Malaysia has also been informed of the circumstances which led to my ordering an investigation into the affairs of Haw Par. I am sure there is now better understanding of the reasons why we had to take steps to preserve the integrity of our financial institutions and to protect the interests of the smaller shareholders.

With regard to the resignation of Mr G. Starforth Hill as an Inspector, he has given his reasons for his resignation in his letter of 27th October, 1975, which has been published. I do not expect Mr Hill's resignation to cause any delay in the investigations.

Honourable Members will be aware of the changes that have taken place recently in the Board of Directors of Haw Par. The five new directors announced that the Board will examine the propriety of all claims against the Company.

Before the resignation of Mr Slater from Slater Walker Securities Ltd, certain offers in relation to the loan of US$29 million to Haw Par were made through two merchant banks. These were not considered satisfactory and were not accepted. There is possibility of a settlement between the new boards of Haw Par and Slater Walker Securities Ltd. So it is better that I say no more on this subject. If there is no settlement, then the wrangles inside and outside the courts will provide everyone with the details of some of the ingenious schemes and complicated transactions that the Slater Walker group carried on in the Far East.

I am not able to say what steps have been taken or will be taken to strengthen the management of Haw Par. This is a matter for the Board of Directors of the Company. I have confidence in the new Chairman and his colleagues on the Board and I have no doubt they will find solutions to management and other problems facing the Company.

Mr Hwang Soo Jin (Jalan Kayu): Sir, I am just wondering whether the Minister will inform the House of the interim report from the Inspector when it is available, or whether it would be made public immediately?

Mr Hon Sui Sen: Sir, when I do receive the report, I will consider it in the light of the information contained in that report. Some of the information may very well be confidential and of a nature relevant to the negotiations with Slater Walker Securities Ltd. In those circumstances it may be possible that the report cannot be made available immediately.