COLLAPSE OF PAN-ELECTRIC INDUSTRIES AND SUSPENSION OF TRADING ON THE STOCK EXCHANGE OF SINGAPORE (Appointment of Commission of Inquiry)

Mr J.B. Jeyaretnam asked the Minister for Finance whether he will recommend to the President to appoint a Commission of Inquiry to enquire fully into all the events leading to the collapse of Pan-Electric Industries and the suspension of trading on the Stock Exchange of Singapore on the 2nd of December 1985.

Dr Hu Tsu Tau: Mr Speaker, Sir, I will first deal with the second part of the question posed by the Member for Anson, namely, the events which led to the suspension of trading in the Stock Exchange of Singapore on 2nd December 1985 and the reasons for the suspension. The answer to this question has been fully dealt with by me in reply to an Oral Question on the same issue submitted by the Member for Radin Mas at the Parliamentary sitting on 10th January 1986. I can supply the Member for Anson with a copy of this reply if he wishes.

As for the collapse of Pan-El, the Government is naturally concerned about it because of its effects on not only the stock market but also the company's shareholders, creditors and employees. It is for this reason that the Government has taken a keen interest in the negotiations between the company's principal shareholders and its creditor banks with a view to resolving the financial problems of the company. It is regrettable that discussions and negotiations had not led to agreement that would resuscitate the company. But, having said that, the Government does not view the Pan-El collapse as being different from other corporate failures. In all these corporate failures, no Commission of Inquiry had been appointed. Neither is one considered necessary for the Pan-El case.

It is generally known that Pan-El had been adversely affected by difficult business conditions in about all of its businesses. Poor business aside, the company's involvement in stock market activities also contributed to its financial problems. The Commercial Affairs Investigation Department has been investigating into the affairs of Pan-El. Charges have been brought against the responsible parties and criminal proceedings are before the Court. It is clearly inappropriate to establish a separate body to conduct another investigation into the matter.

Mr Jeyaretnam: Mr Speaker, Sir, supplementary questions for the Minister. Is the Minister saying that he has in Parliament given all the reasons fully on the events leading to the suspension of trading on the Stock Exchange of Singapore? Secondly, is he saying that the events leading to the collapse of Pan Electric Industries have also been fully explained? I did not think he was saying that. But is he not aware that the public have been told very little about this? Is the Minister not aware of the damage that has been done as a result of the events, the manipulations, and does he not think it necessary that the public investor and shareholders should be told fully of everything and nothing is hidden from them?

Is the Minister also aware that a Commission of Inquiry may be appointed after the criminal proceedings are concluded, if that is what is worrying him? Would he now agree that he would recommend the appointment of a Commission of Inquiry to commence its work after the criminal proceedings have been concluded?

Finally, are there any reasons why the Government is reluctant to appoint a Commission of Inquiry? May we know frankly whether there are any reasons. Is it because the Minister and the Government wish to cover up any failure on the part of the MAS or the Government to forestall and to prevent what happened to Pan El and to the Stock Exchange?

Dr Hu Tsu Tau: Mr Speaker, Sir, I did not say that I had told everything about the Pan El case in Parliament. A lot of the facts involved on the criminal charges will, in fact, come out in court when the proceedings begin so that the public will be aware of what criminal charges are involved.

As to the second question on whether the Government considers it necessary to call an inquiry after the proceedings, the answer is no. Just as we have not in fact convened a Commission of Inquiry into the Abalone case, as it is well-known, or into many other cases of corporate failures.

As to the last question, I would suggest that the Member for Anson should be rather careful of what he says here, because if he has any evidence, he should bring it forth. To imply that the Government has anything to hide, I think, is highly unethical.

Some hon. Members: Hear, hear!