SINGAPORE PRESS HOLDINGS (Rationale for selling excess shares)

Mr Low Thia Khiang asked the Minister for Finance what is the rationale behind his Ministry's order that those who hold more than 3% of the Singapore Press Holdings shares have to sell their excess shares equally to the stock market, Temasek Holdings and MND Holdings.

Dr Richard Hu Tsu Tau: Under the Newspaper and Printing Presses Act, no person can hold more than 3% of the ordinary shares in a newspaper company unless it is exempted from this requirement. This 3% rule was introduced in 1977. Until the present order was announced, several companies, principally the OCBC Group and Great Eastern Life, held more than 3% of the ordinary shares of Singapore Press Holdings (SPH). They have hitherto been exempted from this rule.

In September 1993, we announced that the 3% rule will be applied to all ordinary shareholders of SPH. Those who hold in excess of 3% are required to divest their excess shares equally to the stock market and Temasek Holdings or MND Holdings over two years. Temasek Holdings and MND Holdings will initially hold these shares placed with them as investments. Later, when these shares are split into small board lot sizes, which are affordable, they will be offered to Singapore citizens, who can use their CPF funds to purchase them.

The rationale behind the whole exercise is therefore to allow more Singaporeans to own shares in a company with a strong track record. This is in keeping with the objective announced by the Prime Minister in his 1993 National Day Rally Speech to help Singaporeans enlarge their ownership of assets, including shares.

Mr Low Thia Khiang (Hougang): Would the Minister say what is the time frame for MND Holdings and Temasek Holdings to sell the shares to Singaporeans?

Dr Richard Hu Tsu Tau: We have not decided on this. The companies would be allowed to sell the shares over a two-year period. So it is unlikely we will start selling SPH shares well before the end of this period because we are not certain how much will be collected. So the simple answer is that we have not decided on it.

Mr Low Thia Khiang: Would the Minister say what percentage of SPH shares the Government-owned companies until now, as a whole, will be allowed to hold?

Dr Richard Hu Tsu Tau: No one is allowed to hold more than 3%.

Mr Low Thia Khiang: Including the Government-owned companies?

Dr Richard Hu Tsu Tau: Yes, any company, unless they are specifically exempted. But the exemptions are being withdrawn now. The only holders who will be exempted would be Temasek Holdings and MND Holdings, which are Government holding companies. Even Government-linked companies (GLCs), for example, Keppel, will not be allowed to hold more than 3%.

Mr Low Thia Khiang: So MND Holdings and Temasek Holdings will be exempted from this 3% rule.

Dr Richard Hu Tsu Tau: MND Holdings and Temasek Holdings are 100% Government holding companies. Therefore, this restriction does not apply.

Mr Low Thia Khiang: Sir, since MND Holdings and Temasek Holdings, which are wholly Government-owned companies, are exempted from this 3% rule, and a high percentage of this shareholding of SPH would be owned by Government-owned companies, would this undermine public confidence on the neutrality of the newspapers under SPH?

Dr Richard Hu Tsu Tau: As I mentioned earlier, they are being held by Temasek Holdings temporarily as an investment. There will be no interference with the operations of the companies. Eventually, all these will be divested back to them. It is a question of timing. There is no intention to re-acquire the shares to re-exert control.

Mr Low Thia Khiang: Would the Minister confirm that the Government-owned companies will not be holding more than 3% of the shares as stipulated by the rule?

Dr Richard Hu Tsu Tau: Yes, I have said that.

Mr Low Thia Khiang: As a whole or individual companies?

Dr Richard Hu Tsu Tau: Individual companies.