FUND RAISING PROJECTS INVOLVING PUBLIC (Review of laws and control)

The following Question stood in the name of Mr Noris Ong Chin Guan -

Mr Noris Ong Chin Guan: To ask the Minister for Trade and Industry, in view of the recent adverse publicity involving proprietary clubs and the raising of funds through the sale of club memberships, whether his Ministry intends to review the adequacy of current laws and control in respect of similar fund raising projects involving the public.

Mr Goh Chong Chia (Nominated Member): Question No. 2, Sir.

The Senior Parliamentary Secretary to the Minister for Trade and Industry (Mr Tang Guan Seng) (for the Minster for Trade and Industry): Sir, the current dispute over the ownership of the Raffles Town Club (RTC) has drawn public attention to proprietary clubs, like the RTC. Unlike members-only clubs, proprietary clubs are wholly owned by their shareholders. Members of proprietary clubs do not own the clubs' assets; they purchase memberships in the clubs and pay monthly subscriptions, in return for access to the clubs' services. The membership fees and monthly subscriptions are revenue for the clubs, out of which the clubs pay for the facilities and their upkeep, and any surplus belongs to the shareholders of the clubs.

In the case of RTC, some members have alleged that they were misled into believing that only 5,000 exclusive memberships would be offered, when eventually 19,000 memberships were accepted. I understand from media reports that they are considering filing a civil suit against the proprietary owners of the Club on grounds of misrepresentation. Our laws do provide for aggrieved parties to initiate civil action against misrepresentation. Since this may be the subject of court proceedings between private parties, it is inappropriate for me to comment on it at this stage.

As a registered company, RTC is governed by the Companies Act, which sets out the duties of the directors of the club, and specifies that they shall at all times act honestly and use reasonable diligence in the discharge of their duties. The Commercial Affairs Department (CAD) is currently investigating the case to ascertain whether any offence under the Companies Act or any other laws has been committed.

MTI will wait for the outcome of CAD's investigations before deciding whether any preventive action is necessary to regulate similar future fund-raising projects, especially the sale of club memberships to the public.

Dr Teo Ho Pin (Sembawang): Sir, may I ask the Senior Parliamentary Secretary whether the Ministry in the meantime can set up a hotline to answer queries from aggrieved members or complaints from members and to provide more information to the Ministry or to facilitate CAD's investigations?

Mr Tang Guan Seng: The aggrieved parties may report to CAD or, alternatively, I would suggest that the aggrieved parties also report to CASE because CASE can help CAD in its investigation, if necessary.

Dr Teo Ho Pin: Yes, CASE has received quite a number of complaints. That is the reason why we are trying to help by collecting information and passing it to the Ministry. But we need to have a hotline because there are quite a lot of enquiries and there must be officers to answer these enquiries. So can CAD set up a hotline for these members to make their enquiries?

Mr Tang Guan Seng: I will pass it to CAD. Whether CAD wants to set up a hotline, it is for CAD to decide. In Singapore, a telephone line is readily available. You can just pick up the phone and call.