NEWSPAPER AND PRINTING PRESSES (AMENDMENT) BILL

Order for Second Reading read.

The Acting Minister for Information, Communications and the Arts (Mr David T. E. Lim): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

Sir, the local media play an important nation-building role in our multi-racial and multi-religious society. They need to have a deep appreciation for local sensibilities and sensitivities, and a clear sense of responsibility and commitment to Singapore. This is why we have rules on shareholding limits to ensure that no one can manipulate our local media to undermine our society. However, since the shareholding controls in the Newspaper and Printing Presses Act (NPPA) were first introduced in 1977, there have been many changes in the investment, financing and corporate environment. Investment options, like trust funds, futures and stock options, are now common. New corporate structures involving holding, subsidiary and sister companies have also sprung up. Such changes can have an impact on the ownership and control of newspaper companies.

The existing legislation does not cater adequately for these changes. It is therefore possible for some entities to exploit these grey areas to circumvent the shareholding provisions and other controls in the Act, thereby exercising undue influence over our media companies. This Bill, therefore, proposes amendments to the Newspaper and Printing Presses Act to update the shareholding controls in the Act. We are also taking this opportunity to update the penalty scheme in the NPPA and to make other revisions to the Act.

I will now speak on these issues in turn.

In September 1999, Capital Group Companies Incorporated (or "Capital" in short), an international fund manager, acquired more than 5% of ordinary shares in Singapore Press Holdings (SPH). Technically, Capital did not breach the 3% shareholding limit in the NPPA. This was because, as currently worded, the NPPA only applies to beneficial owners, and not nominee shareholders like Capital. However, certain nominee shareholders can vote on behalf of their clients and, therefore, can exert influence over a company. But the policy intent of the ownership limit in the NPPA is to ensure that no single person or company can exercise undue control over a newspaper company. The shareholding limits should, therefore, also apply to fund managers who have the discretion to exercise voting rights of shares on behalf of the beneficial owners.

To ensure that this policy intent is carried out, the Government stated in October 1999 that we would amend the NPPA ownership provisions to adopt the same definition as the ownership provisions in the Banking Act (BA), but retain the 3% figure. This is because the ownership provisions in the BA are more comprehensive, as they are based on the concept of interest in voting shares. This covers any person, other than a bare trustee, who has an interest in a share, such as fund managers like Capital. As the Singapore Broadcasting Authority Act contains ownership provisions that mirror those in the NPPA, corresponding changes would be made to the SBA Act.

In preparing the Bill, we noted that as the new definition of "shareholding interest" covers more parties, retaining the original 3% figure may be too restrictive. Such a low limit could affect the fair value of the shares of a listed media company in the stock market by limiting buyers from acquiring a more substantial stake for their portfolios. Taking into account feedback from the investment community and industry players that we consulted, we decided to raise the shareholding threshold figure from 3% to 5%. This 5% figure will address our concerns about undue influence over a media company, while still providing leeway for investors to take a larger stake in a listed media company.

Let me now highlight the new provisions on shareholding controls. Clause 3 of the Bill repeals section 10 and inserts new sections 10A to 10H. The current 3% shareholding limit is aligned to the definition of "substantial shareholding" in the Companies Act and the Banking Act, which refer to a 5% interest in voting shares. A new shareholding threshold at 12%, which mirrors that in the BA, has also been introduced. It addresses aggregated shareholdings of a person and his associates, where "associates" includes close relatives. This will address the loophole in the current Act, which does not take into account relationships between shareholders.

The new sections will also address passive increases in shareholdings, and shareholders acting in concert. Legislative powers will be introduced for the Minister to direct the transfer and disposal of, and attach conditions to, excess shareholdings and impose penalties for breach of shareholding limits. The maximum penalties for contravening the shareholding provisions are, upon conviction, a fine not exceeding $50,000 or imprisonment for a term not exceeding three years or both. As a deterrent to recalcitrant offenders, a further fine not exceeding $5,000 will be imposed for every day that the offence continues after conviction.

Sir, let me now turn to the update of the penalty system in the NPPA. Currently, the substantive penalties for publishers consist of revoking their licences or charging them in court. These penalties are too severe for lesser offences, for example, when publications carry pictures that go beyond acceptable norms. To provide an appropriate penalty for lesser offences, clause 12 inserts new section 33A to empower the Minister to impose composition fines instead, which are out-of-court settlements for offences chargeable in court. For consistency across the NPPA and other legislation, the Bill also introduces amendments to update the scale of fines in the NPPA, as there has not been an across-the-board review of the penalties since the Act was enacted in 1975. The maximum fine under the NPPA will generally be raised from $10,000 to $50,000.

Sir, let me now touch on the other amendments to the Act. Currently, the receipt of funds from a foreign source for purposes other than commercial purposes is prohibited, so that no person can subvert our media. However, in today's networked global economy, it is not uncommon or difficult for foreign parties to register a company in Singapore or work through a local agent. Clause 4 of the Bill, therefore, amends section 11 to broaden the current definition of a "foreign source" to include foreign funds channelled through a local agent. The Minister can also declare any local incorporated company or association as a foreign source if it has any foreign directors or members.

Finally, clause 13 of the Bill updates the exemption clause in section 34 to be consistent with other legislation.

Sir, I beg to move.

Question proposed. 6.00 pm

Mr Andy Gan Lai Chiang: Sir, the print media constitutes an integral part of our daily lives. I need not dwell on the importance and the critical role the print media plays in helping to shape Singapore. We hold in respect the power of the pen held in the hands of our editors, journalists and columnists. Therefore, our control over ownership is important in providing the direction as required by society.

The print media has a role to play in the promotion of community values and the arts. We have always spoken of a gracious living society. Enhancement in arts appreciation and community outreach efforts require constant nurturing. The print media is able to fulfil this role well. The print media can be a strong link in a chain of efforts to nurture the arts and promote community outreach programmes. They can provide more coverage on the arts and community. They can give insights, invoke passions, enhance appreciation, and thus push the arts and the community to greater heights.

An arts and community supplement, like the Computer Times supplement distributed with the Straits Times, will be a welcome gesture of the print media. Let us pay tribute to the talents and fashion of our arts community and the tens of thousands of volunteers in community service. Let us give them a pat on their backs. Let us help them spread their passion and volunteerism to the thousands who have been moved by the power of the pen to follow in their footsteps.

Sir, I support the amendments.

Mr Low Thia Khiang: Mr Speaker, Sir, the Newspaper and Printing Presses (Amendment) Bill, together with the SBA (Amendment) Bill, is clear evidence of Government's control over the media. Control comes by way of empowering the Minister to decide who should be allowed to own a substantial number of shares. New section 10A of the Bill prohibits any person to become a substantial shareholder without approval of the Minister. It also prohibits shareholders to act together with other shareholders to exercise their voting rights if together they hold more than 5% of the voting shares.

Section 10B further prohibits an indirect controller, by way of having 12% of the shares, or voting power of the company with its associates unless, again, the Minister approves.

Sir, it is interesting that in this section, it defines in detail what relationship is considered associate. I think we could also use the same principle to examine, in the future, whether there is a conflict of interest in holding positions in public offices, in private companies and GLCs. The control by the Minister would also now empower him to compel shareholders to dispose of their shares. New section 10E empowers the Minister to do so if, for example, he finds that the shareholder is:

(a) not a fit and proper person; and

(b) he is a person whose likely influence is to lead the newspaper or broadcasting company to no longer conduct its business prudently.

I wonder what does this Bill mean by "a person who is not fit and proper" to hold such shares. Does it mean only persons who are associated with the PAP are considered as fit and proper? I also wonder what is meant by "no longer conduct its business prudently?" What does this refer to? Does it refer to financial prudence or political prudence, or prudence in reports on the Opposition?

Sir, do we believe in an open society, market economy and a free exchange of ideas? Or do we believe in control? On the one hand, the PAP Government talks about market economy but requires shareholders, newspaper and broadcasting companies to be subject to approval to own shares. In one breath, the PAP Government talks about openness and transparency. In the same breath, the PAP is empowering Ministers with the wide discretion to control the media by controlling who can own shares and have voting rights in the companies. This effectively ensures that the management of a media company is firmly in the hands of the Government. It echoes what the Government says and toes the Government's line. This, I believe, Sir, would be the underlying cornerstones of remaking Singapore.

Mr Chandra Mohan Nair: Mr Speaker, Sir, this Act was enacted in 1974 for the licensing of newspaper companies. Newspaper companies are private in nature and not state-owned. There should, therefore, be liberal market forces at play, with regard to ownership of shareholdings in these companies. Take precedents like in USA, England, India and Australia, I wonder if there are similar provisions restricting the shareholdings of shareholders and directors.

We are, Mr Speaker, Sir, a democratic nation and there must be freedom of the press and ownership of the press. The Government is here to govern and should be less involved with newspaper companies and about shareholders of such companies, just like other private and public companies, where the Government should be least involved. There should be, preferably, a hands-off approach as the years go by. And let there be more liberal ways so that we have a more vibrant and dynamic newspaper and printing presses industry in the days ahead. If there is abuse or danger posed to the security or well-being of our nation, there are enough laws in Singapore to deal with such potential offenders. Having read the provisions, Mr Speaker, Sir, the provision under clause 12, relating to the compounding of offences, is most welcome, and the Hon. Minister will have the discretion to allow compounding of relevant cases and that will avoid the necessity for prosecution in a court of law.

Related to the newspaper industry, Mr Speaker, Sir, may I be permitted also to say that since Independence in 1965, we, in Singapore, I understand, cannot purchase Malaysian newspapers in Singapore. Similarly, Malaysians cannot purchase Singapore newspapers in Malaysia. We in Singapore and Malaysians in Malaysia, have free access to the Internet, foreign newspapers and magazines from all over the world, but not from each other's countries. Information is available and accessible very easily. Then why this restriction between Singapore and Malaysia on the availability of our respective newspapers? There may be political reasons in the 1960s, and perhaps 1970s and 1980s. It shows how suspicious our politicians and Malaysian politicians were and still are, but our citizens may look at things differently. I for one do. We need a set of new thinking amongst our political leaders and Malaysian political leaders. It is about time political leaders from both countries revisited these rules with a genuine interest in building more trustworthy and practical approaches to dissemination of information and political and social issues between our two nations.

The political leadership must venture to close the gap and create the right ambience and environment to learn from each other, to respect each other and create positive rapport between the citizens of Singapore and Malaysia. And once the citizens of both countries read each other's newspapers, both sides would appreciate each other's political arguments and rationale for political, economic and social decisions made by our respective leadership. Let us all be more enlightened and progress on with accurate facts, critical arguments and various arguments, and let the citizens and people of both countries decide for themselves and respond genuinely and more positively based on ideas and thoughts, and not manouverings.

As a side note relating to the newspapers' ability to educate their readers, may I also encourage our newspapers to cite in their articles or stories, all the relevant websites and articles and Government materials and their websites being relied on by journalists, politicians and civil servants so that the reader would be aware where the sources came from. So, at the end of each article, there must be, almost compulsorily, websites and articles that were relied on, so that the discerning reader would move on to read those articles, and we would find better debates, not just in Parliament but in Singapore as a whole. Our citizens are more intelligent, I would say, and more discerning these days, and let them decide, after analysing the facts and issues as they perceive it.

Mr David Lim: Mr Speaker, Sir, I thank the speakers who have spoken in support of the Bill. A number of issues have been raised, some of them not directly related to the amendments, but let me take them in any case.

Mr Andy Gan has asked that the media encourage the arts by giving it greater coverage. I leave this to the media to follow up on this suggestion. I also hope that they will give more coverage to the arts, since I wear the other hat of being the Minister in charge of the arts in Singapore. But to be fair, I think the coverage of arts has increased over the years, and some of the newspapers are publishing supplements from time to time. Some of them do have enhanced coverage of arts events in Singapore.

Mr Chandra Mohan has raised a number of issues and also some suggestions for newspaper companies to cite websites when they write their articles. Again, I leave this to the newspaper companies to take up his suggestion. The power of web technology really is in the connectivity, and I think there are already many of the hyperlinks provided on the news sites that one can visit today.

The substantial issues raised about this particular Bill concern control over the media. Mr Chandra Mohan asked whether other countries have also limits on ownership. Indeed, they do. As I know, foreign ownership of newspapers is capped at 20% in the United States. Likewise, in Canada, it is capped at 25%. In France, foreign ownership is not allowed. And I believe there are also ownership restrictions in Australia and UK, although in Australia these are being reviewed at this point in time. So we are not alone in setting ownership restrictions for foreign owners. The reason for this is that it is important that we do not have undue foreign influence in our local media. The controls are put in place so that Singaporeans can decide for themselves what kind of a life they want to have in Singapore, and we can decide for ourselves how our society will develop and grow. The controls are not put in place to silence anyone, nor are they put in place for the Government to tell the media what they can or cannot write. The Government does not tell editors what they should write in their editorials. Journalists can write op-ed pieces and, from time to time, they do write op-ed pieces that are critical of Government policies. They report on the news, sometimes to the chagrin of Ministers or Backbenchers, as they do not quite get the message they want reported. So there is no attempt here to determine how the media should report the news. But our objective is to ensure that we have a credible, a strong and a responsible media. And for this reason, we have put in controls.

The control that Mr Low Thia Khiang referred to, as to who can own shares, and why this is up to the Minister to decide, refers only to substantial shareholdings. And there is a big difference here. Mr Low Thia Khiang, Mr Speaker, or any other Member in this House, or any other person in Singapore or elsewhere can buy shares in newspaper companies without any restriction and without any permission from the Minister. But when his aggregate of shares exceeds 5%, then he requires the permission of the Minister. This is to ensure that no one person, company or entity holds a large amount of shares and is therefore able to exercise undue influence over the operations of that newspaper company.

Sir, I believe, I have dealt with the issues that Members have raised.

Mr Low Thia Khiang: Sir, is the Minister saying that this Bill only restricts foreign ownership, as he just now cited examples of other countries? I think he has not responded to me on what is meant by "fit and proper person" and "prudent" in the running of a company.

Mr David Lim: Mr Speaker, can I ask Mr Low Thia Khiang exactly which clause he is referring to?

If he is referring to new section 10E, there it says that the Minister may serve a written notice of objection on any person referred to in section 10A or 10B if the Minister is satisfied that the person ceases to be a fit and proper person. Is that the clause he was referring to? I am not quite sure of the question, Mr Speaker. I think a person who is "fit and proper" has a proper definition under the Act.

Mr Low Thia Khiang: Sir, I am referring to new section 10F which says that if "any person has contravened section 10A, 10B or 10C, ." that he would be directed to dispose of his shares. And it says on many occasions that the person should be a fit and proper person.

Mr David Lim: Sir, the intent of clause 10F is to ensure that if a person exceeds the provisions of clause 10A and 10B, that is if they exceed the 5%, and the 12%, then the Minister should direct that they dispose of those shares.

Mr Low Thia Khiang: What do you mean by "fit and proper person"?

Mr David Lim: Let me read new section 10F for the Member's benefit. It says:

"Without prejudice to section 10G, if the Minister is satisfied that any person has contravened section 10A, 10B, [these two sections are the sections that refer to the 5% control and the 12% control] 10C(4) or 10E(5) or any condition imposed under section 10C(2), [which are basically elaborations of those sections earlier] or if the Minister has served a written notice of objection under section 10E, the Minister, may by notice in writing -

(a) direct the transfer or disposal of all or any of the shares in the newspaper company held by the person or any of his associates.. within such time and subject to such conditions as the Minister considers appropriate;"

Sir, I think what Mr Low Thia Khiang is perhaps alluding to is whether "fit and proper person" refers to a particular political affiliation. I give him the assurance that it does not.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. - [Mr David T. E. Lim].

Bill considered in Committee, reported without amendment; read a Third time and passed.