JURONG INTERNATIONAL

Parliament of Singapore · 20 July 2004

Official Report, 20 July 2004, Vol 78, Issue 2 · Open in the reader (summaries, search, filters)

George Yong-Boon Yeo Steve Chia Kiah Hong

Mr Steve Chia Kiah Hong asked the Minister for Trade and Industry (a) what is the rationale for Jurong International to acquire 49% of Synergy Construction from the rest of the shareholders despite the reported accounting irregularities; (b) whether the act by Jurong International is a bailout of the existing shareholders; (c) whether Jurong International has considered asking the 49% shareholders to come up with their share of

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the settlement to repay creditors instead of buying them over; and (d) what is the basis for spending $23 million of public money to bail out the management and directors of Synergy Construction.

BG George Yong-Boon Yeo: Jurong International, through its wholly-owned subsidiary, Jurong Axtra, acquired the rest of 49% of Synergy Construction to ensure that Jurong Axtra had control of the company when putting forward the Scheme of Arrangement. This was necessary as the 49% was indirectly owned by the three founding directors who were responsible for the alleged financial irregularities in the first place. They are also currently under investigation by CAD.

Jurong International and Jurong Axtra have acted responsibly at all times and after exploring all reasonable options, decided on one that would help the creditors achieve the best outcome and help ensure that Synergy can continue as an on-going concern. It is not a bailout of the existing shareholders.

Jurong International did not consider asking the 49% shareholders to come up with their share of settlement, as all efforts were concentrated on finding an expeditious solution for the creditors within a very short period of time. It was necessary to acquire the remaining 49% under the circumstances for purposes of getting control over Synergy, to expedite the Scheme. The three founding directors are also under investigation by CAD for the financial irregularities. The possibility for Synergy to pursue the three directors still remains even though they have sold their shares to Jurong Axtra.

Jurong International has clarified that the $23 million it will put into financing the Scheme is not money from Government budget, but sourced from its own commercial revenue through the growth of its business, local and overseas.

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Source: Singapore Parliament Official Report (Hansard) for 20 July 2004. Republished on SGParliament.