Rental of 26 Ridout Road

2.17 pm

The Minister for Law (Mr K Shanmugam): Mr Deputy Speaker. There have been many questions asked about the Ridout tenancies.

I welcome the scrutiny, the questions, because financial integrity and probity are critical for Singapore and for anyone standing up here. Without that, we will be finished as a country. And even though I had not factored in a Corrupt Practices Investigation Bureau (CPIB) interview as part of my job description, together with the caution, I believe it to be important.

As a member of the Government, I think it is important that I am held accountable to Singaporeans and to subject myself and this matter to scrutiny. That is how our system works and must continue to work. No one is above the law.

CPIB has investigated on whether I have had any unfair benefit. The CPIB investigations have made clear that there was no preferential treatment or abuse of position, the rules were followed, proper market rental was paid and Senior Minister Teo's report also makes clear there was no conflict of interest. That is a key point and I will come back to that.

I will now answer some questions people have raised with me. Some of these questions relate to the choices I made and which are very private. Many will appreciate that the choice of a person's home is typically a personal and private matter. But I am mindful that as an elected official whose authority is conferred on me by the trust of Singaporeans, the lines between what is personal and public may not always be clear. So, I will speak of them.

The questions I will deal with are: one, why am I living in a rented place in the first place and why am I not living in my own house; two, am I making some money renting out my own property while I live in a house rented from the state; three, the size of the land surrounding the Ridout house; four, what the Ridout house is like; and five, was there a conflict of interest?

First, why am I renting? I am renting because I decided to put my family home, where I was living before June 2018, up for sale. In 2016, I was approaching my 60s, age-wise. I reviewed my finances and realised that too much of my savings were tied up in my family home. I had bought the house using my previous income as a lawyer before I became a Minister.

When I bought my family home, I had assumed a future stream of income, based on what I was earning in the private sector. After I became a Minister, my income changed and thus I found too much of my savings was tied up in one house. I was advised that it would be wiser not to have most of one's savings in one asset. So, I decided to put my family home for sale.

Before I proceed further, let me make it clear. I did not consider selling my own home because of financial need. That was not the case. And I also do not regret having foregone my previous earnings as a Senior Counsel. It is a privilege to be in public service and if I am asked, I will make the same choice again.

So, to prepare for the sale, I decided to move out from my family home and live in a rental property. I looked at several rental properties, including black and white houses. I have long liked black and white houses. And eventually, in 2018, I decided to make an offer for 26 Ridout Road.

I did not know the guide rent. I told my agent to assess how much I should offer based on surrounding properties. My agent advised me that $25,000 a month would be a fair offer, based on rentals for similar properties at that time and taking into account the built-up area and the condition of the property. So, we offered $25,000. I told my agent I should not be paying less than what my neighbours paid, but I am not sure exactly when I told him that.

The Singapore Land Authority (SLA) came back with a counter-offer of $26,500, which we accepted without further negotiations. I had no idea, when I accepted SLA's counter-offer, what the guide rent or the minimum rent was. These were decisions internal to SLA that I was not privy to.

Around the same time, I also rented out my family home while deciding on the sale. It took me a while to decide to sell, and then COVID-19 intervened. My family home was put on the market in November 2021.

I will move to the second question now. It has been asked, am I renting out my family home and in turn living at 26 Ridout Road so that I can make some money from the rental difference? The first point – I am paying market rent for 26 Ridout Road and that is the critical point.

But I will add, in fact, the answer is no, I am not making any money from the difference in rentals. I pay for the rental of 26 Ridout Road mostly from renting out my family home, but taking into account one, property tax because the family home is now non-owner occupied and two, income tax on the rental proceeds, there is a net deficit. I top up the deficit.

I am, in essence, using my previous lawyer's income to pay for the rental for 26 Ridout Road. Based on my current income, I would not have offered to rent 26 Ridout Road. That is based on my personal approach to finances. I should add, my family home, I think some people know, is a Good Class Bungalow (GCB). So, I moved from there for the reasons that I have explained.

Next, some have asked about the size of the land area. I think the facts have been explained. I did not want the extra land, about 150,000 square feet, which is now part of the lease. Indeed, I offered to maintain that land outside of the house boundary at my own cost, because if the outside land was not properly maintained, there would be serious problems for me.

But I did not want it as part of the lease. My reason – if you own a landed property, you want a large land area. You benefit from the capital appreciation. But if you are a tenant, any land under your lease becomes your own responsibility and thus, an additional land area of 150,000 square feet means additional legal responsibility. For example, there are large trees in the property. If any of them fell, it could be serious.

And that is not theoretical. In 2017, a tree fell on someone in the Botanic Gardens. A person died, even though the tree had just been inspected and assessed to be healthy the year before. Another issue – mosquitoes. The larger your land, the greater the responsibility for potential health risks, including mosquitoes. I did not need the land and did not want it.

In fact, to explain my thinking, I will read out parts of an email which I sent to my agent and I put out a draft for him to send to SLA. It reads, "We have also been discussing the surrounding state land. Our client is concerned about the thick vegetation in the shaded area and the disamenities from that land, mosquitoes and very real likelihood of snakes. There will be other animals but that might be a lesser concern. Currently, SLA maintains this area. Our client would like to propose that the undergrowth in the parts shaded yellow be cleared, leaving only matured trees. Our client will then be happy to maintain this area at his own cost. This will give him some comfort on the health and safety issues while it will save SLA the cost of maintenance of the land. Our client proposes that this arrangement be subject to termination with some notice, if either party finds it not feasible for any reason."

The email was not sent in the end, because the contents were communicated at a meeting. But SLA took the position that if I wanted to maintain the surrounding land, the surrounding land had to be part of the lease. I did not want to negotiate and agreed to this.

Even now, if SLA agrees to take back the extra land, which is more than 60% of the total, I would be extremely happy to give it up. And I would be happy to maintain it, if SLA agrees because that was what I wanted to do in the first place – pay for the maintenance, but not include the extra land and continue paying the rent we had agreed to until the end of the current contract.

Next question. There has been some speculation about the interiors at 26 Ridout Road.

After this session, I will share with Members and the public, some photos of the house before I moved in. These photos were taken by my agent to point out some problem areas to SLA before the tenancy. I will also include current photos of the same places in the house for comparison. Minister Edwin Tong has explained the works that SLA normally does and did. The photos have explanatory notes on the works done by SLA and the works done by me. They are indicative to give a sense of the state of the house and some of the works that were done. There are very few photos. They are not comprehensive. We do not have a full set of photos on the original condition of the house.

Like other black and white bungalows, 26 Ridout Road required a fair amount of work. It is an old property and it had been unoccupied for more than four years. There certainly were no chandeliers. I did work on the house to the extent that was allowed. It is a conservation property, so there are limits on what you can do.

In all, we spent more than $400,000. Actually, on my count, more than $500,000 on improvements, including paying for the car porch and planting many trees. The money that I put in, I knew that I would not benefit from it after my lease is over. It would all go back to the state. That is the deal when one rents a black and white, and I knew that.

Finally, there is the important question of conflict of interest. The CPIB investigation and review have made clear that there was no conflict of interest, no breach of rules and everyone acted properly and honestly. Yes, SLA is a Ministry of Law (MinLaw) Statutory Board but I took myself completely out of this matter.

Conflict of interest means I make a decision in a matter where I have an interest. I have an interest in the tenancy, obviously. But I made no decision for SLA on the matter, either SLA or MinLaw. And I took steps to deal with any perceived or potential conflict of interest.

On my part, I told my agent everything had to be done strictly in accordance with the rules. I spoke with the then-Senior Minister of State at MinLaw, Ms Indranee Rajah, and the then-Deputy Secretary at MinLaw. I told them that I was looking at black and white bungalows. I asked then-Senior Minister of State Indranee whether, if any issue comes up to the Ministry, could she handle it. She agreed. I also said that if she needed to check anything, she could go to Senior Minister Teo Chee Hean and that I will tell Senior Minister Teo this. The then-Senior Minister of State Indranee told me that she would check with Senior Minister Teo if she needed to. And I told the then-Deputy Secretary at MinLaw that I am recusing myself in this matter; then-Senior Minister of State Indranee will deal with the issues, if they arise and, if she needed to, she will check with Senior Minister Teo.

And I told Senior Minister Teo that I was looking at possibly renting a Black and White bungalow and that if any issue comes up, SLA/MinLaw will check with then-Senior Minister of State Indranee and, if she needed to, she will check with Senior Minister Teo. And he agreed.

I did that because Senior Minister Teo is senior to me. In this way, there would be a chain of command, which did not involve me, for SLA to check with then-Senior Minister of State Indranee and Senior Minister Teo, if there were issues on which SLA wanted guidance.

And I also told my agent that, on this matter, I had spoken with then-Senior Minister of State Indranee and Senior Minister Teo, and if any issue arose, SLA will go to them to check. And I believe my agent so informed the SLA officers dealing with the lease.

I took these steps although rental issues do not come up to Ministers in the usual course. Nor in this case, as it transpired, did anything go up to MinLaw, then-Senior Minister of State Indranee or Senior Minister Teo for guidance or decision.

So, no actual conflict. I had removed myself completely from the decision-making process. And no potential or perceived conflict either, because I had recused myself.

There is some confusion on this. Some people think that there is potential or perceived conflict. Actually, actual, potential or perceived conflict can only arise where I have an interest in the matter, I make a decision on the matter, then that will be actual conflict.

If I have an interest and I remain able to make a decision even though I do not actually make any decision, there can be potential or perceived conflict of interest.

But once I recuse myself, I cannot make a decision, nor am I potentially able to make a decision. Members heard Senior Minister Teo earlier.

In conclusion, I would like to say that I am sorry that Parliament's time has been taken up to address these issues which arose out of a personal decision I made to rent a home. I know that there are many important things that we have to deal with as a nation. I am, like my colleagues, fully committed to working with Singaporeans to address the issues that matter to them.

I will answer any question you have because it is important that we do the right thing and to hold ourselves up to high standards of integrity. I did not enter public service to maximise my earnings, or try and pay less than I should, to the state.

Mr Deputy Speaker: For clarifications, Mr Sitoh Yih Pin.

2.34 pm

Mr Sitoh Yih Pin (Potong Pasir): Thank you, Sir. I thank the four Ministers for their Statements. I have two points to raise. Senior Minister Teo was consulted by Minister Shanmugam to step in to make decisions should the then-Senior Minister of State Indranee need to escalate any matter. We know that Senior Minister Teo was not called upon to make any decision at that time. But given the above, I would like to ask whether it is appropriate for Senior Minister Teo to oversee an independent review of the matter.

The second point I would like to raise is this. The CPIB report states that Minister Shanmugam asked the then-Deputy Secretary of MinLaw for a list of properties available for the public to rent. CPIB subsequently found that there was no disclosure of privileged information and no preferential treatment given to the Ministers and their spouses. I would also like to ask if it was appropriate for Minister Shanmugam to ask for this list.

The Senior Minister and Coordinating Minister for National Security (Mr Teo Chee Hean): Thank you, Mr Deputy Speaker. Both are very pertinent questions. First, with regard to myself. There is no conflict of interest for me to conduct the review. I am not involved in the rental transactions of both these properties. I am not a party to the transactions, nor a participant, nor have I taken any actions or decisions regarding the rental of these two properties. So, I am not an involved party, I am not a subject of the CPIB investigation, nor indeed, a subject of this Review either.

Sir, I think it is important to know that the Prime Minister has directed the CPIB to investigate and determine if there was any corruption or criminal wrongdoing in the two rental transactions of the Ridout Road state properties by the two Ministers. The investigations by the CPIB are independent, thorough and authoritative. In my review, I have relied extensively on the CPIB's independent, thorough and authoritative report. So, Sir, I have no difficulty conducting this Review as an independent reviewer.

On the subject of the Minister for Law having asked the Deputy Secretary for MinLaw. Sir, this point, actually, was noted by the CPIB in its investigation and was reported in the CPIB's findings. So, in fact, this point was looked into by CPIB. Minister Shanmugam asked the Deputy Secretary for MinLaw for a list of properties that were available to the public for rent, and this was stated in the CPIB's report. The CPIB looked into the matter and found no evidence to suggest any abuse of position for personal gain. The CPIB also concluded that there was no disclosure of privileged information in the process of the rental transaction. The AGC reviewed CPIB's investigation papers, concurred with CPIB's findings and recommendations and directed that no further action be taken as the facts did not disclose any offence.

Sir, which state properties are available for rent is public information. I have explained that. Minister Edwin Tong has explained that. They are available via SLA's managing agents responsible for marketing the properties on SLA's State Property Information Online (SPIO) system, prominently displayed with "For Lease" signs on the premises and available if a credible, potential tenant asks SLA or the managing agents.

Sir, it is in SLA's and MA's interest for the properties available for lease to be made known to credible, prospective tenants. SLA and MAs want to rent out these properties. So, they want people to know about them. Hence, if a credible, prospective tenant were to ask SLA or the managing agents which properties, for example, with certain characteristics that a credible, potential tenant has in mind, are available for lease, the SLA or the MAs will provide the appropriate information, including on properties not listed on SPIO, but available for rent. This is not privileged information. The SLA or MAs have received inquiries from ambassadors, company executives or professionals to rent state properties, and SLA provides the information to companies too.

Let me give Members an example. In June 2019, SLA provided a list of several state properties to a company which was looking to rent several properties for its employees for its operations in Singapore. It is, in fact, a 22-page slide deck, listing more than 10 properties of various types. The listing includes the locations and characteristics of the properties so as to help the interested organisation or person to decide which property to rent. And site visits could be arranged or would have been arranged. So, Sir, this is not unusual and it is not privileged information.

Mr Deputy Speaker: Mr Pritam Singh. Minister Shanmugam.

Mr K Shanmugam: If I may add on to that, Mr Deputy Speaker, Sir, because the question is: why did I ask the Deputy Secretary? I think I should clarify precisely why. I could have approached SLA directly. They would have given the list. I know that they would give this information to credible, potential tenants. We call them prospects. You are a landlord, you have properties you want to rent, it is in your interest to give the information if you believe that the person is someone who is able to rent what you have. You will make available the information. So, I could have asked SLA directly, and I know that SLA has given this information to others who will fall within the category of credible, prospective tenants: embassies and so on, companies, business persons. And I think from SLA's perspective, I would be a credible, prospective tenant who is not going to run off without paying the rental.

But I asked the Deputy Secretary, a senior Administrative Service officer, so that MinLaw knew and there was total transparency, instead of asking SLA directly. He would usually let the Permanent Secretary know. And as senior Administrative Service officers, he and the Permanent Secretary will be able to go beyond me and report to the Head of Civil Service or the Prime Minister if they felt that anything needed to be brought up to that level – either the Deputy Secretary or the Permanent Secretary. And that is how our system works. So, I believed it was better to ask him rather than ask SLA directly.

Sir, the purpose of asking the Deputy Secretary is important. Some of the comments that have been made so far, I think, are made based on not realising that SLA will give these lists and has given these lists to others. They are not privileged or secret information. If they are secret, SLA cannot rent out these properties. Once that is understood, then the question is: should I have asked SLA directly or through the Deputy Secretary? And I have explained the reasons why I went through the Deputy Secretary. Thank you, Mr Deputy Speaker.

Mr Deputy Speaker: Mr Pritam Singh.

Mr Pritam Singh (Aljunied): Thank you, Mr Deputy Speaker. Sir, the issues that have been covered by the four Ministers, I think for many Singaporeans, cover multiple matters of concern ranging from propriety to policy to political optics. While CPIB did not disclose corruption or criminal wrongdoing, the two themes I will cover in my questions cover good governance and land management and reserves.

My first question pursues the second question raised by Mr Sitoh Yih Pin – and that is with regard to good governance and Minister Shanmugam's decision to ask his Deputy Secretary, a very senior civil servant, for a list of properties for his personal occupation. The fact is significant because, unlike Minister Vivian's property, which was marketed through the SPIO portal amongst others, the information given to Minister Shanmugam for his personal use by the Deputy Secretary would appear to have been privileged. At minimum, the man on the street would not have equal access to this information and would have had to secure it at some cost.

So, I would invite the Senior Minister to consider whether it would have been more appropriate for the Minister in question to have engaged an agent to inquire about properties that were available for rental.

How does the Senior Minister's report reconcile this with the Ministerial Code of Conduct and the Prime Minister's Rules of Prudence for the People's Action Party (PAP) Members of Parliament, which requires that all Ministers should scrupulously, keep their official and private affairs separate?

Should Singaporeans conclude that such actions by Ministers as instructing civil servants on personal matters and using official information for personal use is appropriate, above board and has been going on for a long time in the Public Service?

My second bucket of questions pertains to reserves and land management and I direct this at the Second Minister for Law. Senior Minister Teo's report is silent on why Minister Shanmugam did not have the confidence of the SLA, a Statutory Board that comes under his Ministry's purview and the Second Minister's purview, in maintaining the adjacent land next to 26 Ridout Road in spite of SLA being prepared to pay up to $25,000 a year for its upkeep. Can the Senior Minister explain if he probed into the substance of Minister Shanmugam's lack of confidence in a Public Service body under his charge?

Sir, we have been told in this House no less that land is a very scarce commodity in Singapore and it must be priced according to its market value. With SLA choosing to focus almost singularly on gross floor area and not total land area in its guide rent of black and white bungalows, including those in the most expensive and prime housing estates comprising Good Class Bungalows, does this not represent a policy loophole that effectively is a special dispensation at the taxpayers' expense, for individuals who can afford to rent black and white bungalows?

The PAP routinely shuts down any proposal from the opposition or the public that draws down or is perceived to draw down revenue from state land as "a raid on the reserves".

SLA increased the size of 26 Ridout Road with prime land by almost three times with no real impact on the cost of renting the property except for the usual maintenance. Does this episode not highlight a need to close this policy loophole and put a value on vacant land which the Inland Revenue Authority of Singapore (IRAS), anyway, would tax a Singaporean for?

To this end, can I ask the Second Minister for Law also to confirm of the 600 black and white colonial bungalows in Singapore, how many have the total land area larger than 26 Ridout Road today? And how many lessees have SLA negotiated with to enlarge their compounds as much as was enlarged for 26 Ridout Road?

These are my questions for now, Deputy Speaker.

Mr Teo Chee Hean: Minister Edwin Tong has explained why, in the context of renting these properties, the gross floor area is of more significant importance than the total land area. I think, Mr Pritam Singh, you have heard the explanation and I am sure Mr Edwin Tong would be happy to repeat that.

The reason is because when you buy a property, you want the land and the land belongs to you for the entire duration, whether it is a 999-year lease or freehold or whatever it is or 99 years, and you can develop the property. It is worth something to you.

When you rent the property for a short period of time, whether it is two years, three years, nine years, you cannot develop the property and you have to maintain it. I think Mr Edwin Tong and Minister Shanmugam himself have explained it.

In the valuation of the property by the valuers of SLA, they take this into account when assigning that valuation.

I should point out, as I said just now, that the SLA valuer did not know the rental amount which the leasing division had negotiated with the tenant, nor identity of the prospective tenant. The valuer values the land based on the valuer's professional judgement. I am not one to second guess the professional judgement of a professional valuer. But let me give you some examples.

The clearance of land is not unique to the case of 26 Ridout Road. An example where SLA also cleared land to address disamenities is at a state property in Dalvey Estate in 2018. I referred to that in my Statement earlier.

The state property in Dalvey Estate had a significant amount of heavily vegetated land within the tenancy boundary. In June 2018, the tenant of the property, as well as the neighbours living in nearby houses, raised persistent feedback on mosquitoes originating from this heavily vegetated area within the Dalvey Estate property, which was tenanted out.

SLA's managing agent carried out fogging in the area. In spite of this, this did not resolve the problem.

Having confirmed with NEA that the heavily vegetated land was indeed the source of the mosquitoes, SLA carried out partial site clearance of the vegetated area and created a two-metre buffer to nearby properties. And with the agreement of the Dalvey Estate property's tenant, the fence line was in fact shifted inwards so that the SLA could take over the maintenance of the vegetated area.

Based on the MA's account, I think the tenant was not unhappy about the smaller fenced-in area because he did not have to maintain the vegetated land. There was no reduction in rental as the MA's valuation was based mainly on the gross floor area (GFA) of the house.

This case illustrates the issues at hand: that added land is not always a net gain in value and that some tenants may not be unhappy to reduce the land area to reduce the responsibility and the cost of maintenance. I hope that adequately addresses Mr Pritam Singh's question on that.

On the issue of addressing why Minister Shanmugam asked the Deputy Secretary – and I think Mr Pritam Singh said this has been going on for a very long time. I think Mr Pritam Singh should not make general comments like that unless he can back them up. [Interruption.] I do not know because that was a comment that you made – that it has been going on for a very long time. I did not understand what you meant by that and if you do not recall having made that statement, I would appreciate it if you withdraw that.

Minister Shanmugam explained why he approached the Deputy Secretary. As I had explained, this is not privileged information. Any credible tenant – any credible prospective tenant, and there are many examples of that who ask for this information, can either access it directly or can get it. So, this is not privileged information.

The issue of scarce commodity and land and so forth, I think Minister Edwin Tong has addressed that and I think he will be happy to address that further, if necessary.

Mr Deputy Speaker, I think that there are a number of different issues that can come up in today's discussion but the central issue, why we are here today, actually is to deal with allegations of corruption, abuse of power and conflict of interest.

There are other issues like how SLA manages state properties or indeed whether there are equity issues and so forth. Perhaps, these associated issues, we can deal with them subsequently. I will be happy to answer them, but let us satisfy ourselves first on these issues of corruption, abuse of power, conflict of interest, as several Members have asked. Let us satisfy ourselves on these issues. Then, we can discuss the other associated issues.

Mr Deputy Speaker: Second Minister for Law, would you like to respond?

The Second Minister for Law (Mr Edwin Tong Chun Fai): Mr Singh asked me two questions. I will address them. First, I think Mr Singh said that the use of the GFA as being the main driver for rental and marketability of a property – and I think you use the word "loophole".

It is not a loophole. When you say "loophole", you suggest that it is a policy that has not been closed off, that for some reason, SLA chose to use GFA.

I think if you heard my speech earlier, you will see that this is a market-driven consideration. We cannot set the policy and tell the valuers, just use GFA, ignore everything else, and expect that the market will adjust itself in a way which I have shown and I have explained.

I think the one real test of this is if you look at the Senior Minister's report, and I know you have them on the portal, I did not bring copies. You will recall an Annex. I invite members to pull it up from your portal. If you look at the table, the table says, rental rates of Black and Whites across Singapore, so, all Black and Whites across Singapore.

If you heard my speech earlier, you will know that these Black and White bungalows are managed by SLA as well as by external professional MAs – industry experts for real estate.

I would add that more of SLA's black and whites are managed by external professional MAs than they are managed by SLA themselves and these MAs have their own independent, in-house expert valuers.

When you look at the table that is in the Senior Minister's report, you will see that the benchmark, the criteria of using GFA as the determining factor for marketability and valuation of rental, is, I think, made out.

If you look at the table, you will see that at the time the tenancy was entered into for 26 Ridout Road, and that was in 2018, $26,500 as the monthly rental was the top three in all Black and Whites in Singapore. In 2019, it was the top four. In 2021, when it was renewed, it remained at the top four. Throughout this period, rental per GFA, throughout, remained higher than the average – right through – for 26 Ridout Road.

So, what was paid for 26 Ridout Road was within the top three in 2018, within the top four in 2019, all the way through to 2022. And remained, on a per GFA basis, higher than average – right through.

I want to emphasise that these valuations at which the rents are transacted, include those being done by external MAs who are professional and industry experts.

So, it is not a policy that we set to say, "Let us just use the GFA to assess the value of these properties", and then, there is a loophole somewhere where these properties are obtained on the cheap. They are not.

If you look at Annex E1, and I invite Mr Singh to look at it when he has some time subsequently, Mr Singh will then see that the point I made about the average rental per square metre per month on an average basis – 26 Ridout Road – was $30.94 and this is higher than the average of all Black and Whites at $29.78.

I think we have to move away from the suggestion that somehow, the methodology that is chosen was chosen to try and advantage some tenants.

In addition, you raised the point about the further land that was fenced in. I think you have heard Minister Shanmugam explain this. You heard the Senior Minister. You have seen CPIB's report, what was said about it. You have also heard Minister Shanmugam's instructions to his agent in relation to this additional land.

It is not land that can be enjoyed in the usual way as one might, if you are the owner of a property with a big piece of land, which you can develop as you like. I think you heard me say earlier the constraints, including on a tenant, and even if you are an owner of the land, the constraints if the property was conserved – as 26 Ridout Road was and remains to be.

The land was not something that this tenant wanted but was concerned about the maintain and offered to clear the land. And it was eventually at the tenant's cost. It was also maintained, subsequently, prospectively, by the tenant at $25,000 per year.

In addition, this land is not just fenced in on a "willy-nilly" basis. SLA had considered the reasons for doing so: why, what advantages SLA would have, like any reasonable usual commercial landlord would. It takes into account the fact that this is a tenant coming in, making me this offer, the market is down, as I had shown the Member. In fact, first quarter of 2018, if the Member sees my chart earlier, it was probably at one of the lowest points. It has been vacant for almost five years. The previous tenant pre-terminated and the previous tenant was paying a rent of $22,000 per month, five years ago. Market has since moved down. This tenant is offering you $26,500; is offering to maintain the land that otherwise SLA would have to maintain; has said, "I'm prepared not for this to be fenced in; I don't want it but I will pay for the maintenance because we are concerned with health and safety issues, trees, mosquitoes and so on".

SLA's calculation then is to consider all of these factors along with the fact that this tenant is also offering to put in enhancements to the tune of more than half a million dollars as you heard Mr Shanmugam say, which are enhancements that the landlord will retain at the end of the period. And, at the same time, help us to meet the conservation costs that the external consultant has assessed independently and calculated.

So, when you weigh up all these factors and take them into consideration, I think you can understand why SLA decided that, in fact, if we get this tenant, it would be great, given the occupancy, and given the market. But if you could additionally have this fenced-in so that this becomes an obligation in the tenancy and not just something that that could be terminable with notice in an option, as was suggested, that would improve SLA's position.

And so, overall, looking at all these factors and the piece of land in question which abuts the neighbour, 24 Ridout Road – it sounds very big when you mention it in the way that you have done, Mr Singh, but it abuts the neighbour, it is relatively inaccessible, there are only a few access points, it is not a common space where otherwise it could be parcelled out and tenanted to another tenant. For many years prior to that, there was no monetisation of that land by SLA. In fact, it was just a burden – SLA had to maintain it.

So, when we consider all these factors, take them all into account, I think the Member will see why this was a transaction, as I said in my speech earlier, was something that was at arms-length, negotiated, commercial and sought to achieve the state's interests as well.

I think you have to look at it in that perspective when you talk about the land and throw the numbers around without the context of the sequence of events and the chronology of how the matters unfolded and the relative interests of the two parties, in particular, from my perspective, that of SLA, as we sought to protect SLA's interests and try and advance SLA's interests at least in terms of the maintenance thereafter.

You asked a second question about why Minister Shanmugam has said that he was not confident that the surrounding land would be properly maintained. You heard Minister Shanmugam earlier. He had offered, through his agent, to maintain this land at his own cost after it was cleared of the overgrown vegetation. SLA agreed to this clearance, did what it needed to do to address the health and safety concerns – there were snakes, mosquitoes and fallen trees which I also mentioned – but since this is a reference to what Minister Shanmugam said, I will invite him to clarify his position on this.

Mr K Shanmugam: Mr Deputy Speaker, Sir, if I can add on to Mr Tong's clarification. I did not tell SLA that I was not confident about them maintaining the adjacent land. Based on my recollection, the essence of what I told SLA was that they have many state properties across Singapore to manage. In comparison, I – as a prospective tenant of 26 Ridout Road – would be able to give more attention to the adjacent land. It is right next to me. I also had an interest, specific interest, in the proper upkeeping of the adjacent land and any disamenities arising from it would affect me directly. So, those were the reasons I gave to SLA.

Behind that is my thinking: that they have to look after all of Singapore, and my confidence in their ability to maintain that land in the way that I will maintain it. It does not mean that they will not maintain. But in any given context when I am maintaining it, one piece of property, it will always be different compared with someone who has got to manage all over Singapore. So, I told that to CPIB and that appears in CPIB's report.

But I told SLA, "You have all of Singapore to manage. I can manage this one property, if you are willing." I know that it is a cost centre for them and it is a cost centre for me but I will be able to better manage. So, that is the context in which I said to CPIB I was not confident. So, I think one has got to understand these contexts.

Mr Deputy Speaker: Mr Zhulkarnain Abdul Rahim.

Mr Zhulkarnain Abdul Rahim (Chua Chu Kang): Thank you, Mr Deputy Speaker. My first supplementary question is to Senior Minister Teo. In Senior Minister's report, he concluded that Mr Shanmugam had declared the potential conflict of interest and removed himself from the chain of command.

I would like to ask Senior Minister to comment on the Code of Conduct for Ministers which speaks out for an apparent and a perceived conflict of interest and a Minister should not be in a position where his financial interest might be even conceivably in conflict with his public duty. So, how should these standards be looked at in the light of Minister Shanmugam's case?

The second supplementary question is a short supplementary question for Minister Shanmugam on his CPIB interview. I would like to ask Minister whether he was administered a caution when he attended at the CPIB for the interview.

Mr Deputy Speaker: Senior Minister Teo.

Mr Teo Chee Hean: Deputy Speaker, I am conscious that I am surrounded by lawyers and I am not one myself. But I will try and explain on this issue of conflict of interest.

On conflict of interest, Mr Zhulkarnain has referenced the Code of Conduct and asked essentially whether there is potential or perceived conflict of interest in the case. Conflict of interest arises when two things coincide: when a person's duty, for example, a function or responsibility from the office or position that he occupies, conflicts with his own personal interests. So, both of these elements have to exist. If there is one without the other, no conflict arises. So, both have to exist.

A conflict can be actual, which arises when a person, in fact, makes a decision on a matter where his duty and his personal interests in that matter remain. So, his duty and his personal interests are there and he made a decision in his capacity which affects his personal interests. Or it can be a potential conflict of interest, which arises when a conflicted person is in a position to but does not yet make such a decision. So, that is a potential conflict of interest. Either of these scenarios have to depend on the specific facts of each case. A conflict is not a conflict just because of someone's perception of the facts.

In my report, I have found that there was the potential for a conflict of interest to arise, a potential. However, Minister Shanmugam identified this potential conflict of interest early, beforehand, and took steps to prevent it from actualising. He removed himself from the chain of command and recused himself from any decision-making for the matter in question. He informed the Ministry of Law to clear any matters related to the tenancy if it arose with then-Senior Minister of State Indranee Rajah and, if necessary, with myself.

By removing himself from the chain of command, Minister Shanmugam took himself out of any decision-making responsibility in the matter. So, he no longer had any duty in this matter and therefore, that factor disappears.

Once there is a recusal, no duty arises. There can thus be no conflict.

And I am told by lawyers that the best way of dealing with any potential conflict of interest is to disclose the potential conflict and then proceed to recuse oneself altogether from the decision-making process. And this is what happened here on the facts of this case.

Given the recusal and removal from duty, there can no longer be any potential conflict nor does a perception of conflict arise and therefore, there is no breach of the code of conduct.

So, when we talk about perception of conflict, once we are clear that potential conflict no longer exists and we know that actual conflict did not exist, that should dispel the idea that there is a perception of conflict of interest in the minds of any fair-minded person.

Mr Deputy Speaker: Minister Shanmugam, would you like to respond to Mr Zhulkarnain?

Mr K Shanmugam: Well, Deputy Speaker, Sir. Yes, as I said in my earlier Statement, they read out to me section 27 of the Prevention of Corruption Act, and I think in section 27, caution was in these terms: "Every person required by the Director or any officer to give any information on any subject which it is the duty of the Director or that officer to inquire into under this Act and which it is in his power to give, shall be legally bound to give that information." I think a breach of it could expose you to a penalty of up to it a year in jail or $10,000 fine.

Yes, this is a standard practice and I am sure Minister Vivian was administered too. I certainly was administered.

Mr Deputy Speaker: Mr Louis Chua.

Mr Chua Kheng Wee Louis (Sengkang): Thank you, Deputy Speaker. Just two clarifications for Second Minister of Law Mr Edwin Tong.

The first is regarding the issue of favourable rental rates and whether, as a result of SLA's management of the renewal process as well as of black and white properties, has this arisen. I note that the property at 31 Ridout Road was renewed in October 2022 for three years, with the rent increase to $20,000 from $19,000. This is about 5% increase or so. But if we consider the market conditions, which the Minister also spoke about in his speech just now, if we look at the URA private residential rents, that has increased by about 42% during the same period. And if we just zoom in on landed properties, it has increased by 35%.

So, even if we look at HDB properties, just looking at the 4-room flats in Sengkang during the same period, the median rents have already increased by more than $1,000 in the same period as well to about $3,000 a month. This also comes in the period where the occupancies of the black and white houses as a whole and as well as Ridout Road, have increased over this period of time, suggesting that, actually, specific to black and whites, demand has also increased.

The second clarification is in relation to the direct tenancy process. It is stated on the SLA website that state properties are supposed to be let out through open tender to ensure the process is fair and transparent.

In this regard, I know that 31 Ridout Road was, indeed, on the SPIO website, but 26 Ridout Road was not. And I think in the May statement by SLA, it was said that Minister Shanmugam was the only bidder and his bid through an agent was higher than the guide rent. Subsequently, in a response to CNA, one of the property agencies' director for research even said that SLA properties are tendered out through a bidding process. So, in this case, for SLA as a whole, when it comes to dealing with direct tenancy agreements rather than requiring a tender, would that then be amounting to something like a raid on the reserves again? Because if you look at how land sales are being processed by URA, if there were a developer that wanted to —

Mr Deputy Speaker: Mr Chua, kindly proceed to your clarification.

Mr Chua Kheng Wee Louis: I will wrap it up.

Mr Deputy Speaker: Your specific question on your second point, please.

Mr Chua Kheng Wee Louis: Yes. So, that is really the question – in that in not requiring a tender but rather through direct tenancy agreements, if you compare the process of SLA versus, say, how URA manages the land sales process, for example.

Mr Deputy Speaker: Minister Edwin Tong.

Mr Edwin Tong Chun Fai: Thank you, Sir. Mr Chua, 31 Ridout Road was managed by an external professional managing agent which looked at the renewal and also did internal valuations independently to assess what the appropriate rental would be upon renewal. That is the process and that was what was done and the guide rent for the renewal was met and that is why it was renewed.

To your point about the movement of the market, if you were to just pick up the table I gave out earlier and look at the chart, renewal was done for 31 Ridout Road around the early part of 2022, Q1. There were some discussions over the fact that there were some disamenities, I think, there were some noise issues and so on. So, the precise start date was subject to negotiations. But the discussions took place around this period – end of 2021 and early 2022. And if you look at the chart that I have produced, this is the URA rental index, you will see that at that level, at that location, the rate was similar to when — if you look at the horizontal lines across, similar to when the lease was entered into. So, it roughly accounts for this.

Beyond that, I think you also made the comparison with private detached homes, GCBs and so on. I would ask you to also bear in mind what I said earlier, about these properties being intrinsically older. So, leaving aside that they are spruced up and made habitable and so on, there is also a question of these fundamentally being older, not possessing the usual amenities and facilities that you might expect to see in a GCB or a bungalow of this comparable size.

So, I think that accounts for the difference in the market. Whilst I appreciate the point you are making that, right now, if you look at it today, there is a spike and presumably that also has an impact on the rental market for Black and Whites. That is true, because when we look at the performance of rental markets, rentals for Black and Whites now, it is obviously very different from when it was in 2018, 2019 and so on. And you must bear in mind also that in 2021 and 2022, there was still the COVID-19 overhang over the market at that point in time. So, these are factors that really — I am not a property agent and I am not a real estate expert, but I go back to the first point I made to you, which is, this is looked at by an external professional managing agent – in this case, it was Colliers – which managed the renewal and they have their own in-house expert valuers and I would not second-guess that.

Your second point – I think your words are "a raid on the reserves" because we do direct tenancy and not a tender process – I have explained that in some detail. You have to adopt a method that coheres with the movement of the market. If the market is on its uptrend, there is a lot of demand with limited supply, then I think you want to make sure that you put it out as much as you can, as publicly as you can, so that there is a really big showing of the properties on offer that is being supplied so that the demand can match up with the supply.

But when you have the converse situation in a falling market or a softening market or a more depressed market, then you might end up with a situation where having more or listing everything will mean that you are simply competing against yourself. There are many more options than the demand meets. So, you have to attenuate based on that. And that is also something that, not just SLA does, but also the managing agents that are engaged by SLA. That is how they also approached the issue. And that is what they do as well. That is not to say that because it is not on SPIO, that it is not marketed.

You seem to suggest that because it is not on SPIO, therefore it is less exposed. But, remember I said that each of these agents also have their own property portals. And, in fact, the property portals will be shared amongst the real estate agents. When they come in, if you make a serious inquiry, an agent who is familiar with this segment of the market, will know where to access the information. You might see one or two on SPIO that you might want to have a view, but when you get there and you talk to the agents and if you are a serious prospect for tenancy, this agent will have access to others. So, in a softer market, that is how it is done. And that is the position that has been taken, not just by SLA, but also by its managing agents.

Mr Deputy Speaker: Ms Nadia Samdin.

Ms Nadia Ahmad Samdin (Ang Mo Kio): Thank you, Deputy Speaker, and I thank each of the Ministers for addressing the questions raised, including those which affect their personal and public lives.

I would like to follow up on Second Minister for Law, Mr Edwin Tong's Statement, relating to SLA's processes, in particular, the preparatory works for the rental of the two properties and ongoing maintenance for black-and-whites. Can I clarify how SLA scopes and awards contracts to different entities from consultants to contractors for the restoration and maintenance works for both categories of black-and-whites? For example, is there a pool of pre-approved vendors? What is the process by which SLA designates what works will be borne by SLA and which works will then be at the tenants own cost? I would also appreciate particularly if the Minister can address allegations that the contract for works relating to the properties was awarded to a firm of which Minister Shanmugam's son serves as CEO, called Livspace.

Mr Deputy Speaker: Minister Edwin Tong.

Mr Edwin Tong Chun Fai: I thank Ms Nadia Samdin for the question. As I explained earlier, we put in place a system where an external consultant is engaged to study and have regard to the conservation guidelines and study the state of the property and make recommendations to SLA as to what works needed to be carried out, and also how they need to be carried out, given the conservation guidelines.

So, this is external to SLA. They are consultants and they make a recommendation to us. After that is done, as I said, we time it such that we try not to disrupt the existing tenancy, if there is a tenant that is in place occupying the premises. And we also try and time it such that once this is done, there is a greater prospect of a confirmed tenancy so that the rental income stream can then be used to meet the cost of these works that have to be done.

And that was what was done in 26 Ridout Road. And when the works are confirmed and we accept the recommendations of the consultant, the works are then carried out by a separate contractor, not the consultant. And in this case, what happened was we put up an open tender and a term contractor was then appointed to carry out the works.

In addition, there was also an appointment of a conservation specialist to advise on certain aspects to cohere with the conservation guidelines. The suggestion that Minister Shanmugam's son or his company, Livspace, was appointed – and I think the sting of these allegations is that there is a preference given to this – is completely scurrilous and unwarranted. There is no basis to suggest that. For both 26 and 31 Ridout Road, the works that were recommended by the consultant was then done and awarded to a contractor through a tender and Livspace was not an appointed contractor; neither did they have any transactions with SLA, as far as we can tell, from the quick checks that we have done since these allegations began to surface online.

Mr Deputy Speaker: Ms Hazel Poa.

Mr K Shanmugam: Deputy Speaker, Sir, since this relates to me in a way, can I be permitted to add to this?

Mr Deputy Speaker: Yes, please.

Mr K Shanmugam: Inevitably, there were and are many untruths circulated about me, my rentals. Inevitable because I am a political figure and obviously a target. For example, the falsehood that SLA had built a car porch for me or that I had cut down trees illegally or that I am paying less than market value, all the innuendos, some of which we heard in Parliament about land being added as if it is a special favour, even though the fact shows that I did not want it. And I have explained why. It is a cost centre. The CPIB has established these and other allegations to be untrue.

But I have not been the only one attacked. My son has also been attacked. Allegations online that the contract to renovate the Ridout properties – in plural – was awarded by SLA to a company where my son is the chief executive officer (CEO). I do not keep track of SLA's contracts. There are established processes for the awarding of contracts by Statutory Boards. My son tells me that his company does not have any contracts with SLA; nor that they do any work on the Ridout properties for SLA.

You get these utterly false and defamatory statements. Do these people really believe that CPIB would not have found these out if it were true? I say to these people: You want to come after me, you come after me. I am perfectly capable of defending myself and they will find out that I will defend myself. But leave my family alone. This is how some conduct politics – try and make it difficult or impossible for family members or people who are prepared to come into public service – by putting out deliberately false information.

Mr Deputy Speaker: Ms Hazel Poa.

Ms Hazel Poa (Non-Constituency Member): Thank you, Deputy Speaker. My question relates to the site clearance and the land adjacent to 26 Ridout Road. Senior Minister Teo mentioned earlier, quoting another example of a site clearance at Dalvey Estate and said that it was for a two-metre buffer. But the site clearance at the land adjacent to 26 Ridout Road is actually 150,000 square feet, if I am not wrong. So, the size of the two are actually quite different and seemed like an overkill. So, my question is: are there any other site clearance to the scale of 150,000 square feet?

Secondly, the notion, while I accept that the rental will be more based on the gross floor area than empty land area, but it is a bit difficult to accept that the large empty extra land that is added into the boundaries of 26 Ridout Road is put at zero value. So, my question is: was the Valuer specifically asked to value that piece of empty land as well, or is it simply a case of valuing the original 26 Ridout Road at $24,500 and plus the recovery of site clearance cost at $2,000 per month only?

Mr Teo Chee Hean: Mr Deputy Speaker, I cited the case of the land at the tenancy at Dalvey Estate not so much to compare the area of the land but to make the point that having more land is not always an advantage. In that case, the tenant of the Dalvey Estate property was not unhappy that his land area was actually reduced. There was a reduction in land, and he was actually not unhappy that the fence line was moved in. His land area in the tenancy of the property was reduced and SLA actually took over the maintenance of the land which would otherwise have been within his property. So, that was the point I was making and I think Ms Hazel Poa may have missed my point, but I make it again.

Second, on the valuation of the property, the valuation of the property is done by the professional valuers and I would not second-guess their valuation. And the valuer in SLA was asked what is the valuation of the property with the inclusion of the additional land cleared, and the valuation that was given by the Valuer was $26,500. So, that is the professional valuation from the professional valuer.

Mr Deputy Speaker: Dr Tan Wu Meng.

Dr Tan Wu Meng (Jurong): I thank the Ministers for their Ministerial Statements. I have a clarification to put to the Senior Minister. The financial sector and banks have a category called "politically exposed persons", or PEP. Depending on jurisdiction, it can include Ministers, Members of Parliament, leaders of political parties of any persuasion and their immediate family members. Should the Public Service consider having a framework whereby the personal transactions of politically exposed persons with Government agencies be automatically flagged out for additional scrutiny? This helps further ensure that public officers are in the clear, protects the public officers from allegations of malfeasance and it also helps ensure the politically exposed person is in the clear as well, regardless of their political persuasion.

Mr Teo Chee Hean: I thank the Member, Mr Deputy Speaker, for his suggestion.

Financial regulators require banks to apply enhanced customer due diligence on customers that are identified to be politically exposed persons. I have a lot of difficulty opening a bank account in another country.

Banking transactions can involve – and this is the reason – because banking transactions can involve the transfer of substantial funds that flow rapidly – and many times even in a day or in an hour – across borders from multiple sources to multiple destinations. So, the banks are, therefore, required to know their customers, KYC, and exercise vigilance to flag suspicious transactions so as to prevent money laundering and terrorism financing.

Those are the two principal reasons why the politically exposed person's framework has been established for financial institutions (FIs).

The considerations, Sir, are different for transactions by political officeholders and public officers with Public Service agencies. A potential conflict of interest can arise in a transaction with a Government agency but also in making a policy or an administrative decision. So, there may have been no transaction but a public officer or a political officeholder may be making a policy which impacts him. Or in a transaction by persons in political office or in the Civil Service with non-public sector organisations. And given the context of the work of public agencies, a number of measures have already been put in place.

For key transactions, especially transactions that involve public tenders and the evaluation and award of major projects, there are already processes for public officers to declare conflicts of interest upfront.

For public sector transactions, there are suitability checks carried out on the counterparty and, even in this case, for the rental of state properties, there were suitability checks carried out on the prospective tenant.

The Public Service also has an internal disclosure policy. An officer is required to report any wrongful practice to the head of his agency even if he has been instructed by his superior not to do so. So, he is required to report any wrongful practice that he comes across. There will be an investigation into the allegations and what we conventionally call the "whistle-blower" will be protected if he has made the report in good faith.

So, there are multiple measures in place and it is quite different from the very rapid transactions that can take place, the transfer of funds in a bank, and that is why the banks require a PEP-type of system upfront.

I should also point out that the types of checks at the agency level are only part of the system and actually do not address the fundamental issue at hand. And the fundamental issue at hand is that the onus still rests on the individual to declare and recuse himself to prevent a conflict of interest from arising.

So, even if checks and processes by the public sector organisation do not flag a conflict of interest, the individual still remains responsible and will be held accountable if he is subsequently found to have a conflict of interest, abused his powers or improperly made use of privileged information.

The Public Service will continue to reference the best practices in other sectors, such as the financial sector, to keep improving its system of governance. For example, once a year, officers in positions of authority over funds and so forth have to take leave and somebody else takes his place.

So, the public sector has rules where persons in such financially sensitive positions cannot stay in that position sort of indefinitely. They have to be rotated and these are some of the rules that are in place. And I mentioned to Members that the Public Service Division (PSD) is working with relevant Ministries to see how we can implement declarations specifically on rental transactions and the Prime Minister's Office (PMO) will look at that as well.

But these are examples which add to the guidelines. But the general principle still applies all the time.

Mr Deputy Speaker: Ms Sylvia Lim.

Ms Sylvia Lim (Aljunied): Thank you, Deputy Speaker. I have a clarification for Senior Minister Teo on the standards expected of our Ministers. I must say that I find it disappointing that he reduces the issue of conflict of interest into a legal argument. I mean, in the Code of Conduct for Ministers, it is stated quite clearly at the bottom of the document that the document does not have the force of law and whether there is a breach or not is not justiciable in a Court of law. So, does he agree with me that actually the Code of Conduct embodies the highest standards expected of our Ministers in the conduct of their public affairs and it should not be the subject of legal arguments or technicalities?

The second clarification on a related point is, if one looks at para 3.2 of the Code of Conduct, it is stated very strictly, "A Minister, therefore, must never enter into any transactions where his private financial interest might even conceivably come into conflict with his public duty". So, that is what is stated there – never enter into transactions where his financial interest might conceivably come into conflict with his public duty. So, does the Senior Minister agree that it might be reasonable to interpret this to mean that actually the Law Minister should not have entered into this transaction with the SLA, which is an agency under his charge, or, at the very least, it was imprudent of him to do so?

Mr Teo Chee Hean: Mr Deputy Speaker, Sir, Ms Sylvia Lim is a lawyer as well. I explained to another lawyer earlier, Mr Zhulkarnain what conflict of interest means.

Two things must come together at the same time, and this is not a legal description. It also underpins what our understanding of conflict of interest is in the Code of Conduct. There must be some official power that you have over some matter and that matter coincides with a personal interest of that person.

Those two things must come together. There is an actual conflict of interest if the person with that duty, with those powers, uses them on a matter in which he has a personal interest.

There is a potential conflict of interest if that person retains that power and there is a matter which is there, which is his personal interest, but no decision or action has yet been taken by that person. So, that is removed. The potential conflict of interest is removed if the person removes himself from that duty.

Ms Sylvia Lim is a lawyer and I think she understands that. So, that is the import of what conflict of interest is about. And Mr Shanmugam took steps to make sure that he removed himself from those duties and powers that he had over a matter which would have been a private matter and, therefore, the two were separated and one of those two factors which must exist for conflict of interest to arise, which is that the person must have powers over that private matter, was removed.

So, that is very important and I explained that earlier and I hope that that will satisfy Ms Sylvia Lim.

And as I said, there are perceptions. But once the actual conflict of interest and the potential conflict of interest have been removed, that should dispel the perception of conflict of interest in any fair-minded person.

Mr Deputy Speaker: Mr Xie Yao Quan.

Mr Xie Yao Quan (Jurong): Thank you, Deputy Speaker. I have two points of clarification.

First, on the clearing of the adjacent land at 26 Ridout Road, I would like to ask how many trees were actually cleared and did the review by Senior Minister Teo look into not just SLA but NParks – as an involved agency – NParks' process to determine the removal of trees, which trees were removed and so on and, most crucially, did NParks know the identity of the prospective tenant in the course of this process.

Second, on land management, I would like to ask what is the total land area the state-owned portfolio of black and whites actually sit on and how might this factor into the Government's weighing of economic and social factors to determine how best to use the land and manage the portfolio of bungalows.

Mr Teo Chee Hean: I am sure Minister Edwin Tong would like to reply. But this is an issue of land management. As I said earlier, I think we should clear the core issue first, which is, whether there was corruption, abuse of power or conflict of interest and that is the reason why we are here today. And we should clear those issues and if any Members have any clarifications or questions on those issues, I will be happy to take them.

Mr Deputy Speaker: So, Minister Edwin Tong, you are going to respond to that later I understand.

Mr Edwin Tong Chun Fai: Yes.

Mr Deputy Speaker: Mr Leon Perera.

Mr Leon Perera (Aljunied): Thank you, Mr Deputy Speaker. I thank the Ministers for their Statements.

My first supplementary question is really on the determination that the conduct of the Ministers in this case is consistent with the Ministerial Code of Conduct, why was that determination not passed to an independent third party to make? For example, the AGO or, for example, an independent judge?

I am not asserting that Senior Minister Teo's review is not independent, but I think the perception that that judgement, that determination was being made by someone who is not a senior colleague of the Ministers concerned but is an independent entity would go some way to address some of these public concerns. And the Auditor-General does have expertise in understanding norms of best practice within the Public Service, norms of corporate governance, audit compliance and so on and so forth and, I would note, Mr Deputy Speaker, Sir, that in reply to a Parliamentary Question I filed, there had been two occasions when the Auditor-General was asked to do a special audit in the last 20 years.

The first occasion was to interrogate the claims made by an opposition leader, Mr Chee Soon Juan, in the 1990s; the second occasion was to investigate the finances of Aljunied-Hougang Town Council. So, why could the Auditor-General not have been called in to make that determination, not of corruption – I appreciate the work of the CPIB – CPIB's expertise is prevention of corruption act – but to make a determination about consistency with the Ministerial Code of Conduct.

Second, I want to come back to para 40 of the Report – Minister Shanmugam requesting the information about some of the black and white bungalows from the Deputy Secretary at MinLaw. I am trying to understand how this is not problematic because, based on the Report, SLA has explained that there is a deliberate policy intent here that in certain times, like in a down market cycle, the deliberate intent is not to make too transparent all these listings, which is why 26 Ridout Road was not listed in the SPIO. It is not by accident, if I can just read very briefly from The Straits Times article that talks about why SLA has this policy: "When market conditions are poor and supply exceeds demand, or the occupancy rates for specific estates are low, 'publishing complete listings of all vacant properties online would result in these properties visibly competing for the limited demand, and thus may not help the landlord maximise outcomes'". So, in this case, how is the action of the Minister for Law to ask for information on properties – some of which are not listed on the SPIO into one, simple, consolidated factsheet – how is that not problematic?

And lastly, on the methodology, to choose a methodology of direct tenancy negotiation versus open bidding, I understand from Minister Tong's Statement earlier that, in a direct tenancy —

Mr Deputy Speaker: Mr Leon Perera, perhaps you can take that later, because we want to clear the more fundamental issues first.

Mr Leon Perera: Alright.

Mr Teo Chee Hean: Mr Deputy Speaker, Sir, I appreciate, I did not want to bring up the issue of when the Auditor-General had to be called in to look into issues and the Member is the one who brought it up. I did not want to bring up that history and link the two. But since the Member has, I may have some comments on that as well.

Why not the Auditor-General and why the CPIB? Sir, the Auditor-General looks at things which have got to do with audit. Was there a misappropriation of funds? Was there a loss of funds because somebody was not doing the accounts properly and so on? That is the Auditor-General's function. To ask the Auditor-General to comment on whether or not the practices were in line with the code of conduct for Ministers, I think goes beyond the ambit of the Auditor-General. I think, eventually, the Government, the Prime Minister, has to take responsibility for that. And we are. Why do we call in the CPIB and not the Auditor-General? Because the CPIB is the agency which investigates such matters. And we know the reputation of the CPIB. It is a very thorough, it is a very independent agency and, as I said just now, it can be quite a fearsome agency. And the fact that the Prime Minister called in the CPIB to carry out this investigation on two senior Ministers shows the seriousness with which this Government and the Prime Minister took this issue.

I suppose, Mr Speaker, Sir, if we had called in the Auditor-General, Mr Perera would have been standing up, asking me why did you not call in the CPIB, since the CPIB is the most appropriate agency to investigate such an issue.

Sir, I think that underlying a number of these questions are a couple of things. This idea that there is some secret list somewhere which nobody knows about, and that renting such properties confers some benefit or privilege which others cannot access. So, I think the investigation – and what I have stated and what Mr Edwin Tong has stated – refutes both of these; dispels both of these.

First of all, there is no secret list. It is public information what properties are available for lease. SLA wants to maximise the renting out of these properties and to do its best for the state in doing so. So, there is no reason for SLA not to want to provide those properties and the list of those properties.

Mr Pritam Singh earlier talked about individuals having to go to considerable expense to find out and so on. Actually, they do not have to. In the case of the company that I talked about, they did not have to pay anybody to get the list. They asked SLA, and SLA was quite happy to give it to them without charging them because SLA wants to rent out its properties.

So, there is no secret list. It may not be on the SPIO, but any credible tenant who wants to rent those properties will know which properties are available.

Second, the properties are rented out at market and, so, there is no great benefit from being able to rent out these properties. So, let us dispel these two things and put them to rest, although Mr Perera does bring them up. But I thank him so that I can explain these things quite clearly. So, I think I have addressed Mr Perera's points.

Mr Deputy Speaker: Ms Poh Li San.

Ms Poh Li San (Sembawang): Thank you, Mr Deputy Speaker. I have two questions. Notwithstanding the findings that both Ministers were cleared of any wrongdoing, the revelations of the Report have since raised more concerns from the public.

So, the first question is for Minister Edwin Tong. For 26 Ridout Road, which had only attracted one bid, did SLA not solicit additional bids after the extensive refurbishment was completed to test if the price was still a fair market price?

And my second question is for Minister Shanmugam and Minister Vivian. The Ministers' Code of Conduct clearly mandates that Minister must scrupulously avoid any actual or apparent conflict of interest between their official duties and private financial interests. So, it is in the interest of transparency that both Ministers declare all their property assets. If there are any, will the two Ministers declare if these properties have been rented out anytime during the lease of 26 and 31 Ridout Road to assure the public that there is no monetary gains from lease arbitration?

Mr Teo Chee Hean: On Ms Poh Li San's second question, there is no requirement today under the Code of Conduct for the type of declarations which she is talking about. And I did mention what the Code of Conduct does say and what it covers. I will leave the rest of the questions to Minister Edwin Tong.

Mr Edwin Tong Chun Fai: To Ms Poh's first question, the property remains on the market until the lease is signed and confirmed. So, at any point in time up till the time when it is off the market, that is when a tenant confirms his tenancy, it continues to be marketed. So, to answer the Member's question whether before, during or even after, as long as the incoming tenant has not confirmed, it remains on the market and it will be marketed by the agents.

Mr Deputy Speaker: Ms He Ting Ru.

Ms He Ting Ru (Sengkang): One clarification for Senior Minister Teo. Senior Minister Teo stated that he was not within the chain of command in making the decision, therefore, he was not involved in the matter and, therefore, he headed this review. Senior Minister Teo also mentioned earlier that he relied on the independent CPIB report.

However, when the declaration was made to him back then, and Senior Minister Teo was made aware of this matter, I assumed that he was already satisfied then that all actual or potential conflicts of interest were satisfactorily addressed back then and, therefore, the matter was put to rest at the time; otherwise, he would have voiced his concerns at that time.

Given the public interest in the matter and the importance of public perception that there was no wrongdoing, what was the reasoning behind asking Senior Minister Teo to investigate the matter this round? Were there really no other options or individuals who could have led the review? After all, CPIB usually looks at whether there have been any breaches of criminal laws, which they have investigated here and cleared the Ministers of doing.

The review headed by Senior Minister Teo would also need to go beyond criminal matters, including looking at whether they have been any breaches of Ministerial code of conducts or the rules of prudence and also about the perception and the conflicts.

I ask again because if Senior Minister Teo had been satisfied back then that any actual or potential conflicts of interests were actually addressed satisfactorily, it seems strange to ask him to now relook his earlier conclusion that everything was adequately addressed.

Furthermore, apart from relying on the CPIB report and given the questions raised – they actually go beyond criminal matters – were there any other specific steps that were taken to ensure that there was adequate independence throughout the review?

Mr Teo Chee Hean: Mr Deputy Speaker, Sir, I think I have already explained my position. Mr Shanmugam told me what he was going to do and I accepted that. I did not approve his rental, I did not take part in any of the transactions.

As I explained, Mr Deputy Speaker, this is similar if you had a situation where you have a Chairman of a company or an organisation, and a director comes to him and says "I have a conflict of interest, I am declaring it, and I am taking steps to make sure the conflict of interest does not arise".

Subsequently, it is discovered, or it is alleged that that director had a conflict of interest, it does not preclude the Chairman from convening a disciplinary committee or even sitting on it, unless he was a participant in the actions of that director which resulted in the conflict of interest.

So, that is the situation that I am in. It is very different if you had an organisation which convenes a disciplinary committee and the persons who convene the disciplinary committee, take part in the disciplinary committee themselves and are involved parties. That is a conflict of interest.

So, I think one must differentiate the two situations and I hope that Ms He is able to do that.

Mr Deputy Speaker: Mr Dennis Tan.

Mr Dennis Tan Lip Fong (Hougang): I thank the Ministers for their answers.

I am seeking a clarification from the Senior Minister. I know Senior Minister has explained to the other Members of Parliament's queries. I will come back to this point on Minister Shanmugam asking the Deputy Secretary for a list of the property and I have been trying to understand Senior Minister's explanation and I find that there are still issues that we need to overcome here. Let me put it in a certain way and then I can put the question to the Senior Minister.

And because we are talking about a Minister who is asking a Deputy Secretary in his Ministry a question relating to his private interests, not in the course of his work, and then, on a part of the Deputy Secretary, I think there is an issue whether the Deputy Secretary had to decide whether this is a matter of work. And if it is a matter of work within his responsibility, is it contingent on him to answer? Is it appropriate for him to answer this question? I do not think these issues have been adequately clarified. It is important to clarify this as a matter of guidance for the Civil Service, because the civil servant, the senior civil servants must know where the line is drawn.

For example, Senior Minister, in this issue, the Deputy Secretary could have politely informed Minister Shanmugam that he can get his agent to direct a question to SLA. That I think would, in my view, be an appropriate form of answer rather than to take it upon himself. So, I would like to ask the Senior Minister to reconsider his earlier answers in light of the issues I have raised because it pertains to — I think it is important for the future when a senior civil servant or a civil servant has to answer a question from an officeholder what he is entitled to do, what he should do.

Mr Teo Chee Hean: Yes, I thank Mr Dennis Tan for his question because it is an important question. But the key issue here is, was there privileged information that the Minister was seeking, and was there privileged information that he was trying to obtain? And so, I think the key issue here is that there was none. There was no privileged information that the Minister was seeking to obtain.

And Minister Shanmugam explained, in his own terms, why he decided to approach the Deputy Secretary because he was doing this in an open, transparent way to tell his Ministry, "I am doing this. There is no secret about it." He could have got an agent and go and approach SLA and then later on, SLA discovers that actually the Minister was behind it. Is that better or is that worse? I think it is a judgement.

In this case, I think the Minister told his Ministry and was quite open and transparent about it. And if he had got an agent to go and approach SLA, and then SLA provides information or whatever it is and, in the end, they discovered that actually the person behind it was the Minister and the Minister did not say anything about it, the question is whether that is better or worse? But in this case, it was done openly and transparently, so I think that is important.

Second, as I said, was there privileged information that was asked for? And the answer is no. So, I think those are the principal issues at hand.

Mr Deputy Speaker: We are still on the "conflict of interest" theme. Minister Shanmugam, would you like to respond?

Mr K Shanmugam: Yes, Sir. In specific answer to Mr Dennis Tan, Senior Minister Teo answered. I think I explained in some detail why specifically the Deputy Secretary and the Member heard the Senior Minister. What was in my mind is, I should let the Ministry of Law know because that way, the Permanent Secretary will know, the Deputy Secretary will know. These are senior administrative service officers.

I could have written direct to SLA or I could have asked my agent to write direct to SLA; and I know based on practice, they do give this information. And I explained why I thought that it was better to ask the Deputy Secretary. It was a judgement call. It was better to ask the Deputy Secretary rather than going direct to SLA. If I had gone direct to SLA and SLA receives a letter, is that better? Or is it better that there is the Deputy Secretary who, together with a Permanent Secretary, knows that this is happening, gets a list, and I look at it and then I recuse myself if I want to proceed.

So, everything is transparent, above board. And I think it was important for me to have told my Ministry. So, this is not on a private errand or something. I looked at it as I am telling my Ministry and saying – I mean I did not express it – but that is the understanding; they understood me and I understood my thinking. Which is, if I ask you, you get it, I look at it. That way, the Ministry knows what I am doing, rather than writing directly. And I see that as something that is entirely proper.

Mr Deputy Speaker: Senior Minister Teo Chee Hean.

Mr Teo Chee Hean: Thank you, Mr Deputy Speaker. I thought I should make a clarification on something I had just said, which my colleagues said may possibly be misunderstood. I had earlier said that it is important to observe the spirit, rather than the letter of the Codes. I think that is open to serious misinterpretation.

What I meant was, it is important to observe the spirit and not just the letter of the Code. And I think if you look at the context of what I was saying, you will appreciate the context because there are many examples that are given. You may just follow the examples but if you do not follow the spirit, that is not good enough. So, you must follow the letter of the Code, but that is not good enough. You must follow the spirit as well. And I thought I should clarify that in case it is taken out of context.

Mr Deputy Speaker: Mr Gerald Giam.

Mr Gerald Giam Yean Song (Aljunied): Thank you, Mr Deputy Speaker. I have questions for Minister Shanmugam as well as Senior Minister Teo. Mr Deputy Speaker, why could Minister Shanmugam not inform his Permanent Secretary separately after getting his agent to make the inquiries and did he make clear to his Deputy Secretary at the time that he asked him that he was making this request for the purpose of transparency?

To Senior Minister Teo, does Senior Minister Teo think that as long as no privileged information is asked for, a Minister can make a personal request of a civil servant relating to transactions under his Ministry? And does he think that other Ministers should do the same in future when faced with a similar situation as Minister Shanmugam.

Mr Teo Chee Hean: Sir, I think this is one case where Mr Giam is obviously taking what I said out of context.

Mr Deputy Speaker: Minister Shanmugam.

Mr K Shanmugam: Deputy Speaker, Sir. Can I have Mr Giam's question again, please?

Mr Gerald Giam Yean Song: Sir, why could Minister Shanmugam not inform his Permanent Secretary separately after getting an agent to make enquiries? Because we discussed earlier that he could have asked SLA through an agent, but he chose not to. He chose to go to his Deputy Secretary instead. Why could he not go to his agent, get his agent to ask SLA a question and then inform his Permanent Secretary separately? And did he make clear to his Deputy Secretary at the time that he was asking him that he was asking for the purpose of transparency?

Mr K Shanmugam: I thought I have explained this a number of times. When an agent goes and asks SLA, SLA will ask, "Who are you asking for?" They are not just going to give it to every agent. There must be a principal identified. I did say, in my understanding, the person who is asking has got to be a credible prospect. So, who is asking? And the agent will then say, "It is Minister K Shanmugam". And as I said to Mr Dennis Tan, is that better? Or is it better to ask a much more senior officer and let him know?

As to whether I told the Deputy Secretary that this is in the interest of transparency, I think the context was clear, because he told me, if I recall correctly, that he will keep the Permanent Secretary informed. So, everybody understood – yes, this is why I am asking him, he will keep the Permanent Secretary informed, and he will get me a list and then we see how we will proceed, rather than going direct to SLA.

Mr Deputy Speaker: I see three more new hands. I will take the three hands on this theme and then also open the floor to the other theme, which Mr Xie Yao Quan had raised, which Minister Edwin Tong would like to respond to. And also, I think, Mr Leon Perera had a third supplementary question to Mr Tong. So, the three hands are Assoc Prof Jamus Lim, Mr Leong Mun Wai and then Mr Pritam Singh. And then, we will go on to a different theme.

So, if I could ask the three Members to stay on theme. Thank you.

Assoc Prof Jamus Jerome Lim (Sengkang): Thank you, Mr Deputy Speaker. So, my question in this particular theme is very much in the spirit of this question. And I understand from the report and the statements made that there were no actual or verifiable conflicts of interest in the Ridout Road transactions made by the two Ministers.

That said, Mr Deputy Speaker, I would like to hear directly from the two Ministers, Mr Shanmugam and Dr Balakrishnan, if on hindsight, whether there are specific actions that they undertook that they now believe, at the very least, could be perceived as a conflict of interest, keeping in mind that we operate as public servants and perceptions are very important for public figures. And especially since the Ministerial Code of Conduct, of course, includes this more stringent qualification.

I have a second question but I will leave it for a subsequent theme.

Mr K Shanmugam: I thank Assoc Prof Lim for this question. I think it is an important question and it is at the heart of a lot of misunderstandings, even from lawyers.

Actual conflict – I think I am glad to hear Assoc Prof Lim and others agree that there is no actual conflict. But just so that we understand what it means, actual conflict is, you have an interest and you make a decision. We all agree that was not there.

From what I hear from the Members, there was no potential conflict either because I recused myself.

Potential conflict, as I explained, arises when you have an interest and you may potentially make a decision. Members agree, from what they are saying, that there was no potential conflict, they accept the conclusions of the report on that.

The confusion arises on perceived conflict, and let me explain what is at the heart of the confusion. When you talk about conflict, what are you talking about? You are talking about someone in conflict. There is an interest on one side and there is a duty on the other side. If one of those does not exist, there is no conflict. If there is no actual conflict nor potential conflict, what does perceived conflict in this context mean?

It seems to me, in essence, the essence of Assoc Prof Lim's questions and some of the other questions, including Ms Sylvia Lim's questions, is that if others perceive you to be in conflict, therefore, you are in conflict; and therefore, you are in breach of the Ministerial code.

It does not matter that you took no part in it, it does not matter that you recused yourself, it does not matter that the matter was decided perfectly properly, as long as a member of the public or anyone else can take the view that you are in perceived conflict, you are in conflict.

You cannot run any government on that basis. Let me give you some examples. Minister for Health goes to a hospital for a knee replacement. A hypothetical example. [Laughter.] He goes to a hospital for a knee replacement. He is not in actual conflict, he is not asking them to charge him anything less; otherwise, Prime Minister will ask CPIB to look at it. He is not bringing forward his surgery ahead of others against medical advice. That could be abuse of power.

But someone can say, "You are the Minister of Health. You have a say in appointing the CEOs. You are the person who decides on the structure and in some ways, their career progress. They might treat you better than they might treat others. And therefore, you are in perceived conflict." Can a government work on this basis? That it is entirely up to a subjective viewpoint on perception, perceived conflict?

Or the Minister for Home Affairs, in a personal capacity, goes to file a Police report. Can someone say, "Well, that creates a perceived conflict of interest because you are in charge, ultimately, of the Police force and they might therefore handle the investigations differently. And therefore, that is a perception of conflict." In anything dealing with that report, the Minister must recuse himself, he must have no part to play, he must treat himself as a private citizen and the matter must be handled by others appropriate within the Police and the Ministry.

I can give you a string of examples. The Minister for Education – his son applies to a school which has some discretion whether to admit children or not. Is he in a perceived conflict of interest?

I have thought about it. The reason why we are ranked as highly as we are and the reason why this Government is not corrupt is because we take these things seriously. The Ministerial Code of Conduct does not mean you get to absurd results. It has got to have common sense, it has got to be the spirit, it has got to be the letter and it has got to be applied sensibly and properly, but rigorously.

What is the perceived conflict? Can someone explain to me? Rather than just repeating the word, what is the perceived conflict? Strip it off all these legalese that people use, in essence, what is being said is, if you are in charge of a Ministry, you must not engage in any transaction which is available to public citizens. That is, in essence, what is being said.

If that is so, that is a new principle, because some people may perceive you to be in conflict, but that is not the principle in the Code. That is my answer to Assoc Prof Lim.

Mr Deputy Speaker: Mr Leong Mun Wai. Oh, Assoc Prof Lim, do you have a clarification? Do you or do you not?

Assoc Prof Jamus Jerome Lim: I do, yes. The clarification is that for Minister Shanmugam, on hindsight, that there are no perceived conflicts of interest in his mind that he would have otherwise corrected.

Mr K Shanmugam: Sorry, Sir, I missed part of Assoc Prof Lim's question, so maybe, if you can repeat it again?

Assoc Prof Jamus Jerome Lim: Yes, it is that in your mind, there are no indeed perceived conflicts of interest, on hindsight, that you would otherwise have alternatively acted in a different way.

Mr K Shanmugam: In my mind, there was a possibility of a potential or perceived conflict of interest. I did not think there was going to be any actual conflict of interest because, as I said, rentals do not come up to the Ministry of Law. But there is a potential conflict of interest if I remain in the chain of command.

So, that was very much in my mind, which is why I went and took the step. The way this Government operates, Senior Minister Teo, previously in charge of the Civil Service, knows all about how our rules operate, and that is why I went to him and said, if this comes up, can the then-Senior Minister of State Indranee come to you?

In fact, I could have left it with then-Senior Minister of State Indranee. Our people are honourable, competent. The then-Senior Minister of State Indranee could have dealt with it herself, but I did not even want to take that chance. I wanted to make sure that there was somebody more senior than me who can have a say in the matter if it came up. So, yes, the answer is yes, it was in my mind, which is why I took the steps that I took.

Mr Deputy Speaker: Mr Leong Mun Wai.

Mr Leong Mun Wai (Non-Constituency Member): Thank you, Deputy Speaker. I have two questions, both for the Senior Minister.

Before that, what I would like to say is that I think what we are discussing today is that most of us believe in the integrity of our Government. But what we are trying to establish is that are there conflicted situations that we should avoid, going forward? Then, from this, if we agree that there are some conflicted situations, whether the outcome of the terms and conditions of the contract reflect that – or whether the terms and conditions reflect a conflicted situation or not.

We are still in the process of discussing and debating. I hope the Senior Minister will be patient that we probably cannot conclude whether there is a conflicted situation or not. But first of all, now, we are talking about whether there is a conflicted situation or not. So, I have two questions I would like to ask.

One, the Senior Minister himself said if someone has the power, over his personal interest, then it may potentially be a conflicted situation. The Minister for Law has explained that it may not be a conflicted situation, although the CEO of SLA reports directly to him. But his personal interest is affected, can be affected by the decision of the CEO of SLA, who reports to the Minister for Law.

So, indirectly, the Minister for Law, although recusing himself from the decision-making process, has power over his personal interest. What do you think about this? First question.

My second question is regards to the Code of Conduct. I think the Senior Minister mentioned just now that it should not just be the letter of the Code of Conduct but also the spirit. But we expect our Government to be a government of integrity. Do you not think that our expectations and the expectations of many Singaporeans would be, you do not touch anything that you are doubtful?

Can I ask the Senior Minister, under the current situation, do you not think the two Ministers should have considered the possibility of negative public perception? Because Singaporeans are already saying the Ministers are paid million-dollar salaries, the Ministers have private bungalows of their own and they still go and rent a relatively cheaper public bungalow, which are the three most prestigious bungalows in Singapore and having the Government fork out over a million dollars to reinstate the bungalows before they move in? Do you not think that scenario conjures up a very bad picture?

Mr Teo Chee Hean: Mr Deputy Speaker, I would like to thank Mr Leong for his emphatic belief in the integrity of our Government.

Sir, on the issue of conflict of interest, I think we have spent quite a lot of time explaining what needs to be there, for a conflict of interest to take place. And that Minister Vivian Balakrishnan is not in a conflict of interest situation; that Minister Shanmugam was in a position of potential conflict of interest and that he took steps to make sure that he removed himself from that potential conflict of interest so that no actual conflict of interest could arise or did arise.

As for the perceived conflict of interest, as I explained earlier, if one has dealt with it, that there is no actual conflict of interest, there is no potential conflict of interest, then that should be sufficient to dispel the idea of a perceived conflict of interest in any fair-minded person. That is my view.

The fact that, yes, he has some power over the appointment of, whether he assesses that the CEO of SLA performed well or not, that will always be there. You cannot remove that, but that will mean that the Prime Minister, for example, cannot do anything, because he has powers over practically every agency in Singapore!

I think one has to look at the realities of the situation, what steps people have taken and most importantly, to have confidence in the integrity of the Public Service and our public officers.

I think, in this case, our public officers showed a very high degree of integrity. For example, when the MA asked SLA is there some VVIP track, the SLA officer replied emphatically to the MA – no, there is no such thing. Every potential tenant or tenant has to be treated equally.

This is a testament to the quality of the public officers that we have. They know what integrity means and they stand by it. And so, I think we have to give credit to our public officers, that they know how to behave and they know what to do. That is a very important aspect of integrity of the Public Service.

On the Code of Conduct, I would first like to dispel another misconception which Mr Leong's question perhaps inadvertently perpetuates – that these are relatively cheap bungalows.

It is not true, Mr Leong. It is not true. And you can see the facts for yourself that it is not true and I hope that you will help to spread the word that it is not true.

The bungalows are rented out at market rates. They are valued. Eighty-three percent of them are managed by MAs, about 17% are managed by SLA, and they are all rented out at market rates. The valuations are done by the valuation department in SLA, quite distinct and separate from the leasing department, as we have explained and as we demonstrated. They are also valued by the MAs. The agents out there have a pretty good idea what they are worth.

I think we should dispel this idea completely, which I think Mr Leong must have inadvertently contributed to through his question, that these bungalows are going at a relatively cheap rate.

I think also that Mr Edwin Tong has explained why the expenditure is required to set these properties, to make them habitable and rentable. I am not a property person myself, but I do some simple arithmetic. If you have a property which is not tenanted, not in good condition and cannot be rented out, you get no rent from it. But you have to put money in to cut the grass, to make sure the building, at least, remains in some decent condition, it does not fall down and so on. It is a complete loss to SLA, if it does not put the property in a condition which is rentable.

So, when the prospect of a tenant comes up and the tenant is prepared to offer or looks like he is a credible tenant who looks like he can offer you a decent rent, then SLA says, "I will put in the money, if the potential tenant is also prepared to put in money. And then, we can talk."

The sums look large – $500,000 in round numbers, SLA says to put the building back into basic habitable condition. But many of the things that they do will last for quite a long time. For example, if the water tank is very poor condition, you replace the water tank, it will last you 10 years, at least. If you have a problem with the roof and the roof is leaking, it will last you when you replace it, do major repairs on it, it will last you at least 10 years. If you have problems with the beams and the structures because there is a lot of wood in there and you do work on it, it will last you maybe 10 years.

This is amortised over a period of time. SLA does its cost benefit analysis to see whether it is worthwhile.

So, if a tenant is prepared to pay, let us say, in round numbers, $20,000 in rent, $25,000 in rent; $20,000 in rent in the first year will bring back $240,000, $25,000 will bring back $300,000. Within the first two years, the first three years, SLA will collect back somewhere between $600,000 and $750,000 – I am getting my numbers mixed up – $500,000, $600,000, $700,000 from the rental in the first three years of rental – two to three years of rental.

After that, what they have done is still good for another six to seven years.

So, if you have a tenant who is prepared to rent it from you for 3+3 or 3+2+2, and is reliable, prepared to give you good rental, it is a worthwhile thing to do. Otherwise, SLA will have to put in money every year to maintain the land, to cut the grass, to make sure there is no mosquitoes, to make sure that this conserved property does not fall down and collapse; it is a dead loss.

Whereas by putting in that investment, they can get a return on investment over a number of years, which will then bring benefits to the state. These are the kinds of tradeoffs, cost benefit analysis that SLA does, which I think the SLA officers do know and are cognisant that they need to do things which are value-for-money, good cost benefit analysis and bring benefit to the state.

I think our public officers do have integrity and they do look after the interests of the state and all of us.

Mr Deputy Speaker: Mr Pritam Singh.

Mr Leong Mun Wai: Mr Deputy Speaker, clarification, please.

Mr Deputy Speaker: No, I have called Mr Pritam Singh, please. Thank you, Mr Leong.

Mr Pritam Singh: Mr Deputy Speaker, I think Minister Shanmugam is not in the Chamber. My question is also directed at him. Perhaps, we can move on and I can come back when Mr Shanmugam is in the Chamber.

Mr Deputy Speaker: I think Mr Xie Yao Quan's question was not answered and it was a question that it be answered later. Mr Xie, would you like to repeat your earlier questions for Mr Edwin Tong's benefit?

Mr Xie Yao Quan: Thank you, Deputy Speaker, Sir. My question, actually, that was my second point of clarification. But it was on land management. And specifically, I have asked about how much land, what is the total land area that the state-owned portfolio of black and white bungalows sit on? And how might these factor into the Government's weighing of both economic and social factors to determine how best to make use of this total land area and to manage the portfolio of black and white bungalows.

Mr Edwin Tong Chun Fai: Sir, I have spent a large part of my speech outlining precisely that. We have a variety of different properties: heritage properties, the older ones. Black and Whites is one category of them. And I have also outlined that as we manage them, as they get older in the portfolio, where possible, we try to look at other uses. I have cited a number of examples to Members in this House. And I would like to assure Mr Xie that, moving forward, we will continue to do so.

The buildings themselves, the properties, are the heritage buildings. If they are conserved, it is as a building. Sometimes, it makes sense to look at it in the context of the surrounding area, the land in which it sits on or the adjacent property. And you do not want to remove it from the adjacent property and use it for other purposes that do not cohere with the status and symbol of the heritage properties.

So, in terms of the land that is used, as I have cited in my examples, I think some of them, we have broadened it, we have mixed it up with other developments so that it is sufficiently vibrant, you make up the place and have a certain theme to it. Like we do at one-north at Rochester Commons, which I have cited.

Other times, you want to ensure that the setting is preserved. It is not just the building itself or the property but the setting in which it occurs, in which case you need more land. But yet, other occasions, I have cited Seletar where you would take the view that there is minimal heritage value, probably more to be gained by combining it, en bloc, redeveloping it, as we did in Seletar. And then, it becomes an industrial estate.

So, these are the different uses that we have done in the past. We will continue to evolve this. And I would assure Mr Xie that SLA is very innovative in not just how it plans, moving forward, but also with the partnerships that it forms with private sector to ensure that we optimise the uses – not just from a pure revenue-generation perspective, but also making sure that we look at lifestyle, social uses and in some cases, also social causes as well.

Mr Deputy Speaker: Mr Pritam Singh, the question that you want to ask previously?

Mr Pritam Singh: Mr Deputy Speaker, thank you. A number of Members have come forward and asked questions since the first questions I asked. I would like to put into context this Command Paper before the House – I beg your pardon, this Miscellaneous Paper before the House.

The fact of the matter here is I do not believe anybody is making an allegation that the Minister is corrupt, somebody is corrupt in the system. Singaporeans are not making that point. That is quite clear to me.

The issue I think we are having to deal with here is the Ministerial Code of Conduct and a specific course of action that was taken by the Minister when he instructed his Deputy Secretary to get some information. I will just share the problem with that, just over the course of the last two hours.

Senior Minister Teo says it is not a secret list. Anybody can ask for the list. Minister Shanmugam is a little bit more qualified. He says, "Credible people will get that information."

So, within that, we can see some differentiation of why to seek that information could be conceived as by some people, at least, including myself, as actually seeking information, which probably, out of a matter of prudence, would be better sought by an agent appointed by the Minister – which was the question Senior Minister did not answer in my first round of questions. Would it have been better in his perspective as the Minister reviewing this episode, for Minister Shanmugam to appoint an agent and he would still have been able to make the necessary declarations, vis-à-vis conflict with a senior civil servant and so forth. It would appear from SLA policy that the fact that the Valuer did not know who was the person that was ultimately going to rent the property, suggests that this would not have been so much of a problem.

So, I think we have not interrogated that and how the system can be improved if a situation like this comes up again.

In my view, it is much more prudent in view of the Ministerial Code of Conduct, which is onerous, to keep your official matters and your personal matters separate. There is no need to ask a senior civil servant this information when you know you can get an agent to secure the same information. I am not sure whether the Senior Minister can agree with that.

The second point I would like to rise is Minister Shanmugam spoke of an innuendo that when we ask questions about rental and the land area being increased – that somehow this is a personal attack against him. Let us be clear. Nobody is playing the man here. We are looking at the issue. And my point when I raised my first set of questions was: there is a question of political optics. When we want to rent, let us say, a landed property, an intermediate terrace house would cost less than a corner terrace or semi-detached house. Why? Because the land has utility. If you are a pet lover, you can clearly see that connection. If you have a big family like Minister Vivian, that additional land has utility.

Hence, in the minds of people, the view is, surely, there ought to be some value attached to that, notwithstanding the clarification Second Minister for Law made about how the Valuers in SLA look at it. I think that is the public perception that has raised some of these questions that have come to bear.

I just have a final point which was triggered by what Member Zhulkarnain asked. He asked about the process of the CPIB investigation. Can I just confirm with both Ministers, in the course of the investigations, were your mobile devices seized by CPIB and returned at the end of investigations?

Mr Teo Chee Hean: Mr Deputy Speaker, since we are coming towards the end of the first theme, which is whether there is wrongdoing, conflict of interest and whether there were private benefits derived by the Ministers through abuse of power, I am very happy to hear Mr Pritam Singh saying that nobody is alleging corruption.

And so, my take is that this House actually concurs that there is no wrongdoing, there is no corruption, there is no abuse of power. That is my take because that is the same conclusion that I come to, and we are at one, Mr Pritam Singh.

The issue now is one of perception of conduct, of conflict of interest. So, we agree there is no corruption, abuse of power, personal benefit and so on. The issue now is one of conflict of interest, actual conflict of interest, potential conflict of interest, perceived conflict of interest. And we have gone through this a number of times.

Before I go any further, again, if I said "anybody" can get the list, this is in the context of "anybody" who is a credible potential tenant. And that is clearly the context in which I made that comment. So, there is no air gap between what Mr Shanmugam said with regard to credible tenants and what I said. So, there is no difference in that.

On perceptions, conflict of interest, I can only repeat what I said earlier. There is potential conflict of interest. There is actual conflict of interest. Two elements must come together for these to exist. There must be a duty coming from the position which the person holds which impacts upon the second factor which is a private interest of that person. If those two come together, then, there is a potential conflict of interest.

If that person does something or exercises the powers that he has in a decision which affects his personal interests, then, that is an actual conflict of interest.

But once either one of these two is removed, then, there is no actual conflict of interest or potential conflict of interest.

And as I said, that if one explains it and looks at it properly, any fair-minded person will then say if there is no potential conflict of interest or actual conflict of interest because the potential for that has been removed, a fair-minded person will then say then the perception of a perceived conflict of interest should be dispelled. I think that is what a fair-minded person will come to.

Those are the points that I want to make. I think I will stop there and let Mr Edwin Tong respond.

Mr Deputy Speaker: Minister Shanmugam.

Mr K Shanmugam: Mr Deputy Speaker, Sir, just a short point before Minister Tong responds.

On questions and innuendos, I want to make it very clear. As I said in my Ministerial Statement earlier, I welcome questions. I think it is important that we discuss this robustly, thoroughly, fully. That is how we keep the integrity in the system. And I do not run away from any of the questions. In fact, I wanted a full in-depth investigation. And there was a full in-depth investigation.

The point about innuendos, I mean, we can go through the different questions. The main point for this House is, our conduct, the reports, what we did, what we did not do – was there anything wrong, did we benefit in any way? These are relevant questions because for this Government and Singapore, the bedrock is integrity, financial integrity. We are prepared to come up and have ourselves be questioned, answer, explain, let Singaporeans judge for themselves, what did we do.

The Leader of the Opposition has talked about optics. I think if necessary, we will talk about the optics too. But first, we want questions. We want to answer all the questions and I fear no questions.

Mr Deputy Speaker: Mr Edwin Tong.

Mr Edwin Tong Chun Fai: Thank you, Sir, I want to go back to the point that Mr Singh raised about the valuation and I think he said SLA's valuers. I was quite careful to say it is not just SLA's valuers. This is a view that is taken of the market and we have to be guided by market, market forces in how we look at this.

When we say that it is the GFA that is the main factor that determines the price and the marketability, it is not just a SLA or a policy position. It is that taken by the industry, by the market.

I pointed you to the Annex in Senior Minister Teo's report because that represents all the Black and Whites in Singapore. The majority of these Black and Whites, to be precise, 87% of them, are managed by professional MAs. Each time they do a transaction, they use their own in-house, independent valuers to make that assessment as to what the guide rent ought to be. They are not told by SLA what the guide rent should be or how to determine it, but they go back to market forces. So, this is a factor that is looked at and it has to be looked at in the context of what are the right market forces to it.

I mentioned too, in my speech, that each of these MAs, their arrangement with SLA incentivises them to maximise occupancy and drive rental. That is their key performance index (KPI). So, there is no incentive for them to try to assess a guide rent otherwise, than by market forces.

So, I hope that puts this matter to rest because it is not that GFA is the only factor, neither did I say that. Land is, of course, relevant. Location, condition and all these are factors that I think I mentioned. They are all relevant. But the main factor, when it comes to a black and white heritage property, is really the GFA.

Mr Deputy Speaker: We have concluded the first theme, which is, as I understand it —

Mr K Shanmugam: I think Sir, Mr Deputy Speaker, Sir, I think Mr Singh asked if they looked at our emails or our phones, whether they seized the phones. My phones did not have any relevant messages, because they automatically delete and the CPIB looked through it. There was no need to seize them because that is a setting on my phone. They asked for and looked at my emails.

The Minister for Foreign Affairs (Dr Vivian Balakrishnan): Mr Deputy Speaker, I have had absolutely no communication with the property agent or with SLA, so there was no need for my phone to be surrendered. However, I should add that every single message between my wife and the MA, and subsequently, with SLA staff, was in the hands of CPIB. Because you might remember, when you send a message, it is two ways. So, they had sight of every single message. It just shows you the thoroughness in which this investigation was conducted.

I assume the vast majority of you here have never had the privilege of interrogation by CPIB. Let me assure all of you, it is a most uncomfortable, invasive, intrusive, thorough process; and I do not wish it upon any of you.

Mr K Shanmugam: What Minister Vivian said has jogged my memory. While there were no messages on my phone, all the messages that I exchanged they had and, in fact, I was asked questions on some of them. Because some people keep messages for five years and those messages were taken by CPIB from others who had sent me messages. I do not know what they have. I do not know what they do not have, but I was shown some. So, I assume that messages that were sent to me, messages that I sent, which were still available; were seen by them.

Mr Deputy Speaker: You have a final point on this theme, Mr Singh?

Mr Pritam Singh: Just to confirm, it would be correct for the record to say the phones were not seized.

Mr K Shanmugam: I think what is right to confirm is that, phones were looked through and since there was no relevant material, they were given back to us in the course of that interview.

Dr Vivian Balakrishnan: My phone was not seized.

Mr Deputy Speaker: That concludes the first theme.

I think the second theme relates to maintenance, size, rental prices, essentially Minister Edwin Tong's Ministerial Statement. I understand Mr Xie Yao Quan had a question that has already been answered. I understand that Mr Leon Perera had a third question that I asked for him to postpone to this phase of the debate. I propose that we look at ending this at about 5.30 pm. So, can I ask Members to keep their clarifications short? Thank you. Mr Leon Perera.

Mr Leon Perera: Thank you, Mr Deputy Speaker. I will try and keep it very short.

For Minister Tong, firstly, the methodology of direct negotiated rental versus open bidding system. If I understand the Minister correctly, direct negotiated rental is taken in weak market conditions and that was why for 26 and 31 Ridout Road, that methodology was used up. I have seen information from some media outlets which may or may not be accurate, which is why I am putting the question here, that at the relevant time, 2018 to 2019, most of the other properties on Ridout Road were actually rented out. So, on what basis was the determination made that market conditions were weak, such that you had to resort to direct negotiated rental as opposed to an open bidding system?

The second one is really just, I am trying to reconcile what has been said in the report about how certain properties, black and white bungalows are not listed in the SPIO in a down cycle, because you do not want too much transparency which may deter bidders, they can see a lot of vacant properties – and I quoted something from The Straits Times earlier about that policy. I can understand that policy intent, but I am just struggling to reconcile that with this notion that anyone can go to SLA and just get a full listing of those properties. So, how do those two things gel together? I mean if someone can go to SLA and get a full listing properties, why are some properties not listed on the SPIO?

And lastly, if I could just, a very quick response to what Senior Minister Teo said in response to me, I was not suggesting that CPIB should not be involved and the AGO should handle it instead. I think CPIB has an important role to play to look at Prevention of Corruption Act offences, which they have done. I was suggesting that the determination of consistency of the Ministerial Code of Conduct be done by an independent organisation. It could be the AGO, it could be a judge or retired judge or someone else to put that imprimatur of independence. I was not suggesting either or. You may disagree with that, I think Senior Minister Teo probably does disagree, but that was what I was putting forward, to clarify.

Mr Teo Chee Hean: Just two points before I hand over to my colleague. First of all, exactly. I clarified that I did not say anybody. I said any credible prospect. So, it is not just anybody, but any credible prospect. And I explained that.

Secondly, this Government takes responsibility over the Code of Conduct. We do not outsource it to someone else. We believe we should take responsibility for the Code of Conduct and the conduct of our Ministers. So, we take responsibility for that. You cannot outsource this. Those are the two points I want to make.

Mr Deputy Speaker: Minister Edwin Tong.

Mr Edwin Tong Chun Fai: To Mr Perera's first question on market conditions, the market conditions are set out in, well, first, you can see the table that I circulated earlier. I think that tells you what the rental index was for URA as a whole. And in addition, specifically on Ridout Road, you will see from Senior Minister Teo's report, one of the annexes, that at the material time it was at 71%. So, I think that answers your first question.

On your second question, you said that the Black and Whites were not put on SPIO because "we do not want too much transparency". I would say, please do not put words in my mouth, or put it in my speech – this was not the case.

That is not the reason why it is not on SPIO and I think if you have heard the subsequent debate that we have had on this, on the list, properties, how it is accessed and so on, there is nothing confidential about this. There is no secret list of properties that only certain people can rent.

Go back to first principles. SLA is the landlord and I told you in my speech that we want to maximise occupancy. We want these properties to be rented.

What is the best way in which they can be rented? In an up market, you want to make sure that it is as exposed as possible because there is more demand than there is supply. In a down market, it is the contrary. But not for lack of transparency reasons, as you try to suggest. It is because you do not want to have yourselves have each property bid against itself, to have more supply than demand exhibited on all the portals.

So, what is being done in those situations is for some properties, at the discretion of the managing agents to be listed on the SPIO. Other properties might well find their way on other property portals like Property Guru and so on. The managing agent and each of their real estate agents in their network would in fact, have the full list of all the assets that are available for renting. All the Black and Whites, in this case, available for renting would be something known by the MA and they would want that advertised as much as they can through their networks.

So, the purpose of not listing it on SPIO is not for transparency reasons, Mr Perera. It is to ensure that the right strategy is adopted to ensure that we market it in the right way, that coheres with the dynamics and movements of the market at the relevant time.

Mr Deputy Speaker: Mr Murali Pillai.

Mr Murali Pillai (Bukit Batok): Mr Deputy Speaker, Sir, I have two questions. The first is to hon Senior Minister Teo. Given the fact that he was installed as the head of the chain of command in relation to the dealings pertaining to 26 Ridout Road, now that we have established the facts, if you were to turn the clock back, are there any facts that you would have expected to be raised to your attention? I am not seeking an elaborate answer, a brief answer on that would suffice.

My next question is to the hon Minister Shanmugam. Given the sheer size of the property at 26 Ridout Road, there have been some comments in the public about whether Ministers living in such private properties have a connection with the people and would be able to relate to the people; and also whether such acts engender a picture of inequality in Singapore. I wonder whether the hon Minister has a response to that.

Mr Teo Chee Hean: On Mr Murali's first question, I think that the Ministers, and Minister Shanmugam in this particular case, handled himself and recused himself properly. So, I have no difficulty with what he did.

Mr K Shanmugam: Mr Pillai has asked two questions. One about inequality and the other about empathy. I think it goes back to the point that Mr Singh referred to as optics as well. It is tied to that.

With your leave, Sir, I would like to take some time in answering this question because this is quite important. So, I seek your indulgence.

Mr Deputy Speaker: Yes, we can go past 5.30 pm if needed. Not for your response, I mean for this debate. [Laughter.] Well, these clarifications rather. There is no debate. Please proceed, Minister.

Mr K Shanmugam: It might take a fair bit of time, but anyway. Sir, I mean I understand the question. Many Singaporeans face challenges in today's economic climate. Rising prices for many things, high inflation. So, inequality is one of the biggest issues we are grappling with not just here in Singapore, but the world over. How we deal with it and the values that inform our approach are important.

I often speak about inequality when I speak outside to audiences because it is a critical issue for Singapore and also because it is seared into me, because I have gone through it myself, seen it first-hand. So, it is not just an academic exercise for me. I grew up in rental housing. I stayed in Bukit Ho Swee as a young boy. Then, as a teenager, I lived in a 3-room flat in Block 3 Ghim Moh. I still remember the address.

About 20 years later, as a senior counsel, I owned a Good Class Bungalow (GCB) in Astrid Hill and, prior to that, I owned a house in Oei Tiong Ham Park, also very nearby, though I never lived in that house.

The distance between Block 3 Ghim Moh and Astrid is only about one kilometre. It is a short walking distance. But the psychological and financial distance within Ghim Moh and Astrid or Oei Tiong Ham is oceans-wide. As an undergraduate when I lived in Ghim Moh, I used to cross the old Bukit Timah Railway Line, walk up East Essex Lane to the bus stop along Holland Road, to take a bus to Law School.

Twenty years later, I would drive along Holland Road. At the same bus stop, instead of walking up the left, I made a right turn into Coronation Road West to go into Queen Astrid Park, to go to my house there.

I think a lot about inequality and the gap, not least because I have straddled the gap and have lived at both extremes – rental and GCB.

So, for my part, the circumstances that I grew up with are seared into me. And when you have gone through the experiences I have, you will never forget them, regardless of how successful you become.

So, how should you deal with inequality? You do not deal with inequality by preventing poor kids from doing well. Mr Lee Kuan Yew set up a system that allowed a poor Indian kid to become a successful lawyer, to do well. You tackle inequality by providing for social mobility, by helping people to move up. You do this, for example, by providing good support, opportunities, help everyone to move up and redistributing income from those who have succeeded to the poor or less well-off through taxes.

You can tax the rich more and redistribute while making sure to keep the system fair. If you tax too much, the wealthy will leave. If you do not tax enough, it would not be a fair system. So, you have to get it just right and, in Singapore, the top 10% of personal income taxpayers account for, I believe, 80% of our total personal income tax revenue, and those at the lower 20% receive about $4 in benefits for every tax dollar they pay.

So, in Singapore, those who are wealthier must understand Singapore is a small place, we sink or swim together, and they need to contribute, pay more taxes. We have to make sure that those who are less well-off are properly taken care of and there is social mobility and opportunity.

Personally, based just on the two, three years' income, between 2005 and 2007, before I became a Minister, I probably paid more than $2 million in taxes and, rightfully so. A famous American jurist, Oliver Wendell Holmes, once said, "Taxes are the price we pay for civilization". In my case, all I have, I got from Singapore. It is only right for me to give back.

Dealing with inequality is always a work-in-progress and how can we continue to find ways to bring about greater equality? We must encourage those who have more, who have achieved more, to come forward and contribute their time and talent and resources to help make a stronger society. We need people to step forward, help fellow Singaporeans, including in Public Service.

So, if you look at Mr Lee's approach, since the start, he brought in people who were doing well outside and those who had the heart to serve. Some were independently very wealthy, but he persuaded them to give up their careers in the private sector to come in to serve Singapore. They, together with Mr Lee, did more than most to make Singapore a more equal society.

Of course, if there are other good workable suggestions on how we can do better, that will be good, but we should not penalise people who do well.

Sir, on Mr Pillai's second question on empathy, if you live in such a place, how can you have empathy? I just spoke about Mr Lee's approach. Whether you should serve or not should depend on your heart: do you want to help serve, make lives of Singaporeans better? Mr Lee brought in people as Ministers and Members of Parliament regardless of their background and it did not matter if they were rich or poor, from trade unionists like Mr Mahmud Awang from the Singapore Traction Company Employees Union, Mr Ho See Beng from the Printers Union to highly successful businessmen and professionals, like Mr Lim Kim San and Mr E W Barker.

For example, Mr Lim Kim San, he was a shrewd successful businessman when Mr Lee brought him into Public Service. Mr Lee said he helped change the fortunes of Singapore as HDB Chairman. He then served as Minister in various Ministries, including Finance, Defence, National Development where he was also responsible for building HDB flats. He lived in a very large bungalow at Dalvey Road. Staying there and his wealth did not prevent him from feeling the plight of Singaporeans who had no homes to live in and doing his utmost to solve their problems by building HDB homes for them.

Others, too. Mr Barker was the Minister who drafted the Separation Agreement. He stayed in Queen Astrid Park. Should Mr Lee have said to him, "Eddie, you're a successful lawyer living in Queen Astrid Park. You can't serve Singapore?"

Dr Goh Keng Swee stayed in a very large black and white bungalow at Goodwood Hill. He was Deputy Prime Minister, key architect of modern Singapore – economy, defence, education, across the board.

Mr Hon Sui Sen – he served as Finance Minister; Chairman, Economic Development Board (EDB), President of Development Bank of Singapore (DBS). He also rented a black and white at Malcolm Road.

Or I should add, at that time, it was among the benefits that senior officials could rent houses reserved for them.

When we moved to a clean wage policy, these black and whites and other state-owned properties were made available to anyone and the rentals were determined by the market. But they remain the same type of black and white houses that Minister Vivian and I are staying in, not any more prestigious or less prestigious then or now and some, of course, quite rundown, as compared to modern GCBs. So, it becomes a matter of personal preference.

I should add I am not in any way seeking to compare myself or other current Ministers with the Ministers I have mentioned. The point I am making is, a person's ability to serve should not depend on where he lives or how poor or rich he is.

And what about myself? I do not believe the homes I lived in have affected my ability to serve and empathise. I was doing well in my career as a lawyer while I was serving as a backbench Member of Parliament for more than 20 years before I became a Minister.

As I explained, this was how I was able to buy my family home and pay the rental for 26 Ridout Road. I became a Member of Parliament in September 1988 when I was 29. At that time, I was a few months away from becoming a partner. I knew it would be very challenging to manage my career and be a Member of Parliament at the same time. But I agreed to stand for elections in 1988, become a Member of Parliament and do what I can to make Singapore a better place.

Every hardworking Member of Parliament will know that the requirements of being a Member of Parliament in terms of time, energy are considerable.

From the beginning of my journey as a Member of Parliament, I found it demanding but I also found it inspiring. Demanding because my legal career required my full attention. But it was inspiring because I was doing what I could to forge a community in Chong Pang. I enjoyed interacting with my residents. I drew meaning and purpose from serving my residents.

When I came into politics in 1988, most Chong Pang residents were generally less well-off. Many were like my parents, who had to work tirelessly to provide the best for their children. They are good hard-working people. They want a better life. They want their children to do better, and I want to be there to help them to do so. So, although it was challenging to juggle between being a Member of Parliament and my legal career, I carried on.

Then, in 2008, I was asked by the Prime Minister to become a Minister because Prof Jayakumar who had been Minister for Law for 20 years by then, was stepping down. I was 48, at the peak of my career. It would have been much easier for me to continue being a full-time lawyer than to join Cabinet. I did also seriously think about the cutback in income. It was going to be very significant. I had to assess what it would mean for me, my family, and assess that against what I could contribute by serving Singaporeans as a Minister.

I asked myself, "on my last day on earth" – this is a question I ask frequently when I reflect back on my life – what would I have wanted to have done with my life? Spend all my time making more money? Or also spend some time doing some good work for the community and others and perhaps some good for the country?

Many things that people spend time on will not seem worthwhile to have done in the rear view mirror when your life is about to end. So, having twice or three times more money would not make me twice or three times more happy or fulfilled.

So, I accepted the Prime Minister's invitation, agreed to enter full-time politics as a Minister. It was and continues to be an honour and a privilege to serve Singaporeans and Singapore.

As I said, all I have, I got from Singapore. It was Singapore's system, the system that Mr Lee Kuan Yew and Dr Goh Keng Swee and their team set up to provide stability, good standards of living, good schools and opportunities that allowed me and so many others to achieve what we have, despite where we started, and in spite of race, language or religion. So, I was fortunate to have been born in Singapore and I want to help make policies to make sure other Singaporeans have the opportunities that I did.

Please do not misunderstand. I am not suggesting that I made a special sacrifice in taking a pay cut or moving from my family home. It was not a sacrifice. It is a privilege, a privilege to serve Singapore, Singaporeans.

I have done this now for 35 years – 20 years as a backbencher and 15 years as a Minister. I have spent more than half my life in Parliament and more than half my life with Chong Pang.

I do not hide what I earned as a lawyer. It is public knowledge.

My residents judge me by my heart and my commitment to serve, not by how much I earn and where I live. They know I am there for them. That I am there to help.

I have lived in an HDB flat – a rental flat, 3-room flat, 5-room flat – condominium, semi-detached, bungalows, GCBs, before I moved to 26 Ridout Road. My empathy did not increasingly decrease as my houses got larger, or as I made more money.

Over the years, no one raised any issue of my empathy or my ability to serve, in the 10 years I was living in my GCB at Astrid Hill. Is the empathy affected? Does it get more affected when you move from a GCB that you own to a black and white that you rent? Is that the way we are going to judge politicians?

I hope Members will seek to make Singaporeans and everyone understand what is involved because we should not start judging people on the basis of where they live or how successful they were in the private sector and then say, "You are too successful, you cannot come in to serve".

I think that will be a wrong principle and it is contrary to everything that made Singapore successful in the first generation.

So, over the years I have seen generations of Chong Pong residents. Some have moved out into bigger residences, some have received scholarships to study overseas, some have moved back to stay in new developments in Nee Soon so that they could be near to take care of their ageing parents.

These are gratifying reminders that our system works well. We have good social infrastructure to uplift those who can excel, support the vulnerable, make every town a caring and liveable home.

It has been a deeply fulfilling journey for me these 35 years. The heart is the same, the commitment is the same from the time when I started when I was 29. And I do not think where I stay or stayed has affected whether I have been able to serve.

And now, I have chosen to live in a bungalow in Ridout Road. As I said, the money that I made in my previous job as a lawyer is essentially paying for the rental. It does not change my empathy any bit from when I was living in the GCB or the previous houses.

Sir, in summary, in answer to the clarification question, I was doing well in my profession. I was asked to come forward and serve. I could have said no and carried on with my legal career. But I felt that if the Prime Minister wanted me on his team, I had something to contribute, I could make a bigger contribution to Singapore in that way. So, I did.

It is for others to decide if I have measured up as a Minister. But in good conscience, I can say, I have put my heart and soul into it and carried out my duties to the best of my ability. [Applause.]

Mr Deputy Speaker: Assoc Prof Jamus Lim.

Assoc Prof Jamus Jerome Lim: Thank you, Deputy Speaker. Two clarifications about the land implications.

I understand that from Minister Tong that what is being priced in terms of square foot of built-up area is in fact consistent with market pricing as well as SLA's practice. That said, I believe that what many Singaporeans are concerned about is this notion that when you speak of the market, there is one type of market, one class of rentals for heritage buildings with bundled land where the market valuation for land is different, and there is another market, a market where if you live in the HDB, then it is land pricing, where otherwise you would be raiding the reserves.

So, I am wondering if, in light of this, he wishes to comment if the SLA's anomalous approach to valuing land for black and white bungalows, if he would accept that at least there are different methodologies for the pricing of land, and if so, then will the Chief Valuer accept the possibility of differential land pricing as well for HDB?

My second question has to do with the $172,000 amount that was amortised to $2,000 – this is a little bit technical – for 26 Ridout Road. Based on my calculations, what I found was that that would amount to, assuming a reasonable rate of interest, something in the order of $3,000 to $4,000, rather than $2,000. So, I am wondering if some clarification could be offered on that front.

Mr Edwin Tong Chun Fai: I keep making this point about the market and maybe I will say that again.

You have got to look at the market. I mentioned in my speech that we look at comparables. You cannot take a HDB and try and say what is the value of a black and white property for rental, based on the same principles; just as you cannot take a terrace house or a condominium and apply that as a comparable to what you do when you want to value for rental and find the right valuation for a black and white property, as we see here.

It has got to be comparable in a sense that the land size, age of the property, condition of the property, you look at the comparables and then maybe you make adjustments for outliers and for the specific condition and location of this particular property.

That has been the methodology that has been used. I took some care to explain it, but now you, along with others, question that again; and now you use the word "anomalous". It is not anomalous. It is market practice.

The tables that I keep going back to – I would encourage you to please have a look at them – tell you that right across Singapore, across all different locations, where black and white bungalows can be found, for which 87% of them are managed by external professional MAs who have their own valuation teams, they assess based on market price and market methodology.

Your point about looking at a raid on reserves, which you make it obviously to try and make the point that there is a distinction and that you are trying to second guess that distinction and perhaps suggest that there is some inequality and perhaps unfair treatment. But the Member will know that you got to look at it as a different comparable.

First of all, when you are valuing land for the purposes of HDB, you are looking at the question of selling HDB property with a leasehold interest of 99 years. It is a very different proposition from valuing the appropriate rental to be collected from a heritage black and white property like this.

Yes, there are different parameters, different baskets, but that is because the intrinsic nature of the property in question calls for this difference.

Your second question, could you please repeat it?

Assoc Prof Jamus Jerome Lim: Thank you. My second question has to do with – there was a land clearance cost of $172,000 . And I believe that was amortised to something in the order of $2,000 a month. At least based on my independent calculations for the extended rental period of four years, it comes up to something closer to $4,000, rather than $2,000. So, I am wondering what kind of assumptions SLA applied.

Mr Edwin Tong Chun Fai: Can I ask the Member what do you mean by four years?

Assoc Prof Jamus Jerome Lim: As far as I understand it, the rental was extended by a 3+2 and the time that the land clearance was implemented —

Mr Edwin Tong Chun Fai: I think you might have confused the facts, Mr Lim. The rental at 26 Ridout Road was granted on the basis of a 3+3+3. So, what was done was to take the land cost and amortise it with an imputed interest across a nine-year period. That is where you get to $2,000. I hope that clarifies. It is not four years.

Mr Deputy Speaker: Mr Leong Mun Wai.

Mr Leong Mun Wai: Deputy Speaker, I would like to ask Minister Edwin Tong the following two questions.

Firstly, can he give us examples of black and white bungalow tenants whom SLA had offered the following terms: preparatory work before they move into the unit where SLA spent hundreds over thousands on the tenant before he moved into the unit?

In the case of 26 and 31 Ridout Road, the amount spent for preparatory works amounted to 2.2 years of their rental respectively. Is this the kind of term SLA will give to other tenants?

Secondly, allow the tenant to construct a swimming pool. Do they do that all the time?

Thirdly, cut down trees that are with girth that is more than a metre and at the same time, offer some help in applying to cut the trees?

And then, in the case of 26 Ridout Road, they were given the additional land. Although the Ministers have explained that this land is actually of no value, but I think it is very difficult to convince Singaporeans who are so obsessed with land.

Senior Minister Teo quoted the example of Dalvey Estate, that the Dalvey Estate's tenant was willing to let SLA take back the land and reduce the size of his unit. So, why, in the case of 26 Ridout Road, did SLA actually impose $2,000 more on the rental for the extra land? The logic still does not really settle in very well. Does the SLA offer this kind of deal to other tenants?

Finally, in the case of 31 Ridout Road, the initial rent was actually 22% below the average rent shown to us by this table. It is from the table, Chart 2, Senior Minister Teo. The average rent is $29.60, 31 Ridout Road is $23.05, so, that is a 22% discount. On top of that, you are spending $570,000 to upgrade 31 Ridout Road. So, what is the justification?

And then you still charge at a 22% discount to the market. Is this the kind of deal that SLA gives to other people?

There are still a lot more questions that I am going to ask. Deputy Speaker, I think the debate is not going to end at 5.45 pm. Thank you.

Mr Deputy Speaker: Mr Leong, I think the Chair decides at what time the clarifications end. In fact, this is not a debate.

Mr Leong Mun Wai: Point of order, Sir. This is an important issue. All Singaporeans are watching this debate.

Mr Deputy Speaker: Mr Leong, I do not disagree with you that this is a matter of public importance.

Mr Leong Mun Wai: Yes.

Mr Deputy Speaker: And in fact, Standing Order No 23 makes specific reference that Ministerial Statements be made on matters of public importance.

Mr Leong Mun Wai: Yes.

Mr Deputy Speaker: But the second sentence in Standing Order No 23 also states that shall be no debate. Clarifications can be asked. So, there is no debate, whether under Standing Order No 23 or Standing Order No 25, which is a Personal Explanation. So, the Chair will decide when clarifications end.

Mr Leong Mun Wai: Yes, what I urge the Chair, Deputy Speaker, Sir, is to be mindful that the topic has not been properly, completely clarified. When it is not completely clarified, please do not end the session.

Mr Deputy Speaker: Mr Leong, I think, the response to you is – Mr Leong, I invite you to kindly take your seat – we have had four Ministerial Statements from 12.30 pm. It is now 5.30 pm. That is what five hours worth of to-ing and fro-ing. I think the House has ventilated a lot of issues. I will allow about three or four more clarifications from Members, and then we will proceed to end the Ministerial Statements.

It is not for a Member to dictate to the Chair when a business should end or start. I hope you can agree with me on that. Do we have agreement on that, Mr Leong? Thank you.

Do we have agreement on that, Mr Leong?

Mr Leong Mun Wai: That is it not for me to decide, yes.

Mr Deputy Speaker: Yes, thank you. Mr Tong.

Mr Edwin Tong Chun Fai: Thank you, Sir. Sir, the preparatory works that Mr Leong speaks about, I thought I did spend a fair bit of my speech explaining it but let me just recap.

These are conservation properties and so there is a need to upkeep them, maintain them, based on conservation guidelines. There is a requirement on SLA as the owner and landlord of these properties to ensure that not just are they managed from a tenantability perspective but also that we meet, cohere with, match up to conservation guidelines in how we maintain the property.

Let us be clear. These obligations to maintain them based on conservation guidelines are on SLA – whether there is a tenant or otherwise. So, these are expenditures that have to be incurred to maintain the property.

I spent some time detailing some of the elements that we have to take into account when we maintain the property and that is irrespective of whether there is a tenant.

But we try to do it at a time when there is going to be a confirmed tenancy so that the income stream received from the monthly rentals can go towards paying off the cost of the maintenance. And that is what happened in this case, both 26 and 31 Ridout Road. And Mr Leong will be aware that we have had several examples of this talked about in the media a few days ago. Those are all examples of properties, heritage properties where significant expenditure was needed for the reasons I have outlined – I would not go into it again – and which we had done over and above what you have seen in 26 and 31 Ridout Road.

In terms of the period of time at which – number of months or years that it takes to recover back, as I said, the starting point is even if there is no tenant, you would still have to incur these expenses to upkeep, to maintain. The amount of time we take to recover, this is a factor to assess and judge whether we should proceed with this particular set of works at this time or otherwise, or maybe we can scale down or scale back if there is no tenant. But otherwise, it is taken in the round and assessed together.

And if you take Ridout Road as an example, 2.2 years as Mr Leong has said, I think it is slightly less than that. But I will take the Member's 2.2 years. You have a tenant coming in, prepared to put in enhancements like the swimming pool which, by the way, we encouraged, I think the Member heard me say earlier, we encouraged. One of the ways in which SLA has been thinking of restructuring its tenancy framework is to try to encourage tenants to come in and put in capital expenditure (capex), so that these properties can both be maintained as well as enhanced for subsequent purposes. So, if a pool is there, put in at the cost of the tenant, at the expiry of the lease, that pool becomes the property of SLA. And that goes towards enhancing the value of the property for subsequent tenancies. So, in fact, we encourage that.

And so, when we do that, we look at the amount of time it takes for the recovery versus the improvements that this tenant is offering. This tenant is offering to come in with $400,000 to $500,000 worth of improvements, asking for 3+3+3 years, what is a reasonable commercial landlord going to do in that situation in the context of the market that you have seen? I think I have sent round the chart. So, you can see that. And, earlier on, to Mr Perera's question, it is a 71% occupancy at that point of time.

So, these are factors that we take into consideration and we assess based on each individual tenant. What are you offering? How are you enhancing? What do we have to do in terms of the works which we have to incur anyway? How can you bring it all together and ensure that we can maximise the returns?

The Member mentioned the trees. The trees, look, if they are decayed, there is a report that the arborist puts up. I think the Member used the words, "Why do we still go and help to take care of the trees?" Well, we are the landlord. We own the property. And in the event that the tenant does not want to take ownership of the maintenance, then that falls on SLA. So, of course, we will be involved. Of course, we will be interested. If a tree falls on a neighbouring property, that is SLA's responsibility.

So, we take care to ensure that if the trees are found to be posing a safety concern, then we must work with the arborist, work with NParks, get the approval and then get them removed. Those are where the girth is a metre or more.

On the Member's last point, I am not sure I can comprehend what he is trying to ask me. It has got to do with 26 Ridout Road as far as I could figure out.

Mr Leong Mun Wai: No, 31 Ridout Road.

Mr Edwin Tong Chun Fai: 31 Ridout Road? Sorry, 31 Ridout Road about the discount and so on to the average. But Mr Leong, the guide rent for 31 Ridout Road is determined on the market methodologies that I have outlined earlier. They were, in fact, determined, in this case, by a managing agent and the valuer and they cohere with what the guide rent is and the offer is not below the guide rent which, by the way, is a key consideration for SLA.

And so, it is not below the guide rent. And when you compare it against the average, the way average works, you will have some above and some below. But is it within the guide rent? It is. And that is why SLA accepted the offer. I hope that clarifies the Member's four points.

Mr Deputy Speaker: Ms Denise Phua. Mr Leong, do not worry. I will come back to you. Ms Denise Phua.

Ms Denise Phua Lay Peng (Jalan Besar): Thank you, Sir. I appreciate that the Ridout Road review by Senior Minister Teo and by agencies, such as CPIB, was made at the request of Prime Minister Lee. And I also appreciate the fact that the request for full investigation was also made by Minister Shanmugam and Minister Vivian themselves to clarify that the rental transactions are above board.

Since some of the Parliamentary Questions were actually directed at the Prime Minister and since the matter involves key members of the Prime Minister's Cabinet, I would like to seek Prime Minister Lee's views on the matter so far and also if he could share his views in the House.

Mr Deputy Speaker: Prime Minister.

The Prime Minister (Mr Lee Hsien Loong): Mr Deputy Speaker, Sir, I am responding to Ms Denise Phua's question to give my take on this Ridout Road issue, which we have been debating now, five hours.

I think the focus of the debate has been on values: integrity, propriety, incorruptibility.

Ministers in Singapore are paid a clean wage – realistic, competitive but clean wage. They do not get perks. There is no official house to live in. You get a salary. It is for you to judge what you need it for for your lives: save it, give it away, spend, it put in a house, travel, whatever.

Therefore, where Ministers decide to live, whether they want to rent, whether they want to buy, these are personal choices. And thus, I see nothing wrong with Ministers renting properties from SLA or for that matter from a private landlord, provided it is properly done and all procedures are followed.

Therefore, when I heard that two of my Ministers, Shanmugam and Vivian Balakrishnan, had rented black and white bungalows at Ridout Road, my assessment, without going into it in depth, was that I did not believe there was wrongdoing involved. I had every confidence that my Ministers and the SLA officials who dealt with them would have done the right things and handled the rentals properly.

However, after SLA's statement on 12 May, the issue continued to attract public interest. And so, when the two Ministers asked me to conduct an investigation, independent of their Ministries, I decided that notwithstanding my confidence in them and in the system, it would be best for me to task CPIB to conduct a formal investigation and to establish definitively if there was any corruption or wrongdoing.

Why CPIB? Because CPIB is independent. It has built up a strong reputation as an anti-corruption outfit and it has the necessary legal powers guaranteed in the Constitution to carry out a further investigation. Everybody in Singapore knows what it means when CPIB invites you to "lim kopi". And they can invite anybody: Ministers, officials, businessmen, ordinary Singaporeans – whoever it is necessary for them to interview in order to establish the facts and the truth and whether there is culpability. I tasked CPIB to look into this on 17 May. I was then in Nairobi, on an official visit to Kenya.

CPIB's investigation went beyond the legal question of whether there was criminal conduct. It extended to broader issues like whether there was preferential treatment enjoyed by the Ministers, whether any privilege information was disclosed to them, whether the Ministers had abused their position in the process of the rentals.

But I wanted these broader questions examined more thoroughly because as Prime Minister, my duty is not just to be satisfied that legally, there was no wrongdoing, but whether, quite apart from the law, there was any other kind of misconduct or impropriety. Therefore, after I returned from Africa on 22 May, COVID-19 notwithstanding, I tasked Senior Minister Teo Chee Hean to do a broader review of SLA's policies and processes to complement CPIB's investigation.

Senior Minister Teo is my most Senior Minister in terms of years in Cabinet and experience. I appointed him to show that I had every intention to maintain the Government and the PAP's long-standing high and stringent standards of integrity and propriety. I wanted to put my most experienced, most qualified, for this purpose, most capable person on the job. I did not consider Senior Minister Teo to have been involved in the transaction, even though Minister Shanmugam had informed Senior Minister Teo of the arrangements he had made to recuse himself, including that then-Senior Minister of State Indranee Rajah had been told to approach Senior Minister Teo if the matter had to go beyond her. Because no such issue arose and nothing was ever raised to Senior Minister Teo. He was the backstop – and nothing reached him.

It has been suggested, including today by some Members that even though Senior Minister Teo might not have been involved in the Ridout Road transactions, just because he is a Minister, he is not sufficiently independent to conduct this investigation. I take a different view.

When it comes to corruption and wrongdoing, crimes, we have an independent process as CPIB investigation and referral to the Attorney-General's Chambers for an opinion. We are dealing with laws, with legality, and ultimately, the Courts are the arbiter of what is legal or illegal.

But ethics and standards of propriety, those are the Prime Minister's responsibility. I have to set the standards of what is ethical, what is proper. I cannot outsource them. For example, to appoint an ethics advisor to tell me what is proper or not proper. I have to know what is proper or not. Otherwise, I should not be here.

An ethics advisor cannot be the one to decide and to advise the Prime Minister whether Ministers acted with the propriety or not. Some countries have tried this. You have read about some of them in the newspapers over the last few months. It has not always resulted in more ethical conduct or better government.

In Singapore's context, the Prime Minister has to set the standards. He issues the Rules of Prudence to PAP Members after every General Election. I have done it now, I think, four times. He has to set the right personal example of proper conduct. He decides whether a Minister has acted properly or not in accordance with a code and the rules. If he thinks so, he should say so; if he thinks not, he must say not. He cannot say, "I have no view. I do not wish to influence my Ministers and my Members of Parliament."

Ultimately, the Prime Minister is still accountable and he has to justify his position here to Parliament and answer to Singaporeans at the ballot box. That is how our system works. That is how it has been kept clean. That is my general approach and the attitude that I have taken in this case.

When CPIB and Senior Minister Teo submitted their reports to me, I accepted all their conclusions and ordered the reports to be published and placed before the House, before this meeting today so that everybody can read them, digest them and be ready to come here and have an informed discussion. These reports provide a good basis for Parliament to discuss the issue.

The conclusions are quite clear, as the Ministerial Statements you heard earlier have explained, from Senior Minister Teo and Minister Edwin Tong. CPIB found no corruption or wrongdoing, no preferential treatment, no disclosure of privileged information, no abuse of position for personal gain. The AGC confirmed this after reviewing the investigation papers. And the Leader of the Opposition paid CPIB and paid the Government a compliment just now when he said nobody is suggesting corruption on the part of the Ministers.

CPIB did find an imprecision in how SLA defined the guide rent for 26 Ridout Road. Their report explained this and CPIB established that this imprecision was not due to any ill-intent on the part of the SLA officers, nor was there any evidence of any mala fide abuse of position in the valuation.

The imprecision is embarrassing to SLA and the Government, particularly as the SLA has put out a statement earlier to say that the Ministers both paid higher than the guide rents. But that cannot be helped. CPIB calls it as it is with no regard to whom it might convenience or embarrass. SLA has acknowledged that CPIB's interpretation is a correct one, and they will review their practices and improve upon them.

Senior Minister Teo's review relying on CPIB's findings confirm the broader issues that there was no conflict of interest or unfair advantage enjoyed and that all rules and procedures have been complied with. And his report sets out the basis for his conclusions. These are not just his personal opinions, but conclusions based on documented facts, verified and laid out in the report.

So, it is very important that we have had this accounting in Parliament. Members have had full opportunity to ask questions and clarify doubts. The Ministers, Minister Shanmugam and Minister Vivian Balakrishnan, have done nothing wrong and they retain my full confidence.

But this accounting in Parliament is not just to resolve the issue of the rentals on two black and white properties in Ridout Road, important as that is. It is also a demonstration of how the PAP is determined to uphold the standards which it has set itself from the beginning in 1959. This Government has not and will never tolerate any compromise or departure from the stringent standards of honesty, integrity and incorruptibility that Singaporeans expect of us.

In this case, we have investigated it, the Ministers have been cleared. In other cases which come up, we will investigate it and whichever way the facts fall out, they will be taken to their logical conclusion. This is the foundation not just for the people's trust in the PAP Government, but for the integrity and good functioning of our political system. And this is my commitment and the PAP Government's unwavering commitment to Singaporeans. [Applause.]

Mr Deputy Speaker: Mr Pritam Singh.

Mr Pritam Singh: Thank you, Mr Deputy Speaker. Just a question for the Prime Minister with regard to the scope of the CPIB investigation. Was CPIB tasked to look into the Code of Conduct for the Ministers and whether the Ministers acted in accordance to the code, because the earlier explanation of the Prime Minister suggested that CPIB looked into the whole range of issues beyond legal issues. My understanding from the Miscellaneous Paper was CPIB was looking to see whether a criminal or corruption offence could be disclosed.

Mr Lee Hsien Loong: CPIB's instructions from me were to establish whether any corruption or criminal offence had been committed, criminal wrongdoing had been committed. You cannot do that without going into all the facts of the case and in the process of going to the facts of the case, they came to conclusions on preferential treatment, on disclosure of privileged information, on abuse of position. And they put it into their report and in their letter to me, that they had found none of this. They went into it.

And I think these are issues which are relevant to whether the Ministers complied with the Code of Conduct or not. So, I did not ask them to investigate the conduct, but they came to these conclusions and because their main focus had been the more narrow one of the legal question of criminal offence, therefore, I complemented the CPIB investigation with Senior Minister Teo's review, and he rode on what the CPIB did. He did further fact-finding and establishment of the policies and of the backgrounds and of the overall way the system operated and SLA operated, and his conclusions are in the report. And they are consistent.

Mr Deputy Speaker: Mr Singh.

Mr Pritam Singh: Thank you, Mr Deputy Speaker, I appreciate you calling me again. Prime Minister, thank you for that reply. Coming back to the gravamen of what a lot of the discussion was over the last at least three and a half hours – with regard to asking a civil servant for information – Senior Minister Teo has made his point, that there was quite frankly nothing untoward about it because the nature of the information was as such. This of course, upon reading the Miscellaneous Paper, is not apparent to the public.

It is quite incongruous in the eyes of many for a Minister to be asking a civil servant details which pertain to information for his personal use. I think this is the crux of the issue and when people intersect it with the Ministerial Code of Conduct and your Letter of Prudence, does the Prime Minister not agree that actually there is, this is an issue that has been flagged out and that there is a better way to address a problem of a similar nature when it crops up.

Mr Lee Hsien Loong: Mr Deputy Speaker, I think if you remember the history of this issue, the question of the Minister instructing the civil servant was not public knowledge until we brought it out. The issue has been there since I do not know, April? Over a few months? And the outrageous allegations were being made that the Ministers had enjoyed improper benefits and inside tracks and were getting a sweet deal, and all sorts of very grave innuendos were being stated. Nobody cared how he found out about the properties.

Now that the report has come out and all those grave suspicions have been dispelled, you focus on this question and you ask should he have asked the Deputy Secretary. My view is he could have done it a different way, he could have done it this way. He has given the House the reasons why he did it this way. I think those are cogent reasons, which I accept.

Mr Deputy Speaker: Mr Murali Pillai.

Mr Murali Pillai: Mr Deputy Speaker, Sir, on a point of information, in relation to the hon Leader of Opposition's query as to whether CPIB looked at the Minister's Code of Conduct, I just would like to offer that in any corruption investigation, to establish corrupt intent one looks at what are the guiding principles. A Code of Conduct would be very relevant to establish corrupt intent. In fact, there is a two-point rule that has been established at law. One is whether there has been a breach of Code of Conduct; and secondly, whether there is guilty knowledge that is associated with the action.

Mr Deputy Speaker: Mr Edward Chia.

Mr Edward Chia Bing Hui (Holland-Bukit Timah): Thank you, Deputy Speaker. I just like to turn it back to a policy, to Minister Edwin Tong, and to ask if the existing policy on guide rent at the onset and upon renewal, takes into consideration additional structures, like swimming pools and car porch? Because it brings additional utility; not just per se a GFA but additional utility. And in what way does this also differ from commercial properties?

Mr Edwin Tong Chun Fai: As I mentioned earlier, if you are a tenant, we encourage the tenants to come and improve the facilities and make enhancements to the property. So, all of these eventually, when it comes to a fresh tenancy, will be taken into account.

One of the rules that SLA internally looks at and has in mind is, if it is the same tenant who made the investments renewing it at the second "+3" and the third "+3", then you would take it all in the round. You would consider this but you also consider the fact that this is the very tenant who put in the capex in the first place to bring about those enhancements. Because if you did not do that and you simply at every renewal, in the 3+3+3, charged a higher rental because of what he has done, then no tenant would then eventually take this up and it would work against SLA.

So, with that caveat, otherwise the improvements and enhancements will be taken into account at subsequent renewals of tenancies.

Mr Deputy Speaker: Ms Hazel Poa.

Ms Hazel Poa: Thank you, Deputy Speaker. I would like to find out from Minister Edwin Tong, why is it that SLA choose — because it was mentioned in the report that demand for black and white bungalows is limited because it only has basic amenities. And I can quite see that the amount of renovation cost that is required to be spent on rental property can be a deal breaker for many. So, why does SLA choose not to install modern amenities like what private landlords do to improve demand and rental rates?

And secondly, I understand the rationale for, the reason why 26 Ridout Road was not listed on SPIO. But with hindsight, when it is apparent that a Minister is interested in renting the property would it not have been better to have listed the property on SPIO?

Mr Edwin Tong Chun Fai: On your second point, it is the call of the MA. It is the MA's discretion and whether it is the Minister or some other person trying to rent, they take the same position as you have heard Senior Minister Teo explain earlier. There is no VIP treatment or VIP track regardless of the identity or the profile of the tenant. If you meet the guide rent, you are able to clear the profile of the right tenant that we want, in particular, if you are able to offer more capex to enhance, that is the tenant profile that we would want to seek.

I also want to pick up while I am on that, on one of the questions you have filed for written answer which is whether or not there is a record of which other Ministers and public figures stay at these state properties. The point consistent with what I have said earlier is that SLA does not maintain a separate record. There is no list of which Ministers, which Members of Parliament, which public figures are staying at state properties.

On your first point about installing modern facilities, again, you got to take it in the round. If you are able to cluster them and rejuvenate, and maybe invite an external private sector party to work with you to place-make and to modernise, then yes in those cases it has been done and we will continue on that.

But obviously you do not want to install and retrofit a property in a particular way only for a tenant to want to do it in a different way.

So, for some of these we maintain it as it is, we make the basic additions from time to time, but we also rely on the tenant who comes in, such as in these two examples, to retrofit and to enhance the property.

Mr Deputy Speaker: Mr Leong Mun Wai. I am giving you some latitude, so ask all the questions that you have. Please no preambles, just clarifications.

Mr Leong Mun Wai: Thank you, Deputy Speaker. Okay, first of all, the can I ask Minister Edwin Tong. I think his reply is not quite complete. Or maybe I asked the question not too well. What I was asking is that, did SLA offer the same kind of package? Did SLA offer the same kind of package to other tenants before, in the rental of the black and white bungalows consisting of what I said just now, that before the tenant moved in, it coincided with the time where SLA had to refurbish the bungalow, so as a result, they spent hundreds of thousands of dollars to refurbish before the tenant moved in.

Secondly, the Minister said that everyone is encouraged to put in capex. But in the past, does SLA actually allow tenants to put in swimming pools easily? It this something that SLA really welcomed in the past?

And finally, the Minister did not answer and what I am trying to say is that, within the package, there is also preferential rental treatment for 31 Ridout Road. He answered that it is not just the average, it is also the range of rental, but you look at Chart 2, $23 per square metre is way, way below even the lowest rental in the Ridout Road vicinity. So, how do you justify that, after spending $570,000 renovating 31 Ridout Road and then, you still offer a price of $23 per square metre? These are my questions for Minister Edwin Tong.

Finally, I have a question for the Prime Minister. Prime Minister, as I have said just now, we believe in the integrity of our Government led by you. We are not against Ministers living well, living in GCBs; although Minister Shanmugam has tried to say that we are against that just now. We are not.

But I do not think that many would disagree that from this episode, there is a perception of an amount of conflict of interest and unfairness in the process of renting the two bungalows.

Although there may not be – and we trust the investigation by CPIB and also Senior Minister Teo – an outright misconduct of any public servant, but the result is that there is this perception there. And what the question I asked Minister Edwin Tong is exactly trying to drive at that – why is the package so coincidentally favourable?

It may be so coincidental. So, as a result, I would like to ask you one question, Prime Minister. From this episode, would you commit that from now, on the Code of Conduct of the PAP Government will be applied more stringently, learning from this episode? You said that, "No, this episode doesn't show any shortcomings in the application of the Code of Conduct. This is a kind of standard we can expect from the PAP Government", we will take it as that.

Mr Deputy Speaker: Prime Minister.

Mr Lee Hsien Loong: I thank Mr Leong for clarifying that he is not against Ministers living in GCBs. He just wants to play it up. Because having said that he has nothing against Ministers living wherever they feel they wish to live, he then raises this, alleged perception of conflict of interest and unfairness; when we have spent the last five hours explaining why there is no actual conflict of interest, why potential conflicts of interest have been cut off; and therefore, there is no possibility of a reasonable perception of conflict of interest arising.

Therefore, when he says the PAP Code of Conduct, do I intend for it to be stringently applied, what he really means is, should I or should I not allow Ministers to rent GCBs or to rent black and whites?

My answer is, I do not object to Ministers renting black and whites. They live within their salary. They live within their means. Some have come into office with means because they have had successful careers before. Some may have inherited wealth, who knows? Some come in without much. They live with what they have. They comply with the laws. They do things properly.

And most importantly, they continue to do their duties as a Minister and to serve their constituents and to serve Singaporeans and to make a contribution on my team, as an honest, capable — there was a phrase in the Minister's swearing-in text: "In all things to be a true and faithful Minister." That is what we expect of all PAP Ministers.

Mr Edwin Tong Chun Fai: Mr Leong, I have answered all three questions previously. I will try and answer them again. On your first one, I said, yes. In fact, there are examples in the media of how we have spent this amount, more than $500,000, on the maintenance and refurbishment of other properties. I also mentioned that this is because there are conservation obligations and that is why we had appointed a consultant to advise us on what works need to be done for each of them.

Second, you asked about the swimming pool. Yes, if you would like to rent one and you want to put a pool in, we welcome that.

Third, there is no preferential treatment. We go by the guide rent. The guide rent will assess the condition, the location, the comparables and then make a judgement on what the appropriate rental is, for that property. And in this case, you say it is below the average. It is because of the state of the condition of the property. It was poor condition, having been vacant for about five years or so. But that is a factor that the guide rent takes into account. The point is Minister Vivian met the guide rent and that is why it was let to Minister Vivian.

Mr Deputy Speaker: Mr Leong, could I invite you to just keep it to two clarifications?

Mr Leong Mun Wai: Thank you, Deputy Speaker. But, Minister, your answer is not logical, right? 31 Ridout Road, when the tenant negotiated for the rent, that condition was bad. So, $23 per square metre. But, after that, you put in $570,000 to upgrade the place, and you still charge at $23 per square metre. And that is rent that is way below the lowest price of the range of prices in that vicinity. Do you think that is a fair price?

And if your valuation agent provided that price, do you think the SLA officials should be there to say, "No, it cannot be that price".

Because throughout the discussion today, we also say that 26 Ridout Road, because of the improvement to the cite that was being cleared, so I have increased the rental of 26 Ridout Road by $2,000.

So, the final rent, in fact, it depends on this assessment, right? So, why did SLA not raise the objection to keep the rental price at $23 per square metre?

Mr Edwin Tong Chun Fai: Mr Leong, it is because there is a guide rent. The guide rent is determined by an independent valuer and I would suggest not to second guess that. The whole point of appointing a MA with a valuer who looks at it independently, so that we can get an assessment; a baseline.

And if indeed there is a basis to push the guide rent up in a way in which is market standard and coheres with the market, of course, we will do so. But this is the guide rent and we follow the guide rent, and as I said earlier in my speech, we do not let properties out below the guide rent. So, I hope that answers your question.

Mr Deputy Speaker: Minister Shanmugam.

Mr K Shanmugam: I thought I should answer one point that Mr Leong made, suggesting that there was a coincidence on $26,500, if I heard him right. There is no coincidence. I think he may have missed the facts when they were being set out.

I have explained. I did not know what the guide rent was. It is set out in the CPIB report and there is no coincidence in the way he suggested on $26,500. I also set out what was the first offer I made.

Mr Deputy Speaker: Mr Leong, just a short question. Hold on. If it arises from Minister Shanmugam's response, you may proceed to ask a short clarification.

Mr Leong Mun Wai: Yes, thank you. I would like to clarify with the Minister that I did not say the "coincidence" is with regard to his $26,500 rent. So, your point is not valid here.

Mr Deputy Speaker: Okay, last clarification, Mr Alex Yam.

Mr Alex Yam (Marsiling-Yew Tee): Mr Deputy Speaker, thank you for that privilege. We have had a long five-and-a-half hour session today, dealing with the contents of the report and we have also heard from both Ministers who have leased properties from the SLA, as well as a comprehensive statement from the Prime Minister. Therefore, just one question for the Senior Minister.

Based on the questions and views that were expressed during this very long, discussion and clarifications, what, in the Senior Minister's opinion, are the key takeaways from the matters which have arisen in this House during these last few hours?

Mr Teo Chee Hean: I appreciate the Member's question because we have had a very wide-ranging debate and I think it is useful to bring the matters to some conclusion and to be able to structure this, what we have discussed today.

The Prime Minister has given a very comprehensive statement on this matter and I do not intend to make a very long winding-up. So, what are the main takeaways?

First and foremost, why are we here? We are here because there have been allegations made against Ministers for corruption and other acts of abuse of power and so on. So, this is the first issue that we have to deal with and come to a landing point on.

Sir, most importantly, the CPIB has investigated the matter thoroughly, interviewed all relevant parties including the Ministers and their spouses, looked at their phones and concluded that there was no corruption or criminal wrongdoing. The AGC has reviewed the investigation papers and agreed with CPIB's findings. There is no offence and no further action is needed. And the CPIB case is closed.

There was a proper declaration and conduct by all persons involved to avoid conflicts of interest. There was also no abuse of power and no access to privileged information. The persons involved in the rental of these two properties understood their responsibilities to act with integrity and did so. And Mr Deputy Speaker, this is a credit to our officers and the system as a whole.

Members have asked for many clarifications and my colleagues and I have answered all of them. Mr Singh says no one is alleging corruption, and I am glad that he said so. There is no corruption, no abuse of power.

I think the only remaining issue is the one of conflict of interest. We have explained at length what the concept of conflict of interest is, potential conflict of interest, actual conflict of interest and that this has been dealt with particularly in the case of Mr Shanmugam and the rental of 26 Ridout Road.

There is this lingering issue of "perceived" conflict of interest. And as I have explained, if we have dealt adequately and completely, with a potential conflict of interest and that there has been no actual conflict of interest, then actually, a fair-minded person will come to the conclusion that, therefore, there is no basis for a perceived conflict of interest.

So, I think this concludes the first part of our discussion.

There were a number of useful points raised regarding the management of state properties and land, in particular of black-and-white bungalows. This is an associated issue and I think Minister Edwin Tong has explained this quite fully. He has addressed these points and also the various suggestions that we will be looking into improving the optimisation and the use of state land, which SLA has been doing and in particular, those which are not yet slated for redevelopment.

The second set of issues is important and it really is a re-affirmation of our collective belief in the importance of a clean Government and for those in public service – whether elected or public officers – to act with integrity.

Sir, the Prime Minister acted firmly on this matter. Although the reports he received from the Ministry of Law and SLA did not indicate a high likelihood of wrongdoing, he nevertheless directed CPIB to investigate the matter – when he was overseas – so that the matter could be examined independently and thoroughly to get to the bottom of things. Either prove that nothing was wrong and put the allegations to rest, as we have done today, or if the investigation turned up wrongdoing, to act on it.

We have come to Parliament to present the findings. We have answered the many questions and clarifications sought.

The Prime Minister has spoken about the Government's commitment to integrity and the high standards in the working of Government and in our country.

Underpinning all this is an ever-vigilant CPIB. But this is not enough. The CPIB is assisted by a vigilant public and a vigilant Public Service. This is what we need in order to maintain integrity, honesty and incorruptibility in our country.

Members have made some useful comments and suggestions on the Code of Conduct. And as I stated earlier, we will consider, specifically, how to introduce declarations for rental property transactions for the relevant agencies and public officers dealing with land and property matters, and also have a look at this issue for Ministers and PAP Members of Parliament.

Sir, upholding a system of governance with a high standard of integrity is a collective and continuous effort. We have achieved a remarkable standard. Just think about it.

A member of the public would be outraged and report it if a public officer were to ask him for a bribe. More importantly, a public officer would be outraged if he were offered a bribe and would report the person who had done so. This is a virtuous circle that we must maintain and the work is never done.

Finally, there was this broader point underlying this debate or this discussion, on equity, whether it is fair and how to uplift our citizens. And I believe that this is a shared aspiration of Members from both sides of this House.

This Government is definitely dedicated to building an inclusive, progressive society. This is the driving motivation that underpins Government policies, particularly in education, housing, healthcare and retirement adequacy.

Our aim is to mobilise everyone to work together, to grow the economy, to share the fruits of growth widely, to uplift the most needy among us as well as the broad mass of Singaporeans, to bridge that divide, to uplift everyone. As Minister Shanmugam said of his own experiences. In housing, particularly, we have done more than almost any other country to secure good homes for nearly every citizen and we will ensure that there will always be sufficient and affordable HDB flats for every Singaporean household.

But at the same time, we take care to keep the right balance with a whole range of housing types. We have HDB, executive condominiums (ECs), private property, and yes, including black-and-white houses.

It needs to be so. If people work hard and do well, they should be able to aspire to live in a better home in Singapore, to continue to contribute here in Singapore, to Singapore.

Sir, I am 69 years old this year and have served more than 30 years in politics – 20 years before that in Public Service. My most important task in the last half a dozen years has been to help the Prime Minister to prepare not just the fourth generation of leadership, but also to make sure that we have a system in place, that we are able to have a fifth generation of leaders coming in, having the time to learn, to be tested, and to gain the trust and support of Singaporeans.

These are people in the 30s and 40s. Many would be at the threshold where they have a good chance of reaching the peak in their chosen careers and professions. We have to bring them in and have them contributing.

All Members of this House know that coming into politics entails many sacrifices – privacy, continuous exposure to the glare of the public eye, especially, in this age of social media, in their careers, in family time and not always being there to watch your kids grow.

If they have served well, the satisfaction of having done so is the biggest reward. That makes it all worthwhile.

The biggest challenge we face is to continue bringing in the best team to do the best for Singapore and Singaporeans. I am glad today that in this House, we have agreed to focus on the facts and the truth, not just on wild allegations, rumours or perceptions, but to focus on the facts and the truth. This is important so that we can build a system with a strong foundation which will help bring in good people to continue to serve in government, to take Singapore further forward. [Applause.]

6.22 pm

Mr Deputy Speaker: Order. End of Ministerial Statements.