Media Authority's Due Diligence and Oversight Processes in Provision of Financial Support
Ministry of Digital Development and InformationSpeakers
Summary
This question concerns the due diligence and oversight processes exercised by the Media Development Authority (MDA) regarding financial support provided to RGM Entertainment and RGM Group. Mr Leon Perera inquired about potential lapses and measures taken to strengthen oversight mechanisms after RGM's principal committed forgery to hide MDA's missing investment funds. Minister for Communications and Information Assoc Prof Dr Yaacob Ibrahim responded that MDA has since shifted from equity co-investments to a grant-based model where funds are only disbursed upon meeting project deliverables. He detailed that MDA now employs tighter qualifying criteria, an online grant management system for better audit trails, and commissions project audits directly rather than through recipients. Additionally, whistle-blowing hotlines have been implemented to allow for the reporting of potential wrongdoing, ensuring more robust governance in the provision of financial awards.
Transcript
18 Mr Leon Perera asked the Minister for Communications and Information (a) what due diligence and oversight processes have been exercised by MDA prior to it providing financial support to RGM Entertainment and RGM Group in 2010 and 2011; (b) what lapses occurred in MDA's due diligence and oversight processes in this case, if any; and (c) what measures has MDA since taken to strengthen its due diligence and oversight mechanisms in making such awards.
Assoc Prof Dr Yaacob Ibrahim: In 2010 and 2011, the Media Development Authority (MDA) invested $15 million in RGM Entertainment and RGM Group to position Singapore as a media financing and production hub.
Before proceeding with the investments, MDA checked RGM's track record, assessed the projected returns and examined the backgrounds of other co-investment partners.
However, in 2011, MDA had difficulty recovering its funds from RGM and suspected wrongdoing on the part of the company. MDA immediately reported the matter to the Commercial Affairs Department (CAD) and commenced legal action to recover the monies owed. After investigating the matter, CAD found that RGM's principal, Devesh Chetty, had forged bank statements to hide MDA's missing funds. In June 2016, CAD brought criminal charges against Chetty, who was found guilty of forgery and sentenced to 22 weeks' jail. The RGM entities were also wound up by the High Court.
Following a review of the incident, MDA no longer enters into such equity co-investments, given their inherently more complex nature and higher risks. Instead, MDA has moved to a grant-based model where money is disbursed only after clearly defined project deliverables are achieved. MDA has also instituted additional governance measures, such as tightening the qualifying criteria for grants, implementing an online grant management system to improve the audit trail and commissioning project audits directly instead of through the grant recipients. In addition, MDA has implemented whistle-blowing hotlines for anyone to report potential wrongdoing to MDA.