Singapore Symphony Orchestra to get more leeway to manage its funds

The Singapore Symphony Orchestra's Christmas concert 2012. A successful High Court application by the Singapore Symphonia Company (SSC) has paved the way for its $25 million trust fund to be dissolved and the proceeds transferred to the Sin
The Singapore Symphony Orchestra's Christmas concert 2012. A successful High Court application by the Singapore Symphonia Company (SSC) has paved the way for its $25 million trust fund to be dissolved and the proceeds transferred to the Singapore Symphony Orchestra's (SSO) endowment fund. -- FILE PHOTO :SINGAPORE SYMPHONY ORCHESTRA

$25m trust fund dissolved; proceeds moved to more flexible endowment fund

A successful High Court application by the Singapore Symphonia Company (SSC) has paved the way for its $25 million trust fund to be dissolved and the proceeds transferred to the Singapore Symphony Orchestra's (SSO) endowment fund.

This will give the orchestra flexibility in using the funds, instead of being hampered by the onerous conditions of the trust.

The trust fund - known as the Singapore Totalisator Board Trust - was created by the Tote Board in 1989 for the SSO with the income from the capital sum to help with the orchestra's operations.

The board operates horse racing through the Singapore Turf Club and other forms of betting through Singapore Pools, and manages funding activities from the gaming surpluses.

The original trustees of the SSO fund were Dr Goh Keng Swee, Mr E.W. Barker, Mr Tan Boon Teik and Mr Koh Beng Seng.

One condition in the trust was for any loss or shortfall in the $25 million to be made good first before income could be paid out.

As the 2008 financial crisis caused the trust value to erode below $25 million, this sparked a deficit for the SSO, which had budgeted for the income.

The board refused its request for a top-up but subsequently agreed to donate all the standing funds in the trust to the SSO's endowment fund.

Unlike a trust fund, which is governed by conditions prescribed by the donors, an endowment fund is typically made up of direct donations and is administered by the organisation itself.

The SSC, represented by Allen & Gledhill lawyer Andrew Chan, had to first dissolve the trust by seeking a court declaration that Tote Board and the SSC were the only beneficiaries under the trust.

Judicial Commissioner Edmund Leow granted the order, as there was no other party entitled to any interest in the trust. Being the only two beneficiaries, they were entitled to dissolve it.

"The SSO, as the recipient of a gift of trust funds, was undoubtedly a beneficiary," he added in judgment grounds released yesterday.

The judgment will clarify the position for two other groups, the Singapore Dance Theatre and Singapore Chinese Orchestra, which are also beneficiaries of similar trust arrangements with the Tote Board involving lesser amounts, and are seeking similar changes.

Senior Counsel Michael Hwang and lawyer Hee Theng Fong, representing the groups pro bono respectively, provided submissions to assist the court in its deliberation of the SSO case.

Based on the judge's decision, the two parties "or any other persons in a similar position may be spared the expense of an application to court".

The $25 million transfer sum will boost the SSO's current endowment fund to about $56 million, said SSC general manager Chng Kai Jin.

"I am delighted with the court's decision," he said, noting the endowment fund, which is under the purview of the SSO's board of directors, allows for greater flexibility in the management of funds.

"We need to continue to grow the endowment fund as a source of income to support and grow the SSO."

vijayan@sph.com.sg