SINGAPORE - The crux of the debate over the renting of state-owned black-and-white bungalows by two Cabinet ministers is not about allegations of corruption, but the question of political optics, said Leader of the Opposition Pritam Singh.

Among the issues that the Workers’ Party (WP) chief raised in Parliament on Monday was the decision in 2017 by Home Affairs and Law Minister K. Shanmugam to ask the then deputy secretary of the Ministry of Law (MinLaw) for a list of state properties available to the public for rent.

This was before Mr Shanmugam had appointed a property agent to represent him to rent the colonial bungalow at 26 Ridout Road, at the same time recusing himself from the “chain of command”.

“The fact of the matter here is, I don’t believe anybody is making an allegation that the minister is corrupt (or) somebody is corrupt in the system... Singaporeans are not making that point. I think it’s quite clear to me,” Mr Singh said.

“The issue I think we’re 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,” he added.

“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,” Mr Singh later said in an exchange with Prime Minister Lee Hsien Loong, who rose up to speak several hours into the parliamentary session.

“Does the Prime Minister not agree that actually, 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?”

People’s Action Party MP Sitoh Yih Pin (Potong Pasir), as well as WP MPs Dennis Tan (Hougang) and Gerald Giam (Aljunied GRC), also raised questions on whether Mr Shanmugam’s decision to ask a deputy secretary for information was appropriate.

Mr Giam suggested that the minister should have asked his property agent to approach the Singapore Land Authority (SLA) for properties to rent, and informed the deputy secretary of this separately.

‘Total transparency’

Defending his decision, Mr Shanmugam said he made this choice so that there was “total transparency”.

He and Senior Minister Teo Chee Hean, who had conducted a review into the Ridout Road affair, also emphasised that the list of state properties available for rent is not privileged information or secret.

They said such lists have been made available to “credible, prospective tenants”, such as embassies, companies and businessmen.

“I could have approached SLA directly... 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,” Mr Shanmugam said.

“But I asked the deputy secretary, a senior administrative service officer, so that (MinLaw) knew and there was total transparency.”

Mr Shanmugam added: “He would usually let the permanent secretary know... (and they) will be able to go beyond me and report to the head of civil service or the Prime Minister, if they had felt that anything needed to be brought up to that level...

“That is how our system works... 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.”

SM Teo said it is in SLA’s and the appointed managing agents’ interests for state properties available for lease to be made known – whether through the publicly accessible State Property Information Online (SPIO) portal, or other means such as a network of property agents.

He added: “(They) 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... are available for lease, (they) will provide the appropriate information, including on properties not listed on the SPIO,” he said.

SM Teo cited an example of how in June 2019, SLA had provided a list of more than 10 state properties up for lease in the form of a 22-page slide deck, to a company that was looking to rent several properties for employees for its operations in Singapore.

“This is not unusual, and it is not privileged information,” SM Teo added, noting as well that the company did not need to pay SLA to get the list, contrary to Mr Singh’s assertion that individuals would have to go to considerable expense to access it.

PM Lee said: “Outrageous allegations were being made that ministers had enjoyed improper benefits and inside tracks, and were getting a sweet deal, and all sorts of very grave innuendos were being stated... 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.”

Code of conduct

Another point of debate was whether Mr Shanmugam and Foreign Minister Vivian Balakrishnan had adhered to the ministerial code of conduct, which states that a minister must scrupulously avoid any actual or apparent conflict of interest between his office and his private financial interests.

WP chairman Sylvia Lim noted that the code of conduct for ministers does not have the force of law and should not be the subject of legal arguments or technicalities, as it embodies the highest standards expected of all ministers in the conduct of their public affairs.

She also pointed out that the code strictly forbids ministers from entering into any transactions where their private financial interests might conceivably come into conflict with their public duty.

“Does (SM Teo) 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?” she asked.

To this, SM Teo said Mr Shanmugam took steps to make sure that he removed himself from his duties and powers over what would have been a private matter.

“Once the actual conflict of interest and a potential conflict of interest have been removed, that should dispel the perception of conflict of interest in any fair-minded person,” he added.

Mr Singh asked if the Corrupt Practices Investigation Bureau (CPIB) was tasked to look into whether the ministers had acted in accordance with the code of conduct.

PM Lee said the CPIB had, after going through all the facts of the case, concluded that there was no preferential treatment, disclosure of privileged information, or abuse of position.

“I think these are issues which are relevant to whether the ministers complied with a code of conduct or not. So I did not ask them to investigate the conduct, but they came to these conclusions.”

Optics and public perception

MPs including Mr Singh, Mr Murali Pillai (Bukit Batok) and Progress Singapore Party (PSP) Non-Constituency MP Leong Mun Wai also raised questions about optics and public perceptions.

Mr Murali said there had been some comments about whether ministers living in private properties like the Ridout Road bungalows are able to relate to the people, and asked if such acts “engender a picture of inequality”.

Mr Leong said the PSP is not against ministers living well, but he said that there is a perception of unfairness.

He questioned whether SLA had offered other tenants of black-and-white bungalows the same treatment as Mr Shanmugam and Dr Balakrishnan, by paying hundreds of thousands of dollars for preparatory work and allowing them to construct swimming pools and cut down trees, for instance.

He also asked PM Lee if he would commit to applying the ministerial code of conduct more stringently in future.

PM Lee said Mr Leong was trying to play up the fact that some ministers live in properties like good class bungalows (GCBs).

“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,” he said.

“(Ministers) live within their salary. They live within their means... 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 to my team,” he added.

Second Minister for Law Edwin Tong said there are reported examples of SLA spending more than $500,000 on maintaining and refurbishing other black-and-white properties.

SLA also welcomes tenants that put in their own money on improvements like a swimming pool.

He said: “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 capex (capital expenditure), so that these properties can both be maintained as well as enhanced.”

Mr Shanmugam said his empathy did not decrease as he went from living in a rental flat as a child, to living in his family home, which is a GCB.

“My residents judge me by my heart and my commitment to serve, not by how much I earn and where I live,” he added.

How the Ridout Road properties were valued

During the nearly six-hour debate on Monday, Mr Leong also said that Mr Shanmugam and Dr Balakrishnan should have considered the negative public perception of renting what the NCMP said were “relatively cheaper” black-and-white bungalows.

To this, SM Teo said it is a misconception that the two Ridout Road properties were “relatively cheap”, noting that they were rented out at market rate with valuations done independently, separate from SLA’s leasing department.

Mr Singh suggested that using gross floor area (GFA) instead of the total land area of black-and-white properties represents a policy loophole.

“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,” he said.

While he added that no one is blaming Mr Shanmugam for the land area of the property being increased from 9,350 sq m to 23,164 sq m – the minister had also said that he would prefer to give up the extra land while continuing to pay for its maintenance – Mr Singh asked if value should be placed on the vacant land.

“There’s a question of political optics. When we want to rent, let’s say, a landed property, an intermediate terrace house would cost less than a quarter-terrace or semi-detached house. Why? Because the land has utility,” Mr Singh added.

WP MP Jamus Lim (Sengkang GRC) asked if the chief valuer at SLA would consider the possibility of pricing the land value of Housing Board flats differently.

He said: “What many Singaporeans are concerned about is this notion that... there’s one class of rentals for heritage buildings with bundled land... and there’s another market, a market where if you live in an HDB, then it is land pricing where otherwise you would be raiding the reserves.”

To this, Mr Tong said one cannot apply the same principles for valuing an HDB flat to assess the value of a black-and-white property for rental, just as one cannot apply them to a terraced house or a condominium.

“It has got to be comparable in the sense of land size, age of the property, condition of the property... You look at the comparables, and then maybe you make adjustments for outliers,” he said.

Mr Tong also explained that the valuation of residential black-and-white properties for rental is guided by GFA, among other factors, as it represents the available living space for the tenant, and usually has a larger impact on the marketability of the property.

“It is not anomalous. It is market practice,” he added.