When German financial services company Allianz proposed to acquire a majority stake in Income Insurance, an independent financial adviser was appointed for the deal.
That financial adviser was Morgan Stanley, and as Income Insurance Chairman Ronald Ong also held a position in the former, he recused himself from the decision.
Source: Google Maps
Mr Ong’s recusal was revealed in a press release from Income on Saturday (27 July).
It said that besides being Income Insurance Chairman, he is also a senior executive at Morgan Stanley.
According to his bio on Income’s website, Mr Ong is Chairman and Chief Executive Officer of Southeast Asia at Morgan Stanley.
He has been with Morgan Stanley for over 20 years, and has more than 30 years of experience as a banker, it added.
Mr Ong thus recused himself from the Income board of directors’ decision to appoint Morgan Stanley as its financial adviser.
The decision was after a “considered selection process”, Income said.
It included a first review by an audit committee before approval by the full board, the statement said, adding:
They were appointed based on their prior insurance transaction credentials, the experience of their deal team and their deep understanding of Income Insurance.
Source: Google Maps
The role of the independent financial adviser is to advise the board on whether to recommend shareholders to accept or reject the offer made by Allianz, when it’s made.
Its appointment was made “in line with good corporate governance”, Income said.
Income also said that its board comprises 12 directors, 10 of whom are independent — an overwhelming majority, it noted.
All the independent directors are “experienced and seasoned professionals with considerable experience in their respective fields”, it added.
Additionally, none of its directors are connected to Allianz.
Therefore, all of them are “considered independent for purposes of making a recommendation on the offer”.
To that end, it said:
The full Board (including all the independent directors) unanimously approved the transaction document entered into by Income Insurance in relation to the Offer.
The statement comes after questions were raised on a potential conflict of interest due to Mr Ong’s jobs in both Income and Morgan Stanley.
Allianz’s proposal has already raised eyebrows among observers, with former NTUC Income CEO Tan Suee Chieh telling Channel NewsAsia (CNA) that it was a “breach of good faith”.
He pointed out that it had been assured that NTUC Enterprise would remain as majority shareholder when concerns were raised about its corporatisation in 2022.
Diplomat Tommy Koh also voiced his objections to the potential sale on Facebook, saying Income “should never be sold” as “it was founded to serve a social purpose and a social need”.
NTUC Enterprise Chairman Lim Boon Heng has emphasised that the organisation remains “fully committed to supporting Income Insurance Limited”.
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