To prevent conflict of interest, public servants who have access to government property leasing or valuation matters will have to make a declaration, before they can rent such properties managed by their agencies.

Senior Minister Teo Chee Hean said on Monday (Jul 3) in Parliament that the Public Service Division (PSD) will introduce a standard declaration requirement for a selected group of officers with access to, or who are involved in, leasing and valuation matters.

PSD will be working with relevant ministries and statutory boards such as the Housing and Development Board, JTC Corporation, National Environment Agency and Singapore Land Authority (SLA) to do so.

Officers in these organisations who have access to privileged information, or who can influence the outcomes of decisions, or both, will have to declare that they have taken adequate steps to prevent any conflict of interest from arising, before they can rent the government properties managed by their agencies.

For example, they can recuse themselves from overseeing or processing the transaction.

These properties include commercial and residential state properties such as black and white bungalows, terraces, factory or office spaces, business parks, shops in neighbourhood centres, as well as hawker and market stalls.

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Teo said the prime minister will also review the declarations required for property transactions for ministers and People’s Action Party MPs.

He was speaking in Parliament following the release of the Ridout Road report on Jun 28, detailing the Corrupt Practices Investigation Bureau’s (CPIB) investigation into Law and Home Affairs Minister K Shanmugam and Foreign Minister Vivian Balakrishnan’s rental of the black and white bungalows from SLA.

CPIB was tasked by Prime Minister Lee Hsien Loong to investigate and determine if there was any corruption or criminal wrongdoing in the two rental transactions.

Teo had also been appointed by PM Lee to review the matter, and establish whether proper processes had been followed, and if there had been any wrongdoing.

The CPIB report found no evidence of corruption or criminal wrongdoing, while Teo’s report said there was no conflict of interest. It also found that both ministers, the public officers and private sector intermediaries involved had conducted themselves properly.

On Monday, Teo reiterated the independence of CPIB’s investigation.

He noted that the agency reports directly to PM Lee – “not to the Minister of Home Affairs, or to me, for that matter, the Coordinating Minister for National Security”.

“Moreover, the director of CPIB can go directly to the president if the prime minister stops him from investigating a possible crime – the Constitution provides the CPIB director that right,” he said.

“There is no more thorough, persistent, and I daresay even fearsome investigative body in Singapore.”

That the prime minister did not hesitate to call in the CPIB to investigate two senior ministers shows how seriously the government takes such matters, said Teo.

“Incorruptibility is an absolute value in our system,” he added.

In addition to CPIB’s investigation, Teo said he had asked the Ministry of Law (MinLaw) to provide a detailed briefing on the policies and processes governing the management of black and white bungalows.

Hence, his review relied on CPIB’s investigation findings on the renting out of the two properties, and a review of the policies and processes governing the management of black and white bungalows, to come to its conclusions.

Addressing questions from MPs on whether there was any conflict of interest in the renting out of the two properties, Teo said the review had concluded that there was not.

Both the ministers and the public officers involved had duly declared any potential conflict of interest and followed the proper processes, to prevent any actual conflict of interest from arising, he said.

Shanmugam had removed himself from the chain of command and decision-making process on the rental of No 26 Ridout Road completely.

He directed then deputy secretary of MinLaw to approach then Senior Minister of State for MinLaw Indranee Rajah, in the event that any matter had to be referred to the minister.

If the matter had to go beyond Indranee, Shanmugam had also informed Teo that Indranee could approach him.

“As no matters were raised to me regarding any aspect of the rental transaction, I am not an involved party in the rental process,” said Teo.

On whether both ministers had complied with the Code of Conduct for Ministers, Teo noted that the principles laid out in the codes adequately cover any potential conflict of interest that could have arisen, including in this case.

The ministers, public officers and private-sector intermediaries were aware of their duty to declare and avoid any conflict of interest. They took appropriate steps to prevent any potential or actual conflict from arising, he said.

“It is more important to observe the spirit rather than the letter of the codes,” said Teo.

Nevertheless, the public service will reference the Ridout Road case as an additional example to reinforce the importance for public officers to act with integrity, he added.

Responding to MPs’ questions on whether the ministers benefited from privileged information or from favourable rental rates, Teo shared more information from the investigations that was previously not revealed in the report.

In the case of Shanmugam’s rental of No 26 Ridout Road, he had initially offered a rental of S$25,000, based on his agent’s advice.

He had instructed his property agent that he should not be paying less than his neighbours. A neighbouring unit had been tenanted at S$26,000.

SLA then counterproposed a rental of S$26,500 and this was agreed on, said Teo.

In negotiations with SLA, a plot of adjacent land with overgrown vegetation was included within the No 26 Ridout Road property boundary, with the tenant responsible for maintaining it.

Teo said that as SLA wanted to recover from the tenant the cost of land clearance and new fencing to amalgamate the cleared land, its leasing division calculated that SLA needed to recover an amortised cost of S$2,000 a month from the tenant over the duration of tenancy.

The leasing division then asked SLA’s valuer what the impact would be on guide rent if the plot was enlarged, the additional land was cleared, and SLA recovered the amortised cost.

The valuer told CPIB in an interview that in her view, the guide rent for the larger land area of 23,164 square metres, up from 9,350 square metres and once cleared of vegetation, should be S$26,500.

But if the tenant paid the clearance costs, the guide rent of S$24,500 could be maintained.

“Throughout this episode, the SLA valuer did not know the identity of the prospective tenant,” said Teo, adding that the valuer only learnt that the tenant was Shanmugam after the matter was reported in the media.

She also did not know the rental amount which the leasing division had negotiated with the tenant.

Replying to queries on costs incurred for maintenance and upgrading works for the two Ridout Road properties, Teo said the works done were in keeping with SLA’s general practices and were to make both properties habitable.

Works for No 26 Ridout Road totalled S$515,400, while works for No 31 Ridout Road came to S$570,500.

The valuation of the property would have factored in the condition of the property after works were done, to bring them to a habitable condition, said Teo.

He added that SLA did a cost-benefit analysis to confirm that the rent that could be recovered would more than justify the works over their expected service life, which could be 10 years or more.

In conclusion, Teo said this episode demonstrated the paramount importance of maintaining high standards of integrity and accountability in the government and nationally.

“The extensive questions posed by members from both sides of the House reflect the importance we place on the integrity and quality of Singapore’s system of government.” THE STRAITS TIMES