2023 Ridout Road rentals parliamentary review
On 3 July 2023, Singapore’s Parliament convened to discuss the rental of black-and-white bungalows at 26 and 31 Ridout Road by Minister for Law and Home Affairs K Shanmugam and Minister for Foreign Affairs Vivian Balakrishnan.
Senior Minister Teo Chee Hean and Minister for Culture, Community and Youth and Second Minister for Law Edwin Tong delivered detailed ministerial statements addressing queries surrounding the transactions.
These properties, managed by the Singapore Land Authority (SLA), had attracted public scrutiny, necessitating investigations by the Corrupt Practices Investigation Bureau (CPIB) and an independent review led by Senior Minister Teo.
Senior Minister Teo Chee Hean
Context and Mandate of the Investigation
Senior Minister Teo began by underscoring the government’s commitment to maintaining public trust and addressing concerns promptly.
He explained that Prime Minister Lee Hsien Loong had directed the CPIB to investigate the leases to determine if there was any corruption, abuse of power, or conflict of interest.
“The Prime Minister's decision to involve the CPIB, Singapore's premier anti-corruption agency, underscores our zero-tolerance approach to corruption. The CPIB is empowered by the Prevention of Corruption Act and operates independently, ensuring its findings are authoritative and free of influence.”
Teo also conducted a concurrent review to assess whether proper processes were followed by the SLA and whether the existing policies governing black-and-white bungalows were adequate.
Findings of the CPIB Investigation
CPIB’s Methodology
The CPIB interviewed key stakeholders, including the ministers and their spouses, SLA officials, and third-party property agents. It also examined documents, electronic communications, and historical data on the properties. Teo elaborated on the thoroughness of the process:
“The CPIB's investigations included scrutinising phone records, WhatsApp messages, and financial transactions. This rigorous approach ensured that all aspects of the transactions were reviewed independently.”
Key Findings
- No Evidence of Corruption or Criminal Wrongdoing
- The CPIB concluded that the leasing processes were conducted fairly, with no preferential treatment or abuse of position by the ministers.
- Minister Shanmugam and Minister Balakrishnan were found to have acted appropriately throughout the negotiations.
- Fair Market Rental Rates
- The rents paid by the ministers aligned with market valuations. CPIB confirmed that the guide rents, which serve as the minimum acceptable rate, were not disclosed to the tenants or their agents, ensuring impartial negotiations.
- No Disclosure of Privileged Information
- CPIB found no evidence that the ministers or their spouses accessed privileged information about the properties, rental rates, or bidding processes.
Teo summarised the findings:
“The CPIB’s investigation affirmed that the transactions were conducted with integrity, and there was no evidence of wrongdoing. This reflects the robustness of our systems in safeguarding public resources.”
Details of the Ridout Road Properties
26 Ridout Road
Senior Minister Teo described the history and leasing process for 26 Ridout Road. Vacant since 2013, the property was challenging to rent due to its large size and maintenance requirements.
In 2018, Minister Shanmugam appointed a property agent to negotiate the lease. During a site visit, he noted safety concerns due to an overgrown adjacent plot.
“Minister Shanmugam raised concerns about the adjacent plot, citing risks from overgrown vegetation, snakes, and mosquitoes. He offered to maintain the land at his own cost if SLA included it in the tenancy.”
The SLA agreed, incorporating the adjacent land and increasing the property size to 23,164 square metres. Essential repairs costing $515,400 were undertaken by SLA to make the property habitable, and the rent was set at $26,500 per month. Shanmugam personally financed $400,000 worth of additional improvements.
31 Ridout Road
This property, also vacant since 2013, faced similar challenges in attracting tenants. In 2018, Mrs Balakrishnan contacted the SLA after noticing a "For Lease" sign. Negotiations concluded at a monthly rent of $19,000, later adjusted to $20,000 upon lease renewal in 2022.
Teo highlighted:
“The valuation for 31 Ridout Road reflected the property’s condition and market trends at the time. Minister Balakrishnan’s improvements, exceeding $200,000, further enhanced the property.”
Both cases demonstrated that the tenants bore significant personal costs for additional works beyond SLA’s mandatory repairs.
Second Minister for Law Edwin Tong
Minister Edwin Tong addressed broader questions about SLA’s policies, valuation methods, and tenant selection processes. He provided a detailed overview of SLA’s mandate and approach to managing black-and-white bungalows.
SLA’s Policy Objectives
“The SLA manages a portfolio of state properties, including heritage bungalows. Our aim is to optimise their usage while preserving their historical and architectural value. Black-and-white bungalows are a unique subset, subject to stringent conservation requirements.”
Tong explained that these properties often required substantial investment in maintenance and repairs, making them less attractive to prospective tenants. He noted that SLA grants longer tenancies to encourage tenants to invest in improvements.
Prime Minister Lee Hsien Loong
Lee Hsien Loong addressed the Ridout Road rental issue, emphasizing the government's unwavering commitment to integrity and transparency.
He stated that both Ministers K Shanmugam and Vivian Balakrishnan had acted appropriately in their rental of the properties and retained his full confidence.
PM Lee began by framing the parliamentary discussion as a matter of integrity and governance, stating:
“The focus of the debate has been on values: integrity, propriety, incorruptibility. Ministers in Singapore are paid a clean wage—realistic, competitive but clean wage. They do not get perks. There is no official house to live in. You get a salary; it is for you to judge what you need it for your lives: save it, give it away, spend it on a house, travel, whatever.”
Lee Hsien Loong reiterated that Ministers Shanmugam and Balakrishnan had acted appropriately in leasing the black-and-white bungalows at Ridout Road and adhered to all procedures set out by the Singapore Land Authority (SLA). He noted:
“Where Ministers decide to live, whether they want to rent, whether they want to buy, these are personal choices. And thus, I see nothing wrong with Ministers renting properties from SLA or, for that matter, from a private landlord, provided it is properly done, and all procedures are followed.”
Parliamentary Questions and Responses
The debate included extensive questioning by MPs from both sides of the House. Key exchanges are outlined below:
Conflict of Interest
Leader of the Opposition Pritam Singh questioned whether sufficient measures were taken to prevent conflicts of interest, particularly given Minister Shanmugam’s oversight of SLA as Minister for Law.
Senior Minister Teo responded:
“Minister Shanmugam recused himself from all SLA-related matters involving his lease. The chain of command was adjusted to ensure independence, with decisions routed through the Senior Minister of State.”
Valuation and Transparency
Leon Perera sought clarification on how SLA determined the guide rents and whether these were consistently applied. Minister Tong provided a detailed explanation:
“Valuations are conducted using the direct comparison method, considering factors such as location, condition, and market trends. These assessments are carried out independently by SLA’s valuation team, which operates separately from the leasing team.”
Marketing and Bidding Processes
PSP NCMP Hazel Poa raised concerns about the marketing of the properties, asking why they were not consistently listed on public platforms. Tong clarified:
“At the time, market conditions allowed managing agents to use discretion in marketing strategies. However, since 2022, all residential properties are now listed on the State Property Information Online (SPIO) portal for at least 14 days.”
Importance of accountability
Denise Phua (Jalan Besar GRC) asked the Prime Minister for his overall perspective on the Ridout Road debate and its implications. Responding, Lee Hsien Loong stressed the importance of accountability:
“I decided that notwithstanding my confidence in [the Ministers] and in the system, it would be best for me to task CPIB to conduct a formal investigation and to establish definitively if there was any corruption or wrongdoing.”
He elaborated on why the CPIB was chosen, describing it as independent and equipped with the necessary powers to investigate thoroughly. Lee Hsien Loong remarked:
“Everybody in Singapore knows what it means when CPIB invites you to ‘lim kopi.’ They can invite anybody: Ministers, officials, businessmen, ordinary Singaporeans—whoever it is necessary for them to interview in order to establish the facts and the truth and whether there is culpability.”
The extent of CPIB's investigation
Pritam Singh raised concerns about whether the CPIB’s investigation extended to the Ministerial Code of Conduct. PM Lee clarified:
“CPIB's instructions from me were to establish whether any corruption or criminal offence had been committed. You cannot do that without going into all the facts of the case, and in the process...they came to conclusions on preferential treatment, disclosure of privileged information, and abuse of position. They put it in their report that they found none of this.
r Teo’s review complemented CPIB’s investigation Ministers g broader procand governance issues.
Phones of ministers not seized
Policy Improvements and Recommendations
In concluding the debate, Senior Minister Teo outlined measures to enhance governance and prevent future controversies. These included:
- Enhanced Declarations: Public officers with access to sensitive information will be required to declare potential conflicts before leasing state properties.
- Review of Ministerial Guidelines: The Prime Minister will revisit rules governing property transactions involving political officeholders to strengthen transparency.
Concluding Remarks
Senior Minister Teo closed by reaffirming the government’s commitment to integrity:
“This case reflects the importance of upholding high standards in public service. The findings demonstrate that our institutions remain robust and impartial, even when dealing with sensitive issues involving senior officials.”
Deputy Speaker acknowledged the thoroughness of the statements and adjourned the session.