‘I take ultimate responsibility’: Lim Boon Heng on failed Allianz-Income union
Lim and the NTUC Enterprise board acknowledge that the German insurer’s offer could have been managed better
[SINGAPORE] Former Cabinet minister Lim Boon Heng said he takes “ultimate responsibility” for the withdrawal of German insurer Allianz’s proposed offer to buy Income Insurance.
Speaking at an extraordinary general meeting (EGM) held on Thursday (Oct 30) by NTUC Enterprise, the parent of Income, Lim expressed regret that the strategic partnership did not succeed despite having dedicated significant time and thought to securing Income’s future.
“Unfortunately, Allianz’s proposed offer for Income was withdrawn and I take ultimate responsibility,” Lim said.
During the EGM, the 77-year-old also announced his retirement as chairman of NTUC Enterprise. He will be replaced by former Resorts World Sentosa CEO Tan Hee Teck, who was elected to the NTUC Enterprise board as its new chairman starting Oct 31.
Lim and the NTUC Enterprise board acknowledged that Allianz’s offer for Income could have been managed better.
In particular, NTUC Enterprise could have been clearer and more explicit with stakeholders that there were opportunities to improve capital resilience, efficiency and optimisation with Allianz’s proposed offer for Income.
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NTUC Enterprise could also have done better by being more proactive in public communications, Lim said.
Moving forward, NTUC Enterprise will take on board these observations to improve its processes, he said.
In his address at the EGM, Lim stressed that NTUC Enterprise had always acted in good faith in relation to the corporatisation of Income and Allianz’s proposed offer for Income, as affirmed by an independent legal review.
“While this particular chapter in Income’s history – of Allianz’s proposed offer for Income, which was subsequently withdrawn in 2024 – is closed, there is still much work to be done going forward for the NTUC Enterprise board to consider all strategic options that can future-proof Income, taking into account considerations of stakeholders,” Lim said.
In July 2024, Allianz proposed to buy a majority stake in Income, in a deal valued at S$2.2 billion. But the deal fell through after five months.
The government called off the proposed union on concerns over the deal structure and Income’s ability to continue its social mission.
On Oct 16, 2024, Parliament passed a Bill to amend the Insurance Act so that the Monetary Authority of Singapore would have to consider the views of the Ministry of Culture, Community and Youth when an application for regulatory approval involves an insurer that is either a cooperative or linked to one. Income’s board and NTUC Enterprise acknowledged the withdrawal of Allianz’s offer following the amendment of the Insurance Act.
A key reason the deal was rejected by the government was Allianz’s planned capital reduction exercise, which would return S$1.85 billion to shareholders within the first three years after the deal was completed – a sticking point that surfaced only later.
The money was part of the surplus that would have gone to the Co-operative Societies Liquidation Account to benefit Singapore’s co-op movement, had the government not given Income an exemption allowing it to carry over a surplus of S$2 billion in capital when the insurer was corporatised in 2022.
Many questions remain unanswered from the Income-Allianz saga, with some observers criticising the lack of transparency and accountability had the government not stepped in.
Lim had defended the deal, arguing that the stronger Income is, the more competitive it can be.
However, then Minister for Culture, Community and Youth Edwin Tong later raised concerns about the planned capital reduction and impact on Income’s social mission.
Observers said Income’s stakeholders, including the government, policyholders and shareholders, were not given the full picture by Income and NTUC Enterprise.
The entire episode was discussed heatedly in Parliament, with backbenchers demanding to know whether the NTUC leadership was aware of the proposed initiative to reduce Income’s share capital.
NTUC deputy secretary-general Desmond Tan told Parliament on Oct 16 that the labour movement’s central committee did not know of the insurer’s plan before it was made known in Parliament on Oct 14.
Tan said NTUC is a major shareholder of NTUC Enterprise and does not get involved in day-to-day operations, with business decisions delegated to the board of NTUC Enterprise.
Lim said it had been a privilege to serve and lead NTUC Enterprise alongside directors and managements across the portfolio with wide experience, deep expertise, and strong alignment to the purpose and social mission of NTUC.
“Even as I step down from my role as chairman, I ask the team to render their support to Hee Teck as they have given me, to bring NTUC Enterprise to new heights,” he said.
NTUC secretary-general Ng Chee Meng paid his tribute to Lim, whom he described as “a giant of the labour movement, a selfless leader whose entire career has been devoted to Singapore”.
NTUC highlighted that Lim’s dedication was evident during the Asian financial crisis in 1997, when he rallied unionists and workers to accept temporary cuts to employers’ CPF contributions to stay employed. As a result of this, businesses remained viable during the crisis, and many workers’ jobs were saved. THE STRAITS TIMES
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