Khaw Boon Wan to be chairman of SPH Media CLG, management shareholders to be founding members

Published Mon, May 10, 2021 · 06:09 AM

KHAW Boon Wan, who served as the coordinating minister for infrastructure and the transport minister from 2015 to 2020, will be the chairman of the company limited by guarantee (CLG) that is being formed as part of Singapore Press Holdings' (SPH) proposed restructuring.

All the existing management shareholders of SPH have also agreed to form the CLG and be its founding members, said Minister for Communications and Information S Iswaran on Monday in Parliament. In a statement on Monday, Mr Khaw said: "It is a heavy responsibility. I accept it with some anxiety as I have no digital media experience. I will see how we can adapt relevant experiences from successful transformation elsewhere. I agree with Minister Iswaran on the local media's critical role and will do my best to ensure we succeed in this national project. "This assignment will disrupt my retirement! In the last one year, I have been blissfully content. But I cannot allow a Singapore institution to go into decline. I will see how I can help unleash the talent and the passion in our newsrooms. We will re-focus on our primary mission of providing quality journalism to help build this young nation."

SPH, which publishes The Business Times, had last Thursday proposed a restructuring that involves a transfer of the media business to a CLG. This structure will allow any future profits from the media business to be reinvested into the media operations rather than be distributed to shareholders.

The CLG will operate as a revenue-seeking business, Mr Iswaran said, subject to the usual commercial disciplines.

"This concept of a CLG run with commercial discipline is not new for us. There are several examples, including our universities, The Esplanade and The Gardens by the Bay," he said.

The current management shareholders of SPH - being OCBC, Great Eastern, UOB, DBS, Singtel, NTUC Income, Temasek via Fullerton, National University of Singapore and Nanyang Technological University - would not receive any profits as members of the CLG.

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Mr Iswaran said in the ministerial statement that he discussed the appointment of the chairman of the CLG's board with the management shareholders of SPH.

"They have all agreed that, given the national importance of this undertaking and the scale of the challenge, the chairman should be Mr Khaw Boon Wan," Mr Iswaran said.

Mr Khaw, who retired from politics last year, has agreed to be the chairman and will share his thoughts on the way forward in due course.

Mr Iswaran added: "With his high standing and more than twenty-five years of public service experience in various senior appointments, Mr Khaw will be able to provide strong strategic leadership for the CLG."

The founding members of the CLG, meanwhile, "will ensure that our local news media will remain in the hands of trusted institutions with a long-term stake in Singapore", Mr Iswaran said.

He added: "In due course, the membership will be expanded to include newer and more diverse institutions as stakeholders of the CLG."

Under the Newspaper and Printing Presses Act (NPPA), newspaper companies such as SPH are required to issue two classes of shares: ordinary shares and management shares.

Management shareholders have special voting rights relating to the appointment of directors and staff of the newspaper company. Issuance of management shares and the appointment of directors must be approved by the minister.

The government is also ready to support the CLG with funds for initiatives such digital innovation and capability development, which ensure the long-term viability of the enterprise, Mr Iswaran said.

"We want to ensure that the CLG has the wherewithal to innovate, build digital and other essential capability, and confidently take on new challenges."

He added that the new media company must have a "long-term sustainable business model with different revenue sources".

These include traditional advertising and subscription revenues, complemented by government funding, and contributions from its management shareholders and benefactors as other components.

Mr Iswaran said the CLG will formulate detailed proposals on its strategic plan to build the business. "This will form the basis for government funding and support."

MCI will lift the shareholding controls imposed on the listed SPH entity under the NPPA after the restructuring is completed.

The NPPA will then apply to the media company under the CLG's charge, although it will not apply to the CLG.

Instead, Mr Iswaran said appropriate safeguards will be incorporated in the constitution of the CLG to ensure the structure achieves its purpose and fosters the objectives of the NPPA framework.

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