Two colonial bungalows on Ridout Road, rented by Law and Home Affairs Minister K Shanmugam and Foreign Affairs Minister Vivian Balakrishnan came under public scrutiny recently.

Allegations, notably from Reform Party Chief Kenneth Jeyaretnam, hinted at possible conflicts of interest and preferential treatment, stirring public interest and prompting the need for clarity.

1. Timeline:

2018: The properties at 26 and 31 Ridout Road, lying vacant for years, were leased out to Ministers Shanmugam and Balakrishnan respectively. These transactions followed standard procedures, with "For Lease" signs indicating their availability to the public.

2023: Reform Party Chief Kenneth Jeyaretnam stirred the political landscape by alleging conflicts of interest in the ministers' rental arrangements, creating a ripple effect of public interest and speculation.

17 May 2023: The Prime Minister's Office (PMO) initiated an investigation to scrutinise these allegations. The Corrupt Practices Investigation Bureau (CPIB) was tasked with this duty.

22 May 2023: A separate review was initiated by the PMO, with Senior Minister Teo Chee Hean leading the process.

2. CPIB clears allegations of Ministers wrongdoing.

Given the gravity of the allegations, the Prime Minister's Office (PMO) initiated two separate probes. One led by Senior Minister Teo Chee Hean and the other by the Corrupt Practices Investigation Bureau (CPIB), aimed at uncovering any traces of wrongdoing or preferential treatment in the rental transactions.

3. Key points from results of CPIB probes

Key revelations include:

Exoneration: The CPIB and AGC found no evidence of corruption, criminal wrongdoing, or any abuse of position by either Minister Shanmugam or Minister Balakrishnan.

Fair Transactions: There was no preferential treatment or privileged information provided to the ministers during the rental process.

Conflict of Interest Avoided: Minister Shanmugam recused himself from any decision-making related to the property he rented, while the SLA, which oversees the properties, falls outside of Minister Balakrishnan's professional purview.

Market-compliant Rents: Both ministers adhered to market rates for the properties. Minister Shanmugam even specifically directed his agent to ensure his rent was not less than his neighbours'.

Unbiased Review: The review was led by Senior Minister Teo Chee Hean, who had not previously approved or reviewed the ministers' rentals, ensuring a neutral examination of the situation.

4. Were there any wrongdoings discovered?

Based on the investigative results, it appears that the ministers acted within the parameters of the law and maintained ethical conduct throughout their transactions. In fact, the ministers went above and beyond mere rental responsibilities by investing personal funds into the properties. Minister Shanmugam reportedly spent approximately $400,000, and Minister Balakrishnan disbursed around $200,000, significantly contributing to the properties' enhancement.

5. What is the market rate for the rental of colonial black and white bungalows?

The rent per unit floor area per sq m per month for 26 Ridout Road, rented by Home Affairs and Law Minister Shanmugam in June 2018, came to around $30.94.

This translates to a monthly rent of $26,500 for the property with a total floor area of 856.5 sq m.

For 31 Ridout Road, rented by Foreign Minister Balakrishnan in October 2019, the rent per sq m per month came to $23.05, for a monthly rent of $19,000 for the 824.3 sq m property. This was revised to $20,000 a month upon renewal for three years in October 2022.

A bungalow of comparable size – listed in the report as Property E – in the same estate with a total floor area of around 800 sq m, was rented out in June 2018 for $32.50 per sq m per month. This translates to a monthly rent of $26,000.

The rent paid by both ministers are generally in line with the market norm.

6. Jeyaretnam response

Kenneth Jeyaretnam in a follow-up blog post has voiced strong objections to the responses made by the Singapore Land Authority (SLA) and ministers involved in the controversy over the colonial bungalows' rental.

He claims there is a fundamental conflict of interest, questions the transparency and accountability of the rentals, and scrutinizes the years of vacancy before the ministers' tenancy. He also raises concerns about the alleged renovations to these properties, asking if these costs were factored into the rental price or covered by public funds.

In response to these concerns, Jeyaretnam calls for a Commission of Inquiry (COI) to investigate the matter thoroughly, suggesting it be chaired by an impartial figure from a Commonwealth country. He proposes the suspension of both ministers involved, along with the public re-listing of the properties at their true market value.

7. Conclusion

The controversy surrounding the Ridout Road rentals, initially fraught with serious allegations, seems to have reached a conclusive end.

The investigation led by the PMO and the revelations it brought forth have shed light on the ministers' professional integrity and commitment to public service. Rather than a scandal, it appears that the real story lies in the ministers' ethical conduct and substantial personal investment in the properties they rented.