Ridout Road bungalows: CPIB finds no criminal wrongdoing in rentals by 2 ministers

Singapore agency's report to Lee Hsien Loong finds no preferential treatment, abuse of positions by K Shanmugam, Vivian Balakrishnan

The front drive of 26 Ridout Road.
The front drive of 26 Ridout Road. (SCREENSHOT: Google Maps)

SINGAPORE — Investigations ordered by Prime Minister Lee Hsien Loong into the rentals of the Ridout Road state properties by ministers K Shanmugam and Dr Vivian Balakrishnan have found no evidence of criminal wrongdoing or corruption.

The Straits Times reported on Wednesday (28 June) that PM Lee had submitted the findings of the probe by Corrupt Practices Investigation Bureau (CPIB) to the Parliament, together with a report of the review, which he had asked Senior Minister Teo Chee Hean to conduct.

CPIB added in its report that it found no preferential treatment given to the ministers and their spouses. There was also no disclosure of privileged information during the rental transactions, and no evidence to suggest the ministers had abused their positions for personal gain.

The agency did find a lack of precision in the use of the term “guide rent” by the Singapore Land Authority (SLA), with respect to 26 Ridout Road, which was rented by Law and Home Affairs Minister Shanmugam. SLA had said that the minister's offer was above the guide rent, when his offer was was equal to the correct guide rent of the property.

CNA reported that the Attorney-General’s Chambers (AGC) has agreed with CPIB's findings and recommendations, and has directed that no further action be taken because "the facts do not disclose any offence".

The two reports will be published and tabled in Parliament as a miscellaneous paper, and will be debated when Parliament next sits from Monday (3 July).

The issue was brought to light last month, when opposition politician and Reform Party chief Kenneth Jeyaretnam published social media posts questioning how the two ministers “could afford to pay the market rent for such a pricey property”. Ridout Road is off Holland Road and near the Dempsey Hill lifestyle and entertainment area.

26 Ridout Road, rented by Shanmugam

According to The Straits Times, the CPIB report said that the property of 26 Ridout Road - which was rented by Shanmugam - had an original land size of 9,350 square metres, and had been vacant since December 2013.

The minister had asked the then-deputy secretary of the Ministry of Law in 2017 for a list of properties available to the public to rent. He appointed a property agent to represent him in such transactions in 2018.

During a site visit, Shanmugam noticed an empty plot of land beside the property that was thick with overgrown vegetation, and was concerned that it could pose public health and safety risks. SLA deemed that the plot of land would have to be included in the tenancy of the property, if the minister was to maintain the adjacent land.

The minister agreed, bringing the total land size to 23,164 square metres. SLA covered the initial cost of site clearance, amounting to $172,000, subsequently to be recovered from the tenant’s rent. It also undertook essential repair works for the property, which cost $515,400.

Shanmugam himself paid $61,400 to build a car porch, as well as over $400,000 for additional improvement works not covered by SLA’s restoration works.

He signed the tenancy agreement of 3+3+3 years in June 2018, with the rental at $26,500 per month according to prevailing market conditions. The agreement was renewed in 2021.

Front gate of 31 Ridout Road. (SCREENSHOT: Google Maps)
Front gate of 31 Ridout Road. (SCREENSHOT: Google Maps)

31 Ridout Road, rented by Balakrishnan

According to The Straits Times, the CPIB report said that 31 Ridout Road - rented by Foreign Minister Vivian Balakrishnan - had been vacant for five years, prior to two unsuccessful bid below the prevailing guide rent in 2018.

Dr Balakrishnan's wife had come across a "For Lease" sign at the property, and contacted SLA's appointed managing agent in September 2018.

The agent named an asking monthly rent of $19,000. SLA's leasing department accepted the proposal as it was not below of the prevailing guide rent of $18,800.

Dr Balakrishnan said in his interview with CPIB that he paid more than $200,000 on additional improvement works to the state property,

The tenancy agreement for 3+2+2 years was signed by his wife in October 2019. After the first three-year term, she requested and was granted a renewal of another 3+2 years term.

The rental for the second term was increased to $20,000 per month, taking into consideration the prevailing market conditions in 2022.

Shanmugam recused himself from any discussion on property

Senior Minister Teo's report was meant to address wider potential process or policy issues going beyond the scope of CPIB’s investigations, according to The Straits Times.

The report said that state properties with low demand, such as 26 and 31 Ridout Road in 2018 and 2019, were leased out via direct tenancy. This meant that the prospective tenant would be considered if the submitted bid was not below the guide rent, and the tenant met the stipulated financial and letting criteria.

The report noted that Shanmugam, whose Ministry of Law (MinLaw) oversees SLA, had "informed the then-deputy secretary of MinLaw that he would recuse himself of any discussion related to the rental of the property".

He had also instructed the deputy secretary to approach Indranee Rajah - the then-Senior Minister of State for Law - in the event any matter had to be referred to the minister.

As for 31 Ridout Road, there was no conflict of interest because Dr Balakrishnan’s responsibilities did not include SLA.

No preferential treatment, favourable rental rates

CPIB noted in its report that no preferential treatment was given in the process of the rental transaction, according to CNA.

It also pointed out that the lease availability of both properties at the time were made known to the general public. Both had advertisement signs displayed prominently at the gates of these properties, while 31 Ridout Road was listed on the State Property Information Online website.

On whether the ministers benefited unfairly from favourable rental rates, CPIB said in 2018, the rental per floor unit area for 26 Ridout Road was $30.94 per square metre per month. This was comparable to that of the other Ridout estate properties, ranging from $26 to $33 per square metre per month.

The rate for 31 Ridout Road was $23.05 per square metre per month, slightly lower than $25 to $33.33 per square metre per month for other Ridout estate properties in 2019, due to the condition of the property.

“This episode highlights the paramount importance of political office holders and public service officers understanding and upholding the key principles of acting with integrity at all times, to abide by the spirit and not just the letter of the rules,” the report said.

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