Singapore has vowed to release more information on state-linked firms in a bid to clear misconceptions about their role in the economy, including suspicions that they get special government favors.
But Deputy Prime Minister Lee Hsien-loong, who is also finance minister, gave no time frame on when the details would be released and he made clear the government was not about to relinquish its strategic role in the economy.
"Temasek intends to publish this charter soon to make it clear how the government sees the role of the Temasek companies in the Singapore economy," Lee said last week, referring to Temasek Holdings, one of two investment arms of the Singapore government.
The other arm is the Government of Singapore Investment Corp, which invests the island's massive foreign reserves of some US$100 billion across the globe.
Through Temasek, the government holds significant equity stakes in almost every sector of the economy, including blue-chip listed firms.
These include Singapore Airlines Ltd, Singapore Telecommunications Ltd (SingTel) and DBS Group Holdings Ltd.
While analysts applauded the move to spell out Temasek's role in the economy, others were not so optimistic the announcement meant a reduced state presence in the corporate sector.
"There have been questions inside and outside Singapore in terms of what the role is and what it means," Gene Frieda, head of research at British-based Forecast, said. "From a point of transparency, it makes sense."
A head of research from a European bank who preferred not to be named said Lee's statement meant little change in policy.
"To actually seriously re-look at the role of the government, there has to be a firmer statement as to what the government is going to do with their stakeholdings," the analyst said.
"They didn't give any indications they were going to reduce their stakes," he said.
The government's role in so-called government-linked companies (GLCs) has been blamed in recent years for obstructing their ability to become internationalized.
SingTel's failure to conclude planned purchases of a Hong Kong telecom player and a Malaysian outfit in recent years was due to Temasek's majority equity holdings.
Several GLCs are viewed suspiciously when they attempt to buy majority stakes in foreign companies, especially in sensitive sectors like telecommunications, as the management is thought to be highly influenced by the Singapore government.
SingTel successfully acquired Australia's Cable and Wireless Optus Ltd last year, but only after intense scrutiny to allay Canberra's fears that Australia's national security could be compromised.
But Lee, in a budget speech Friday, said the government would remain a major stakeholder in companies of national strategic importance although it was ready to trim its stake should the need arise.
"Where the activities are strategic and crucial to Singapore, such as aviation and the electricity grid, the government intends to retain its majority or significant stakes," said Lee.
"If growing a GLC into a major player requires the government to dilute its stake through new share issues, mergers, or acquisitions, the government is prepared to do so."
This would likely include PSA Corp, a port operator. Prime Minister Goh Chok-tong said recently that studies have been started into ways in which foreign shipping companies using the port could become shareholders.
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