The recent scandal on SPH Media Trust's (SMT) inflated daily circulation numbers will not change the Government's decision to provide funding support or the amount it previously committed to, Minister of Communications and Information Josephine Teo said in parliament on Feb. 26.
In her speech, Teo addressed the 26 questions filed by Members of Parliament (MP) from the People's Action Party (PAP), Workers' Party (WP) and Progress Singapore Party (PSP).
After her speech, Progress Singapore People's (PSP) Non-Constituency Member of Parliament (NCMP) Leong Mun Wai asked Teo whether the senior management of the former SPH Holdings would be held accountable and if there were any "inadequate due diligence" done by the Ministry of Communication and Information (MCI), as circulation numbers are also an "important area".
In their exchange, both stated that the other defied "financial logic".
Accountability of former senior management
Leong posed the question of whether MCI would hold the former senior management of SPH Holdings accountable concerning the inflated circulation date.
He reasoned that senior management was responsible for restructuring SMT, and the circulation data would hold "some bearings on the amount of compensation that the SPH holding should give".
Leong was likely referring to his previous view that SPH shareholders should have left a larger share of SPH's property assets to support the print media business under SMT.
SPH shareholders agreed to an injection of S$80 million cash and S$30 million worth of shares for SMT.
While Leong acknowledges that no government funding has been disbursed to SMT, he implied that "maybe in the past the government should've have asked for more money from the SPH".
Teo rebutted that she had reiterated in her earlier speech that the government had reviewed SMT's capability and that the reasons to fund SMT remain valid.
Leong clarified that he was not questioning the justification for the government's funding. Instead, when SPH Holdings restructured to SMT, the government should have "asked for more money if the government had known that the circulation data was falsified".
Teo replied: "If the circulation data were, in fact, lower than what has been reported, wouldn't the compensation numbers received by SMT be even lower than they got?"
"That actually goes against what you're trying to ask for."
"Defies financial logic"
Leong did not agree with Teo and said that Teo's answers to his questions "defies financial logic".
He explained that when the takeover from SPH Holdings occurred, and it was known from the beginning that the circulation numbers were lower than what was said, more compensation should have been given.
"That is a logical way of looking at the financial deals between the two entities", Leong said.
Teo disagreed with Leong's statement.
"If something is worth less, and I have to take over something that is worth less, surely I cannot be expected to be provided more compensation," Teo countered.
"The one who defies financial logic is yourself, I'm afraid, Mr Leong."
Circulation numbers as an important data
Another question Leong posed was whether there was any "inadequate due diligence" done by the MCI as circulation is "an important area".
Teo questioned why Leong would say that due diligence was not done when the earlier decisions regarding the key performance indicators (KPI) for SMT to receive funding remain valid.
Leong clarified that the KPIs should also cover circulation data.
Teo replied that the nub of Leong's suggestion was that somehow there was an inadequacy in due diligence.
Teo however said that in hindsight, one could always find elements that could have been done differently.
However, she wanted Leong to return to the review, which is that the "real reasons" for funding SMT remain valid, and the level of funding set aside will not be changed.
"I think the process (of the review outcome) speaks for itself," Teo stated. "Whatever it is that we have put in place prior to making the decision to fund SMT and thereafter, deciding on the amount."
SMT did not expose its own "wrongdoing" first
Another PSP NCMP, Hazel Poa, questioned why SMT did not break the news of their "wrongdoing" themselves.
The news of the inflated circulation numbers was made by socio-political site Wake Up Singapore.
Teo said that it is up to the SMT management to decide if and how each event or incident ought to be communicated within and outside the organisation.
She pointed out that one ought to keep in mind that the review was initiated by SMT and is still in process.
Regarding how the news was communicated, Teo said that it is a matter that the SMT, its management, and board will have to consider.
Top photos via Josephine Teo and Leong Mun Wai's Facebook
https://mothership.sg/2023/02/leong-mun-wai-josephine-teo-defies-financial-logic/?
