Singapore will not interfere in Singapore Airlines Air India’s investment decision: “Government policy is not…” | Today’s news
The Singapore government said it would not interfere with any decision made by Singapore Airlines Ltd. will make at Air India Ltd., which is reportedly seeking a financial bailout from its shareholders.
Singapore Air has a responsibility to “assess its investment in Air India against the resources it has for the long-term growth and profitability of the company,” Chief Minister K Shanmugam told reporters on Saturday. The Singapore government’s policy is not to interfere in individual investment decisions or exert political pressure, he said.
“Once governments or politicians start to drive individual investment decisions, business discipline will be threatened,” a transcript of his comments said. “Decisions will be politicized – shaped by political considerations rather than commercial judgement. Singaporeans will ultimately bear the cost.”
Air India is close to securing a 100 billion rupee ($1.1 billion) bailout from its owners Tata Sons Pvt. and Singapore Air as the carrier grapples with the aftermath of a turbulent year, people familiar with the matter told Bloomberg this week. The money is contingent on meeting certain performance milestones and will be paid out in installments, the people said.
The support would be proportional to stake, the people said, with Tata Sons owning 74.9% of Air India and Singapore Air the rest. India’s flagship is experiencing a difficult period marked by the fatal crash of Boeing Co. 787 Dreamliner, the closure of Pakistani airspace to Indian carriers and the conflict in the Middle East, which has disrupted travel and increased fuel costs.
“We should leave it to SIA to decide what to do with its investments,” Shanmugam said. “Of course, SIA shareholders, as well as the wider public, have a right to expect SIA to be accountable and transparent. People have a right to expect rigorous assessment to be made before money is allocated.”
The minister also said that Temasek Holdings Pte – which is the majority owner of Singapore Air – is not accountable to the government for its individual investments or the investment decisions of its portfolio companies. Last month, Temasek said this required a long-term perspective and supported Singapore Air’s business strategy for India.
“Temasek and its subsidiaries make decisions on how to invest across a broad portfolio of investments with different risks and different time horizons,” Shanmugam said. “Temasek is accountable to the government for its overall portfolio and overall long-term performance.”
