Singapore may review past takeovers on grounds of national security
By Philip J Heijmans and Low De Wei
The Singapore government will be given the power to block takeovers of major entities, including those that conflict with national security interests and change ownership or control in the two years before a proposed new law comes into effect.
The proposed Significant Investments Review Bill, expected to come into force next year, will require buyers to obtain approval before their holdings in “designated entities” reach significant thresholds, including 25% or 50%, the Department of Trade and Industry said on Friday.
Under the new law, “where an entity has acted contrary to Singapore’s national security interests, any change in the ownership or control of the entity within two years prior to the law is subject to review,” the ministry said in response to questions on Saturday. “The assessment process applies to every entity, not just designated entities.”
The Asian financial hub, which has long attracted investment for its ease of doing business, finds itself in a delicate balance of maintaining cordial ties with both China and the US amid rising tensions between the global superpowers.
The city-state already relies on a range of laws to monitor and manage entities in sectors such as telecommunications, banking and utilities. The new bill, if passed, would be implemented in 2024 and aims to expand its scope to any entity incorporated, operating or supplying goods or services in Singapore.
“In an increasingly competitive world, there are more and more actors, both state and non-state, who will seek to advance their own interests and influence those of other countries,” said Nicholas Fang, director of security and global affairs at the Singapore government. Institute for International Affairs. Those tools could include military conflict or economic power, he added.
Australia, China, Japan, Britain and the US have similar investment regimes to protect strategic sectors including artificial intelligence, semiconductor manufacturing, cybersecurity, space and energy. Although Singapore did not specify the sectors, Trade and Industry Minister Gan Kim Yong said he expects only a handful of critical entities to be designated under this bill. A list of the designated entities will be published after the law is passed, the ministry said.
Under the new law, designated entities will be subject to controls, including approval for change of ownership and appointment of key officials, the MTI said.
“It is critical that Singapore remains open and connected to the world, and as such, we must continually strengthen our position as a trusted hub where businesses can invest with confidence,” Gan said.