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Greater controls over ownership, management of key transport firms sought under new draft laws

2024-04-03 00:00:00.0 海峡时报-新加坡原网页

SINGAPORE - To guard against adverse influences and major interruptions in essential services, a new set of draft laws will subject key Singapore companies in the air, land and sea transport sectors to greater regulatory scrutiny if Parliament approves the changes.

The Transport Sector (Critical Firms) Bill, introduced by Transport Minister Chee Hong Tat in Parliament on April 3, seeks to amend existing laws so that Singapore’s transport authorities have more teeth when deciding which parties are allowed to own, or have control over, designated key entities.

The proposed amendments will also extend existing powers that allow the transport minister to step in during extreme cases when certain essential transport services cannot continue in a safe and reliable way. These powers will apply to a wider range of companies than they do now.

While the Ministry of Transport (MOT) could not provide specific examples, it said designated key entities under the draft laws could include firms providing services that are not easily replaceable because of significant market share or specialised expertise.

These key entities could either be those that provide essential transport services directly in Singapore or those that hold an equity interest in a key transport company here.

According to the Bill, essential transport services include bus and rail operations, port and passenger ferry services, as well as airport ground handling and aircraft maintenance.

MOT said its new Bill seeks to amend four existing laws: the Bus Services Industry Act, the Rapid Transit Systems Act, the Civil Aviation Authority of Singapore Act, and the Maritime and Port Authority of Singapore Act.

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The Bill does not cover the Point-to-Point Passenger Transport Industry Act, which regulates operators of taxis and private-hire cars.

The mooted amendments will allow the respective transport authorities – the Land Transport Authority (LTA), Civil Aviation Authority of Singapore (CAAS) and Maritime and Port Authority of Singapore (MPA) – to designate key entities under their purview and subject them to more controls.

These include requiring designated entities to notify the relevant authority and seek approval if there are major ownership and leadership changes.

Designated entities must also keep the authorities informed of events that could materially impair the provision of essential transport services, such as a lawsuit or an insolvency.

Additionally, designated operating entities cannot be wound up or dissolved without consent, and the relevant authority must be made a party to any related liquidation proceedings.

If Parliament green-lights the amendments, approval from CAAS, for example, would be needed before shareholders in a designated aviation company can lower their controlling interest in the firm below certain thresholds – 75 per cent, 50 per cent and 25 per cent specifically.

This applies to parties based in and outside Singapore.

Similarly, buyers of a designated bus or rail company’s shares will have to notify LTA within seven days if they become a 5 per cent controller of the designated firm.

Parties would also need LTA’s approval before they can gain a 25 per cent, 50 per cent and 75 per cent controlling stake, or if they gain indirect control over a designated entity.

An example of such indirect control could include a shadow director who has influence over a company’s affairs but is not formally appointed to the board.

Approval will also be needed before a designated transport entity can appoint a new chief executive or chairperson. This is to ensure appointees are fit and proper, and do not harm national interests, MOT said.

For designated entities licensed by LTA, CAAS or MPA – which may include bus, rail and airport operators – approval will also be needed for the appointment of board directors.